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MALE REPORTER:
...promise from the authorities
4
00:01:08,677 --> 00:01:11,984
that there would
be some change,
5
00:01:12,028 --> 00:01:14,335
the pressure for reform
is gathering pace
6
00:01:14,378 --> 00:01:17,207
and is gathering support.
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00:01:17,251 --> 00:01:20,819
Differences between capitalism
and communism is so strong
8
00:01:20,863 --> 00:01:23,431
that only concrete and barbed
wire could hold them--
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00:01:23,474 --> 00:01:27,826
WOMAN: We want another way
to reconstruct our society.
10
00:01:29,393 --> 00:01:32,179
FEMALE REPORTER: On the streets
of East German cities,
11
00:01:32,222 --> 00:01:34,616
scores of people demanding
democratic reforms
12
00:01:34,659 --> 00:01:36,226
were dragged off by...
13
00:01:36,270 --> 00:01:38,576
MALE REPORTER: Security
police dragged individuals
14
00:01:38,620 --> 00:01:41,536
from the crowd, beating
them over the head,
15
00:01:41,579 --> 00:01:44,930
and throwing them into
the back of waiting lorries.
16
00:03:23,290 --> 00:03:24,421
♪ Cristal, Maybach
17
00:03:24,465 --> 00:03:25,988
♪ Diamonds on your timepiece
18
00:03:26,031 --> 00:03:28,599
♪ Jet planes, islands,
tigers on a gold leash ♪
19
00:03:28,643 --> 00:03:30,906
♪ We don't care
20
00:03:30,949 --> 00:03:33,430
♪ We aren't caught up
in your love affair ♪
21
00:03:58,803 --> 00:04:01,371
♪ We didn't come from money
22
00:04:01,415 --> 00:04:03,721
♪ But every song's like
gold teeth, Grey Goose ♪
23
00:04:03,765 --> 00:04:05,506
♪ Trippin' in the bathroom
24
00:04:05,549 --> 00:04:08,160
♪ Bloodstains, ball gowns,
trashing the hotel room ♪
25
00:04:08,204 --> 00:04:10,206
♪ We don't care...
26
00:04:23,001 --> 00:04:26,309
- ♪ And we'll never be royals
- ♪ Royals
27
00:04:26,353 --> 00:04:28,964
♪ It don't run in our blood
28
00:04:29,007 --> 00:04:31,749
♪ That kind of lux
just ain't for us ♪
29
00:04:31,793 --> 00:04:33,969
♪ We crave a different
kind of buzz ♪
30
00:04:34,012 --> 00:04:36,580
- ♪ Let me be your ruler
- ♪ Ruler
31
00:04:37,886 --> 00:04:39,844
♪ You can call me Queen B
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00:04:39,888 --> 00:04:41,106
♪ And, baby, I'll rule
33
00:04:41,150 --> 00:04:44,458
♪ I'll rule, I'll rule,
I'll rule ♪
34
00:04:44,501 --> 00:04:46,677
♪ Let me live that fantasy ♪
35
00:06:11,371 --> 00:06:14,765
WOMAN: In the 18th century,
life for the poor is grim.
36
00:06:14,809 --> 00:06:16,854
If you're lucky,
you might be a servant.
37
00:06:16,898 --> 00:06:19,204
Everyone else is
a hand-to-mouth laborer,
38
00:06:19,248 --> 00:06:22,033
moving from place to place,
following the work,
39
00:06:22,077 --> 00:06:26,560
being treated by the landowners
exactly as they please.
40
00:06:26,603 --> 00:06:28,257
And of course there
were no benefits,
41
00:06:28,300 --> 00:06:31,086
there's no health service,
there's no free schooling,
42
00:06:31,129 --> 00:06:33,480
there's absolutely nothing.
43
00:06:35,003 --> 00:06:37,440
So poverty is a death sentence.
44
00:06:39,224 --> 00:06:42,532
And what's very striking is
the average life expectancy
45
00:06:42,576 --> 00:06:44,578
in the 18th century is 17.
46
00:06:52,455 --> 00:06:55,502
MAN: At the time, what capital
really looks like is
47
00:06:55,545 --> 00:06:59,897
money, money-lending
and land-owning.
48
00:06:59,941 --> 00:07:04,554
You have a guy that sits in a
fort and basically claims taxes
49
00:07:04,598 --> 00:07:07,122
on all the people
that work his land.
50
00:07:07,165 --> 00:07:08,906
And we sort of know
what that looks like
51
00:07:08,950 --> 00:07:10,473
from all kinds of movies.
52
00:07:10,517 --> 00:07:12,170
Really, with what I get
from these peasants,
53
00:07:12,214 --> 00:07:14,695
I can hardly afford
to pay my perfume bills.
54
00:07:14,738 --> 00:07:17,480
What about Roulet?
Has he paid his rent?
55
00:07:17,524 --> 00:07:19,439
Roulet died last week.
56
00:07:19,482 --> 00:07:22,311
He died
with his rent unpaid.
57
00:07:22,354 --> 00:07:24,748
- What did he die of?
- Hunger.
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00:07:24,792 --> 00:07:27,403
Hunger is an indulgence
with these peasants.
59
00:07:27,447 --> 00:07:28,665
Oh, I keep forgetting, Gabelle,
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00:07:28,709 --> 00:07:30,928
you're a humanitarian,
aren't you?
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00:07:30,972 --> 00:07:33,453
You think that one person
is as good as another --
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00:07:33,496 --> 00:07:37,021
a naive notion
so contradicted by the facts.
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00:07:42,984 --> 00:07:45,160
WILLIAMS: For the rich,
inheritance is the obsession.
64
00:07:45,203 --> 00:07:47,205
It's a very strict code.
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00:07:47,249 --> 00:07:49,294
The eldest son gets the capital.
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00:07:49,338 --> 00:07:50,905
He gets everything --
he gets the money,
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00:07:50,948 --> 00:07:52,950
he gets the house,
he gets the land --
68
00:07:52,994 --> 00:07:55,562
and that makes him
incredibly powerful,
69
00:07:55,605 --> 00:07:59,174
just through
an accident of birth.
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00:07:59,217 --> 00:08:02,003
These land-owning men,
these first sons,
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00:08:02,046 --> 00:08:04,527
they also have a huge
amount of political power,
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00:08:04,571 --> 00:08:08,444
because a lot of them are
the MPs, they're elites.
73
00:08:08,488 --> 00:08:11,186
And as a consequence,
they are driven by a desire
74
00:08:11,229 --> 00:08:14,885
to protect their own income,
to protect their own world,
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00:08:14,929 --> 00:08:17,192
and it simply doesn't
occur to them
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00:08:17,235 --> 00:08:20,151
that poor people deserve
some redistribution of wealth.
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00:08:20,195 --> 00:08:22,893
Taxation, they resist
very strongly.
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00:08:22,937 --> 00:08:25,026
And this is the way that
the aristocracy worked,
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00:08:25,069 --> 00:08:28,377
not just in Britain,
but all through Europe,
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00:08:28,420 --> 00:08:32,424
and the aim is to conserve
the aristocratic power.
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00:08:38,822 --> 00:08:40,694
The examples that
Thomas Piketty has
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00:08:40,737 --> 00:08:43,261
of Jane Austen and Balzac,
they're very fitting,
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00:08:43,305 --> 00:08:45,350
because when you read
Jane Austen,
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00:08:45,394 --> 00:08:47,178
it is all about money,
85
00:08:47,222 --> 00:08:49,703
and this money is not
earned through work,
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00:08:49,746 --> 00:08:52,357
it's not earned through
owning businesses,
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00:08:52,401 --> 00:08:55,012
it's earned through land,
it's inherited land.
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00:09:07,329 --> 00:09:09,897
WILLIAMS: Mr. Darcy, for
example, in Pride and Prejudice,
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00:09:09,940 --> 00:09:11,594
he has this huge estate.
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00:09:11,638 --> 00:09:13,335
He doesn't even
have to be there.
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00:09:13,378 --> 00:09:16,599
This land just creates
money for him.
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00:09:16,643 --> 00:09:19,254
- How good of you to come.
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00:09:19,297 --> 00:09:20,647
LIZZIE: He looks miserable,
poor sod.
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00:09:20,690 --> 00:09:21,952
CHARLOTTE: Miserable he may be,
95
00:09:21,996 --> 00:09:24,259
but poor he most certainly
is not.
96
00:09:24,302 --> 00:09:26,174
- LIZZIE: Tell me.
- CHARLOTTE: 10,000 a year,
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00:09:26,217 --> 00:09:28,089
and he owns half of Derbyshire.
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00:09:28,132 --> 00:09:29,656
- The miserable half?
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00:09:33,442 --> 00:09:34,748
WILLIAMS: Jane Austen
created a fantasy
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00:09:34,791 --> 00:09:36,488
that you could get your
hands on this wealth
101
00:09:36,532 --> 00:09:39,404
if you were just a bit
fun and a bit witty.
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00:09:39,448 --> 00:09:42,364
But the reality is there's
no way a Mr. Darcy would marry
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00:09:42,407 --> 00:09:43,844
girls like Lizzie Bennet,
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00:09:43,887 --> 00:09:47,804
who actually haven't got
a penny to their names.
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00:09:47,848 --> 00:09:51,591
He would marry an heiress,
possibly even a cousin,
106
00:09:51,634 --> 00:09:53,897
and create this, sort of,
megalopolis estate.
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00:09:56,857 --> 00:10:01,992
WILLIAMS: Money marries money.
There's nothing to do with love.
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00:10:02,036 --> 00:10:03,907
And what we see now,
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00:10:03,951 --> 00:10:05,953
almost a cycling back
to the 18th century.
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00:10:08,912 --> 00:10:12,873
In Britain, inherited wealth
is everything... again.
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00:10:12,916 --> 00:10:17,486
Nowadays, 1% of the population
owns 70% of our land.
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00:10:17,529 --> 00:10:19,923
♪ I've been broke all my life
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00:10:19,967 --> 00:10:21,272
♪ Now wonder
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00:10:21,316 --> 00:10:23,927
♪ How does it feel to be rich?
115
00:10:23,971 --> 00:10:26,016
♪ How does it feel to be rich?
116
00:10:26,060 --> 00:10:28,453
♪ Oh, I done worked
all my life ♪
117
00:10:29,454 --> 00:10:30,978
♪ Now wonder
118
00:10:31,021 --> 00:10:33,458
♪ How does it feel
to just live? ♪
119
00:10:33,502 --> 00:10:35,547
♪ How does it feel
to just live? ♪
120
00:10:35,591 --> 00:10:39,203
WOMAN: There's always been an
elite, which is usually adept at
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00:10:39,247 --> 00:10:41,597
reproducing its privilege
through generations,
122
00:10:41,641 --> 00:10:46,820
monopolizing both economic
and social and cultural capital.
123
00:10:46,863 --> 00:10:50,084
The way the elite stays in power
and passes on their privilege
124
00:10:50,127 --> 00:10:51,607
to the next generation
125
00:10:51,651 --> 00:10:54,218
is also by shaping
the way that we think.
126
00:10:54,262 --> 00:10:56,307
♪ How does it feel to be rich?
127
00:10:56,351 --> 00:10:58,788
♪ How does it feel
to be ri-i-ich? ♪
128
00:10:58,832 --> 00:11:01,138
♪ How does it feel
to just live? ♪
129
00:11:01,182 --> 00:11:03,184
♪ How does it feel
to just live? ♪♪
130
00:11:05,490 --> 00:11:07,362
TETT: Traditionally,
economists have argued
131
00:11:07,405 --> 00:11:10,408
that inequality is
a very powerful driver
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00:11:10,452 --> 00:11:12,889
of progress and innovation
133
00:11:12,933 --> 00:11:15,849
because the idea is that
competition, essentially,
134
00:11:15,892 --> 00:11:17,894
makes people try harder.
135
00:11:19,766 --> 00:11:23,160
The problem is that
extreme inequality
136
00:11:23,204 --> 00:11:27,382
increasingly seems to be a
source of great economic stress,
137
00:11:27,425 --> 00:11:30,951
social stress
and political stress.
138
00:11:30,994 --> 00:11:34,563
Because if you have
a situation where an elite
139
00:11:34,606 --> 00:11:37,261
are so rigidly protective
of their ranks
140
00:11:37,305 --> 00:11:39,916
that nobody can ever rise,
there's no social mobility,
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00:11:39,960 --> 00:11:42,136
you tend to end up with
a full-blown revolution.
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00:12:08,292 --> 00:12:10,338
WILLIAMS: In the French
Revolution, the banner is
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00:12:10,381 --> 00:12:13,254
"Liberté, égalité, fraternité."
144
00:12:13,297 --> 00:12:15,560
It's going to be brotherhood,
everyone's going to be free.
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00:12:18,128 --> 00:12:20,914
But yet within
a tiny amount of time,
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00:12:20,957 --> 00:12:23,177
you have this
government of bankers,
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00:12:23,220 --> 00:12:27,094
and what they do is start to
create the elites once more.
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00:12:28,748 --> 00:12:31,054
♪ This is the land
that fought for liberty ♪
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00:12:31,098 --> 00:12:33,927
♪ Now when we fight,
we fight for bread ♪
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00:12:33,970 --> 00:12:36,712
♪ Here is the thing
about equality ♪
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00:12:36,756 --> 00:12:39,759
♪ Everyone's equal
when they're dead ♪
152
00:12:39,802 --> 00:12:42,413
♪ Take your place,
take your chance ♪
153
00:12:42,457 --> 00:12:45,286
♪ Vive la France
Vive la France!
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00:12:45,329 --> 00:12:47,505
- ALL CHANT: Vive la France!
155
00:13:40,907 --> 00:13:42,604
WILLIAMS: What we see
in the late 18th
156
00:13:42,647 --> 00:13:45,389
and early 19th centuries
is the Industrial Revolution.
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00:13:45,433 --> 00:13:48,784
It replaces the work
of people's hands with machines,
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00:13:48,828 --> 00:13:51,395
so you bring in machines to
make wool, to make cotton,
159
00:13:51,439 --> 00:13:54,050
to make all kinds
of commodities.
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00:13:54,094 --> 00:13:57,358
This makes goods faster,
it standardizes them,
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00:13:57,401 --> 00:14:00,274
and this makes more profit.
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00:14:00,317 --> 00:14:04,713
Capital's no longer this fixed
thing that's your land
163
00:14:04,756 --> 00:14:08,412
or even your ability
to lend money.
164
00:14:08,456 --> 00:14:13,678
You finally figure out that
you can expand your own factory
165
00:14:13,722 --> 00:14:17,813
by, kind of, selling stuff,
keeping the profits,
166
00:14:17,857 --> 00:14:21,904
then reinvesting those profits
in expanding your factory.
167
00:14:21,948 --> 00:14:24,994
And that's kind of what
capitalism in its modern form
168
00:14:25,038 --> 00:14:28,128
really lets us do -- is that
capital becomes this thing
169
00:14:28,171 --> 00:14:31,131
that can, kind of,
perpetually expand.
170
00:14:35,222 --> 00:14:38,834
But the gap between wages and
productivity is substantial,
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00:14:38,878 --> 00:14:41,793
and you have these kind of
feudal legacies of labor
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00:14:41,837 --> 00:14:45,145
persisting very, very
late into the game.
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00:14:45,188 --> 00:14:47,582
British master and servant law
meant that it was a crime
174
00:14:47,625 --> 00:14:50,890
for you to quit your employer
without permission.
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00:14:53,022 --> 00:14:55,285
And, you know, this is
getting actively used
176
00:14:55,329 --> 00:14:58,898
in the mid-19th century, during,
like, the heyday of capitalism
177
00:14:58,941 --> 00:15:01,813
in England -- the most advanced
country in the world --
178
00:15:01,857 --> 00:15:03,946
and they're throwing
workers in jail,
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00:15:03,990 --> 00:15:05,948
and they're being beaten
180
00:15:05,992 --> 00:15:08,864
because it's a crime
to go on strike.
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00:15:36,718 --> 00:15:40,635
MAN: This whole idea developed
around escaping the Old World
182
00:15:40,678 --> 00:15:45,205
and setting up a new,
more egalitarian society.
183
00:15:45,248 --> 00:15:48,251
When the new world countries
were being set up --
184
00:15:48,295 --> 00:15:50,471
so New Zealand,
Australia, Canada --
185
00:15:50,514 --> 00:15:54,388
these places were being set up
by these refugees, essentially,
186
00:15:54,431 --> 00:15:56,085
fleeing Europe
187
00:15:56,129 --> 00:15:59,784
at a time that capitalism
was really taking hold.
188
00:16:01,482 --> 00:16:04,398
And that's why a lot of these
people wanted to get out
189
00:16:04,441 --> 00:16:09,359
of these countries --
they wanted a flatter society.
190
00:16:09,403 --> 00:16:14,103
It was this idea of moving
beyond the class system,
191
00:16:14,147 --> 00:16:17,019
but it was done largely
in a laissez-faire way.
192
00:16:17,063 --> 00:16:21,197
It wasn't a political movement,
by and large.
193
00:16:21,241 --> 00:16:24,287
And very quickly it was the
wealthy that started dominating
194
00:16:24,331 --> 00:16:26,246
right from the start.
195
00:16:27,987 --> 00:16:30,641
NAIDU: If you're a white man
in sort of, like, 1800-ish,
196
00:16:30,685 --> 00:16:32,339
Australia and the US --
197
00:16:32,382 --> 00:16:36,038
these places are, like,
the best places for you to go.
198
00:16:36,082 --> 00:16:39,520
You've got this wide-open
frontier; it's filled with land.
199
00:16:39,563 --> 00:16:41,609
But the big constraint
on your production
200
00:16:41,652 --> 00:16:44,786
is your ability
to mobilize labor.
201
00:16:44,829 --> 00:16:46,918
So if you're
a small family farmer,
202
00:16:46,962 --> 00:16:49,008
the only labor you can
mobilize on to the frontier
203
00:16:49,051 --> 00:16:51,010
is your kids.
204
00:16:53,186 --> 00:16:56,058
But if you're a slave owner, you
can basically go to New Orleans,
205
00:16:56,102 --> 00:16:58,234
you can take out a loan,
use that loan
206
00:16:58,278 --> 00:17:01,933
to buy a bunch of slaves in
the New Orleans slave market,
207
00:17:01,977 --> 00:17:04,893
then take them out to
the Alabama frontier
208
00:17:04,936 --> 00:17:07,156
and start clearing land
and growing cotton.
209
00:17:19,734 --> 00:17:22,998
And you're again able to
take the profits from that
210
00:17:23,042 --> 00:17:26,219
and expand, buy more slaves,
buy more land,
211
00:17:26,262 --> 00:17:29,091
and so you can again now
think of the slave economy
212
00:17:29,135 --> 00:17:33,226
as participating in this
circuit of accumulation.
213
00:17:37,534 --> 00:17:40,668
But also being a slave owner
didn't just mean that you had
214
00:17:40,711 --> 00:17:43,323
access to the labor
of your slaves,
215
00:17:43,366 --> 00:17:47,457
it also meant you had
increased access to capital,
216
00:17:47,501 --> 00:17:51,200
because you can use
your slaves as collateral.
217
00:17:58,164 --> 00:18:01,036
So if you, basically, are
looking to lend to somebody
218
00:18:01,080 --> 00:18:03,865
and they can offer
an equivalent amount of
219
00:18:03,908 --> 00:18:05,780
slave collateral versus land,
220
00:18:05,823 --> 00:18:07,347
you'd prefer the
slave collateral
221
00:18:07,390 --> 00:18:10,524
because it's much easier
to move them around
222
00:18:10,567 --> 00:18:13,135
or resell them or
something like that.
223
00:19:05,100 --> 00:19:06,580
MAN: Attack!
224
00:19:53,801 --> 00:19:55,585
WILLIAMS: It's no good
speeding up production
225
00:19:55,629 --> 00:19:58,501
if there's no one to buy
the stuff.
226
00:19:58,545 --> 00:20:03,202
So fashion fuels the
Industrial Revolution.
227
00:20:03,245 --> 00:20:06,770
By the 19th century, the cult
of fashion is all-encompassing.
228
00:20:06,814 --> 00:20:08,990
It's come down even
to the working classes.
229
00:20:09,033 --> 00:20:13,951
Even working class women
are trying to stay in fashion.
230
00:20:13,995 --> 00:20:17,607
The idea that, "You can't wear
that. That's from last season,"
231
00:20:17,651 --> 00:20:20,915
that will be very strange to
a 16th or 17th century person.
232
00:20:20,958 --> 00:20:23,047
They think,
"Well, it's still working,
233
00:20:23,091 --> 00:20:27,226
it's still hard-wearing.
I'll wear the same outfit."
234
00:20:32,970 --> 00:20:34,755
And the industry that
accelerates the fastest
235
00:20:34,798 --> 00:20:37,627
in the 19th century is
the industry about Christmas.
236
00:20:45,853 --> 00:20:47,637
In the 18th and 17th century,
237
00:20:47,681 --> 00:20:49,987
Christmas was
a very low-key affair.
238
00:20:50,031 --> 00:20:52,903
It was usually about drinking
with your friends and relations.
239
00:20:52,947 --> 00:20:55,036
It wasn't really
about present-giving;
240
00:20:55,079 --> 00:20:58,605
that was perhaps in New Year.
241
00:20:58,648 --> 00:21:01,260
But by the mid-19th century,
we have the Christmas cracker,
242
00:21:01,303 --> 00:21:03,218
the Christmas card,
the Christmas tree.
243
00:21:03,262 --> 00:21:05,089
People are bankrupting
themselves
244
00:21:05,133 --> 00:21:08,571
to have a yearly Christmas,
and it really was seized upon
245
00:21:08,615 --> 00:21:12,532
by the manufacturers as a way
to make a huge amount of money.
246
00:21:16,231 --> 00:21:18,146
NAIDU: Just as you were getting
all these new technologies
247
00:21:18,189 --> 00:21:21,367
like the railroad and the
telegraph and mass production
248
00:21:21,410 --> 00:21:23,499
and the corporation --
all of these new innovations,
249
00:21:23,543 --> 00:21:24,935
all of this additional
production --
250
00:21:24,979 --> 00:21:28,243
and inequality
becomes very, very large.
251
00:21:30,201 --> 00:21:32,595
It's actually this period
of enormous conflicts,
252
00:21:32,639 --> 00:21:36,469
where you have open wars
in the mines in Colorado
253
00:21:36,512 --> 00:21:41,212
between strikers and armed
militia hired by capitalists.
254
00:21:45,391 --> 00:21:49,177
And the overwhelming use
of the US Federal Army
255
00:21:49,220 --> 00:21:52,354
in this period
is strike-breaking.
256
00:22:19,425 --> 00:22:22,689
And similarly, today,
we have this whole
257
00:22:22,732 --> 00:22:24,778
transformation of
the economy happening,
258
00:22:26,432 --> 00:22:28,825
both with trade
and with technology,
259
00:22:28,869 --> 00:22:31,393
that exactly have the
sort of same property of
260
00:22:31,437 --> 00:22:33,830
creating lots of monopolies.
261
00:22:38,357 --> 00:22:40,010
And so it's generating, again,
262
00:22:40,054 --> 00:22:42,796
a small class of very,
very wealthy people.
263
00:22:42,839 --> 00:22:43,971
- 22...
- 43 million.
264
00:22:44,014 --> 00:22:45,407
- 75 million.
265
00:22:45,451 --> 00:22:48,105
$107 million.
Sold.
266
00:24:05,444 --> 00:24:07,837
ARCHIVE: In Berlin,
the Germans know the hour
267
00:24:07,881 --> 00:24:10,187
of glory is at hand.
268
00:24:12,059 --> 00:24:14,496
NAIDU: There's like a cultural
militarism that's happening
269
00:24:14,540 --> 00:24:17,325
on the Continent, and they're
competing with each other
270
00:24:17,368 --> 00:24:20,676
over both imperial territory
and trade routes.
271
00:24:20,720 --> 00:24:23,287
ARCHIVE: The warlord is
ceaseless, indefatigable,
272
00:24:23,331 --> 00:24:26,421
as he makes the rounds
of his armies.
273
00:24:26,465 --> 00:24:28,684
WILLIAMS: The British Empire
was so powerful;
274
00:24:28,728 --> 00:24:30,425
they had a quarter of
the world's population.
275
00:24:30,469 --> 00:24:32,514
The other countries wanted
a piece of the cake.
276
00:24:32,558 --> 00:24:36,562
And Germany, in particular,
wanted a piece of the cake.
277
00:24:38,955 --> 00:24:41,567
NAIDU: A lot of these
new capitalists
278
00:24:41,610 --> 00:24:44,700
are still, kind of, basically
feudal in their outlook.
279
00:24:44,744 --> 00:24:47,921
So particularly in Germany,
you have these Junkers
280
00:24:47,964 --> 00:24:49,749
that are these
big industrialists,
281
00:24:49,792 --> 00:24:51,707
but they also think there's
nothing better for society
282
00:24:51,751 --> 00:24:52,969
than a good fight.
283
00:25:01,630 --> 00:25:04,198
WILLIAMS: Britain and the Allied
powers take on Germany
284
00:25:04,241 --> 00:25:07,506
in what they think is going
to be a short, sharp shock
285
00:25:07,549 --> 00:25:09,072
over in a few months' time.
286
00:25:22,042 --> 00:25:26,437
Instead, it goes on for years
and decimates both populations.
287
00:25:41,714 --> 00:25:45,544
World War I is, at its base,
a fight over capital.
288
00:25:47,589 --> 00:25:51,506
And we see this massive
post-war economic crash.
289
00:25:53,726 --> 00:25:56,424
So, you have this new
idea after World War I,
290
00:25:56,467 --> 00:25:59,383
basically born out of the fact
that the government is bankrupt,
291
00:25:59,427 --> 00:26:02,909
that tax is not bad,
that it actually could be good.
292
00:26:02,952 --> 00:26:04,563
And the only way you're
going to get money
293
00:26:04,606 --> 00:26:06,826
is by taxing the aristocracy.
294
00:26:09,306 --> 00:26:11,744
There is nothing in the working
class and the middle class
295
00:26:11,787 --> 00:26:13,746
left to tax.
296
00:26:13,789 --> 00:26:17,445
So you see the beginning of
the drop in aristocratic power.
297
00:26:19,099 --> 00:26:22,493
And also what you see in the
'20s is the growth of the power
298
00:26:22,537 --> 00:26:24,974
of women and also
of the working classes --
299
00:26:25,018 --> 00:26:27,324
both of them, essentially,
are saying to the government,
300
00:26:27,368 --> 00:26:29,936
"Look, we worked really
hard for you in this war.
301
00:26:29,979 --> 00:26:32,895
We sacrificed. You need
to give us something back."
302
00:26:32,939 --> 00:26:36,333
So suddenly the whole principle
that the working classes
303
00:26:36,377 --> 00:26:39,989
and women must sit there and put
up with the way that society is,
304
00:26:40,033 --> 00:26:42,383
is completely
overturned in the '20s.
305
00:26:45,038 --> 00:26:46,866
ARCHIVE: All of the crowds
of the Empire City,
306
00:26:46,909 --> 00:26:49,172
the wonder city, the windy city,
the passion city,
307
00:26:49,216 --> 00:26:50,652
the people, yes.
308
00:26:54,003 --> 00:26:58,007
♪ Gone are my blues,
and gone are my tears ♪
309
00:26:58,051 --> 00:27:02,098
♪ I've got good news
to shout in your ears ♪
310
00:27:02,142 --> 00:27:05,711
♪ The long-lost dollar
has come back to the fold ♪
311
00:27:05,754 --> 00:27:09,018
♪ With silver, you can
turn your dreams to gold! ♪
312
00:27:09,062 --> 00:27:11,064
♪ Oh, we're in the money
313
00:27:12,108 --> 00:27:13,849
♪ We're in the money
314
00:27:13,893 --> 00:27:18,680
♪ Let's lend it, spend it,
send it rolling around ♪
315
00:27:18,724 --> 00:27:20,421
ARCHIVE: All of the crowd
get the big money --
316
00:27:20,464 --> 00:27:22,945
2 million, 5 million --
make a pile and raise a pile.
317
00:27:22,989 --> 00:27:25,513
WOMAN: The '20s was maybe
irrational exuberance.
318
00:27:25,556 --> 00:27:27,646
ARCHIVE: Watch us grow!
What am I bid? Going up!
319
00:27:27,689 --> 00:27:29,473
WOMAN: There was a boom
in stock prices,
320
00:27:29,517 --> 00:27:32,955
but people kept bidding
into the stock market,
321
00:27:32,999 --> 00:27:36,829
because people always think
there's magic in Wall Street.
322
00:27:36,872 --> 00:27:39,788
You know, we have a mythology
in this country, in particular,
323
00:27:39,832 --> 00:27:42,399
that what's good for Wall Street
is good for Main Street,
324
00:27:42,443 --> 00:27:44,750
but that's really
never been true.
325
00:27:44,793 --> 00:27:47,840
♪ We're in the money,
I'll say we're in the money ♪
326
00:27:47,883 --> 00:27:51,757
♪ We've got a lot of what
it takes to get along ♪♪
327
00:27:51,800 --> 00:27:55,325
A lot of banks were selling
products that they knew
328
00:27:55,369 --> 00:27:58,154
were absolutely no good.
329
00:27:58,198 --> 00:28:02,855
There were dodgy bankers
doing dodgy deals knowingly.
330
00:28:02,898 --> 00:28:04,944
There weren't a lot of
regulations in place.
331
00:28:04,987 --> 00:28:08,034
It was a real free-for-all
of capital.
332
00:28:09,775 --> 00:28:11,820
MAN: The bubble of the 1920s
333
00:28:11,864 --> 00:28:14,605
was characteristic of
many other bubbles --
334
00:28:14,649 --> 00:28:16,782
a kind of euphoria that happens.
335
00:28:16,825 --> 00:28:19,567
Stocks go up, you can
borrow against that stock.
336
00:28:19,610 --> 00:28:21,351
You use that money
to buy more stock,
337
00:28:21,395 --> 00:28:26,095
the price goes up even more,
and everybody's feeling giddy.
338
00:28:32,841 --> 00:28:34,800
FOROOHAR: At the same time,
you've got tremendous
339
00:28:34,843 --> 00:28:37,628
dislocation going on
in the job market --
340
00:28:37,672 --> 00:28:39,195
a lot of people
getting very rich,
341
00:28:39,239 --> 00:28:41,023
but a lot of workers
at the bottom,
342
00:28:41,067 --> 00:28:43,243
not enough in the middle.
343
00:28:43,286 --> 00:28:48,335
Credit was then being offered to
kind of paper over that divide.
344
00:28:53,644 --> 00:28:57,431
STIGLITZ: That credit cycle
fed this bubble,
345
00:28:57,474 --> 00:29:00,390
and like every other bubble,
346
00:29:00,434 --> 00:29:01,609
it broke.
347
00:29:03,567 --> 00:29:04,960
FOROOHAR: This time around,
348
00:29:05,004 --> 00:29:08,442
a number of bankers
actually went to jail,
349
00:29:08,485 --> 00:29:11,010
and there really were some
regulatory changes, you know,
350
00:29:11,053 --> 00:29:13,708
like, in particular the
Glass-Steagall Depression-era
351
00:29:13,752 --> 00:29:15,754
legislation that actually
fixed the banking system
352
00:29:15,797 --> 00:29:19,845
and made it safer --
until it was overturned in 1989.
353
00:29:30,856 --> 00:29:34,033
After the financial crash,
countries all around the world
354
00:29:34,076 --> 00:29:36,818
also ended up getting
in a trade war.
355
00:29:36,862 --> 00:29:38,385
There were tariffs
that were imposed,
356
00:29:38,428 --> 00:29:40,343
and that created
a snowball cycle,
357
00:29:40,387 --> 00:29:42,824
which led to more pain globally,
358
00:29:44,434 --> 00:29:48,351
and that helped to provoke
the Great Depression.
359
00:30:02,365 --> 00:30:03,758
They told me to
tell you to get off,
360
00:30:03,802 --> 00:30:05,238
and that's what I'm telling ya.
361
00:30:05,281 --> 00:30:07,196
You mean get off of my own land?
362
00:30:07,240 --> 00:30:09,329
Don't go to blaming me,
it ain't my fault.
363
00:30:09,372 --> 00:30:10,591
Whose fault is it?
364
00:30:10,634 --> 00:30:11,897
You know who owns the land --
365
00:30:11,940 --> 00:30:14,029
the Shawnee Land
and Cattle Company.
366
00:30:14,073 --> 00:30:15,944
And who's the Shawnee
Land and Cattle Company?
367
00:30:15,988 --> 00:30:17,903
It ain't nobody! It's a company.
368
00:30:17,946 --> 00:30:19,730
They got a president,
ain't they?
369
00:30:19,774 --> 00:30:22,168
They got somebody knows what
a shotgun's for, ain't they?!
370
00:30:22,211 --> 00:30:23,256
What's the use
of pickin' on him?
371
00:30:23,299 --> 00:30:25,040
He ain't nothin'
but the manager.
372
00:30:25,084 --> 00:30:26,955
And he's half crazy hisself
tryin' to keep up
373
00:30:26,999 --> 00:30:28,391
with his orders from the East.
374
00:30:28,435 --> 00:30:31,699
- Then who do we shoot?
- Brother, I don't know.
375
00:30:31,742 --> 00:30:33,440
- If I did, I'd tell ya.
376
00:30:33,483 --> 00:30:35,485
I just don't know
who's to blame.
377
00:30:35,529 --> 00:30:37,836
I'm right here to tell you,
mister, there ain't nobody
378
00:30:37,879 --> 00:30:39,838
gonna push me off my land!
379
00:30:39,881 --> 00:30:43,319
My grandpa took up
this land 70 years ago.
380
00:30:43,363 --> 00:30:46,583
My pa was born here.
We was all born on it!
381
00:30:46,627 --> 00:30:48,977
And some of us was killed on it!
382
00:32:33,690 --> 00:32:37,477
MAN: The pain in the United
States had become so great,
383
00:32:37,520 --> 00:32:43,004
so grave -- absolute poverty --
and as a consequence of that,
384
00:32:43,048 --> 00:32:45,833
the willingness to
make political solutions
385
00:32:45,876 --> 00:32:48,488
that were severe.
386
00:32:48,531 --> 00:32:53,101
ROOSEVELT: This nation is asking
for action and action now.
387
00:32:54,885 --> 00:32:58,411
BREMMER: Price-fixing, massive
change in labor rates --
388
00:32:58,454 --> 00:33:01,153
all of these things under FDR
389
00:33:01,196 --> 00:33:04,460
was something that Americans
hadn't seen before,
390
00:33:04,504 --> 00:33:07,550
and absolutely that led to
massive infrastructure build
391
00:33:07,594 --> 00:33:10,423
and it led to extraordinary
redistribution.
392
00:33:11,902 --> 00:33:14,035
The existence
of a communist alternative
393
00:33:14,079 --> 00:33:18,605
scared the capitalist world
into thinking that if it didn't
394
00:33:18,648 --> 00:33:21,912
at least address some of
the basic inequality issues,
395
00:33:21,956 --> 00:33:24,828
that they would lose
the battle for ideas.
396
00:33:30,921 --> 00:33:33,533
In the New Deal itself,
Roosevelt actually borrowed
397
00:33:33,576 --> 00:33:37,058
some ideas -- the heavy state
involvement in the economy;
398
00:33:37,102 --> 00:33:39,060
heavy regulation.
399
00:33:41,323 --> 00:33:44,979
There was a clear recognition
that unless the state tried to
400
00:33:45,023 --> 00:33:46,763
do something about jobs
401
00:33:46,807 --> 00:33:50,985
and do enough redistribution
to keep people from starving,
402
00:33:51,029 --> 00:33:54,510
that you wouldn't have
basic social stability.
403
00:34:18,621 --> 00:34:20,797
WILLIAMS: The Wall Street crash
creates poverty in America,
404
00:34:20,841 --> 00:34:22,147
it creates poverty in Britain,
405
00:34:22,190 --> 00:34:24,105
but it has a massive
effect on Germany,
406
00:34:24,149 --> 00:34:28,196
because Germany is already poor.
After World War I,
407
00:34:28,240 --> 00:34:30,851
they were given these very
punitive reparations --
408
00:34:30,894 --> 00:34:33,810
they had to give huge amounts
of money to the other countries.
409
00:34:33,854 --> 00:34:36,291
And what you have is
this horrific inflation
410
00:34:36,335 --> 00:34:37,684
in the Weimar Republic --
411
00:34:37,727 --> 00:34:39,642
Germany as it was known in
the 1920s --
412
00:34:39,686 --> 00:34:41,383
in which, basically,
at one point,
413
00:34:41,427 --> 00:34:46,040
a whole barrel of banknotes
cannot buy you a loaf of bread.
414
00:34:49,174 --> 00:34:52,264
We can absolutely link, as tight
as that, the rise of fascism
415
00:34:52,307 --> 00:34:55,745
in Europe in the 1930s
and extreme poverty.
416
00:35:12,936 --> 00:35:14,895
And you can see
how seductive it is
417
00:35:14,938 --> 00:35:17,419
when someone like Adolf Hitler
comes up and says,
418
00:35:17,463 --> 00:35:20,944
"I'll make Germany great again.
We'll be powerful again."
419
00:35:20,988 --> 00:35:22,990
And really what he's saying is,
420
00:35:23,033 --> 00:35:26,036
"The reason why we're so poor in
Germany is because of Britain,
421
00:35:26,080 --> 00:35:30,650
is because of America, is
because of the rest of Europe."
422
00:35:42,923 --> 00:35:46,144
These downtrodden people
were so open, so vulnerable
423
00:35:46,187 --> 00:35:49,059
to the rise of fascism
and the call of racism,
424
00:35:49,103 --> 00:35:50,496
the call of exclusionism
425
00:35:50,539 --> 00:35:53,629
and the call of
invading other countries.
426
00:36:21,353 --> 00:36:26,053
ARCHIVE: One American
airplane factory -- one of many.
427
00:36:26,096 --> 00:36:28,969
One bomber --
thousands on the way --
428
00:36:30,449 --> 00:36:32,886
an angel of death.
429
00:36:32,929 --> 00:36:35,410
NAIDU: What really gets rid of
the Depression is transforming
430
00:36:35,454 --> 00:36:37,369
the economy into World War II.
431
00:36:37,412 --> 00:36:39,936
And the scale of this is just
something that humanity
432
00:36:39,980 --> 00:36:41,895
had never seen before.
433
00:36:44,724 --> 00:36:46,856
The governments of all
the societies involved
434
00:36:46,900 --> 00:36:49,119
just kind of take
over production,
435
00:36:49,163 --> 00:36:50,817
and this is an industrial war,
436
00:36:50,860 --> 00:36:54,124
so production is, kind of,
the terms under which,
437
00:36:54,168 --> 00:36:57,258
in the long run,
this will be won or lost.
438
00:37:03,917 --> 00:37:06,746
The labor movement
got a lot of political power.
439
00:37:06,789 --> 00:37:08,574
Like, if you're
producing for the war,
440
00:37:08,617 --> 00:37:13,405
you have to automatically
recognize a union.
441
00:37:13,448 --> 00:37:15,798
And then just also raising
the money to pay for that
442
00:37:15,842 --> 00:37:18,236
just involved raising taxes.
443
00:37:19,541 --> 00:37:22,588
This period was the
last gasp of feudalism,
444
00:37:22,631 --> 00:37:25,678
and it took this to finally
purge the influence
445
00:37:25,721 --> 00:37:29,159
of the aristocracy
in advanced countries.
446
00:39:53,216 --> 00:39:56,176
♪ Oh, give me land,
lots of land ♪
447
00:39:56,219 --> 00:39:58,874
♪ Under starry skies above
448
00:39:58,918 --> 00:40:02,138
♪ Don't fence me in
449
00:40:02,182 --> 00:40:05,403
♪ Let me ride through
the wide open country... ♪
450
00:40:19,721 --> 00:40:24,422
♪ Let me be my myself
in the evening breeze ♪
451
00:40:24,465 --> 00:40:28,382
♪ Listen to the murmur
of the cottonwood trees... ♪
452
00:40:41,482 --> 00:40:50,796
♪ Don't fence me in ♪
453
00:40:54,277 --> 00:40:56,932
The social landscape
is completely different
454
00:40:56,976 --> 00:40:58,673
in the aftermath
of World War II.
455
00:40:58,717 --> 00:41:02,242
You see the biggest shift in
attitudes that you ever see.
456
00:41:02,285 --> 00:41:04,636
Bit different from
what it used to be,
457
00:41:04,679 --> 00:41:06,159
I can tell ya.
458
00:41:08,640 --> 00:41:11,512
ARCHIVE: There will be sickness
and unemployment benefits,
459
00:41:11,556 --> 00:41:14,123
retirement pensions,
industrial injuries benefits,
460
00:41:14,167 --> 00:41:16,909
guardians allowances, widows'
benefits, maternity grants.
461
00:41:16,952 --> 00:41:19,477
WILLIAMS: It's a move towards
creating a benefit system.
462
00:41:19,520 --> 00:41:21,957
We have the idea
of sickness pay, holiday pay.
463
00:41:22,001 --> 00:41:24,177
In Britain they created
the National Health Service --
464
00:41:24,220 --> 00:41:26,875
free service from
cradle to grave.
465
00:41:34,709 --> 00:41:37,277
It's a move towards
nationalization of industry,
466
00:41:37,320 --> 00:41:39,366
it's a move towards
taxation of inheritance,
467
00:41:39,409 --> 00:41:41,324
taxation of property and wealth.
468
00:41:41,368 --> 00:41:44,110
I'm telling you,
it works out fine.
469
00:41:44,153 --> 00:41:46,025
ARCHIVE: Television, with its
promise of endless hours
470
00:41:46,068 --> 00:41:50,290
of enjoyment, entertainment,
was part of the peacetime green.
471
00:41:50,333 --> 00:41:53,859
Television -- an unparalleled
blending of private incentive
472
00:41:53,902 --> 00:41:56,514
and public service.
473
00:41:56,557 --> 00:41:57,863
WILLIAMS: In America
in the '50s,
474
00:41:57,906 --> 00:41:59,604
you see capital restrained also.
475
00:41:59,647 --> 00:42:01,910
You have rent controls
on apartments,
476
00:42:01,954 --> 00:42:03,738
you have limits on landowners.
477
00:42:03,782 --> 00:42:06,567
Capital can't just roam free,
it can't just increase itself.
478
00:42:06,611 --> 00:42:09,788
Capital must be harnessed
like some wild horse.
479
00:42:09,831 --> 00:42:12,399
TV: This is the land
of the thoroughbred.
480
00:42:12,442 --> 00:42:15,315
WILLIAMS: There is a very clear
vision that capital needs to be
481
00:42:15,358 --> 00:42:17,970
helping the people, that
actually the whole principle
482
00:42:18,013 --> 00:42:20,538
in which the rich do whatever
they want with their capital
483
00:42:20,581 --> 00:42:22,104
and that's good for the nation,
484
00:42:22,148 --> 00:42:24,585
well, that's being challenged
across the world.
485
00:42:24,629 --> 00:42:27,240
♪ I wish I had
a castle in the sky ♪
486
00:42:28,937 --> 00:42:32,767
♪ A way up high where
bluebirds like to fly ♪
487
00:42:32,811 --> 00:42:36,379
The new vision is that the '50s
is going to be the age in which
488
00:42:36,423 --> 00:42:37,859
everyone can have wealth.
489
00:42:37,903 --> 00:42:39,905
♪ ...with a hundred
rooms or more... ♪
490
00:42:39,948 --> 00:42:41,515
...some day...
491
00:42:41,559 --> 00:42:44,605
♪ With stars for windows,
clouds for rugs ♪
492
00:42:44,649 --> 00:42:46,868
♪ A rainbow for a door ♪
493
00:42:46,912 --> 00:42:49,871
People who are born
just after World War II
494
00:42:49,915 --> 00:42:53,440
had a life that no child
before them could ever imagine.
495
00:42:53,483 --> 00:42:56,008
WOMAN: I just wish
I had a decent kitchen.
496
00:43:00,055 --> 00:43:01,448
WILLIAMS: For the first time,
497
00:43:01,491 --> 00:43:04,407
hard work and study
can get you to the top.
498
00:43:08,063 --> 00:43:09,935
- Hello, Mrs. Thatcher.
- Nice to see you.
499
00:43:09,978 --> 00:43:12,938
- Have a seat.
500
00:43:14,853 --> 00:43:18,030
My father left school
at 12 or 13,
501
00:43:18,073 --> 00:43:19,814
and didn't have some
of the chances
502
00:43:19,858 --> 00:43:22,600
that you and I have
to go on to college.
503
00:43:22,643 --> 00:43:24,993
And I think you'll find
when you're a parent,
504
00:43:25,037 --> 00:43:28,475
what you're always trying to do
is to give your children
505
00:43:28,518 --> 00:43:30,912
the sort of chances
you didn't have.
506
00:43:30,956 --> 00:43:33,654
Would you like to see
a woman prime minister?
507
00:43:33,698 --> 00:43:36,265
I think it depends upon
who the person is.
508
00:43:36,309 --> 00:43:39,268
I don't think that there will
be a woman prime minister
509
00:43:39,312 --> 00:43:40,966
in my lifetime.
510
00:43:42,620 --> 00:43:44,317
WILLIAMS: What you see in
Margaret Thatcher's life
511
00:43:44,360 --> 00:43:46,885
is incredible social mobility.
512
00:43:46,928 --> 00:43:49,017
An ordinary shopkeeper's
daughter from the North,
513
00:43:49,061 --> 00:43:51,672
she went to grammar school,
she went to Oxford,
514
00:43:51,716 --> 00:43:53,674
and became the first
female prime minister,
515
00:43:53,718 --> 00:43:54,980
and, of course, wealthy.
516
00:43:55,023 --> 00:43:57,678
And that is simply
through this new society
517
00:43:57,722 --> 00:44:01,639
in which social mobility
was actually possible.
518
00:44:01,682 --> 00:44:04,816
And what you have is this real
surge of the middle classes
519
00:44:04,859 --> 00:44:07,470
and the lower middle classes
into positions of power.
520
00:45:02,003 --> 00:45:03,613
And we'll have the
kitchen right here,
521
00:45:03,657 --> 00:45:05,964
so we can see the children
playing in the yard.
522
00:45:06,007 --> 00:45:08,096
Children?! How many
you planning on?
523
00:45:08,140 --> 00:45:10,142
Not more than six, I hope.
524
00:46:23,737 --> 00:46:26,174
FUKUYAMA: The decades
immediately after World War II
525
00:46:26,218 --> 00:46:28,220
were quite remarkable.
526
00:46:29,569 --> 00:46:32,180
There was a high degree
of social consensus
527
00:46:32,224 --> 00:46:35,923
that really sprang out
of the whole war effort.
528
00:46:37,620 --> 00:46:40,710
It was so--
You had a solidarity,
529
00:46:40,754 --> 00:46:44,714
but it was on the basis of
a pretty stratified society.
530
00:46:46,281 --> 00:46:48,283
There were other forms
of inequality that existed
531
00:46:48,327 --> 00:46:50,024
in that period.
532
00:46:50,068 --> 00:46:52,461
But that began to change
after the civil rights movement
533
00:46:52,505 --> 00:46:55,987
in the 1960s and then all
of the other social movements
534
00:46:56,030 --> 00:46:57,902
that occurred thereafter.
535
00:46:57,945 --> 00:46:59,947
- ♪ You better think
- ♪ Think!
536
00:46:59,991 --> 00:47:01,862
♪ Think about what
you're trying to do to me ♪
537
00:47:01,906 --> 00:47:05,170
The negro still is not free.
538
00:47:05,213 --> 00:47:06,780
♪ ...let yourself be free
539
00:47:06,824 --> 00:47:09,087
- ♪ Oh, freedom
- ♪ Freedom!
540
00:47:09,130 --> 00:47:11,132
- ♪ Some freedom
- ♪ Freedom!
541
00:47:11,176 --> 00:47:13,047
♪ Oh, freedom
542
00:47:13,091 --> 00:47:15,658
♪ Yeah, freedom!
543
00:47:15,702 --> 00:47:17,704
FUKUYAMA: I think that,
politically,
544
00:47:17,747 --> 00:47:20,968
having a broad middle class
is quite important.
545
00:47:21,012 --> 00:47:22,970
It's part of what's
called modernization
546
00:47:23,014 --> 00:47:25,059
through this idea that
as your income rises,
547
00:47:25,103 --> 00:47:28,497
you develop a middle class
that are better educated,
548
00:47:28,541 --> 00:47:32,762
and therefore they will demand
a higher level of participation.
549
00:47:32,806 --> 00:47:35,461
- ♪ Oh, freedom
- ♪ Freedom!
550
00:47:35,504 --> 00:47:37,289
- ♪ Some freedom
- ♪ Freedom!
551
00:47:37,332 --> 00:47:40,596
♪ Oh, freedom!
Yeah, freedom! ♪
552
00:47:40,640 --> 00:47:43,121
WOMEN CHANT: We have
been victims for so long.
553
00:47:43,164 --> 00:47:45,210
- ♪ Freedom
- ♪ Oh, freedom
554
00:47:45,253 --> 00:47:48,126
- ♪ Freedom
- ♪ Give me some freedom
555
00:47:48,169 --> 00:47:51,216
♪ Oh, freedom!
556
00:47:51,259 --> 00:47:54,480
- ♪ Whoo! To the ball, baby
- ♪ To the ball ♪
557
00:47:55,960 --> 00:47:59,224
Then that kind of all
unravels in the '70s.
558
00:47:59,267 --> 00:48:03,054
ANCHOR: This is NBC Nightly
News, Wednesday October 17th.
559
00:48:03,097 --> 00:48:05,839
Good evening. The Middle East
war produced developments
560
00:48:05,883 --> 00:48:07,754
all over the world today.
561
00:48:07,797 --> 00:48:10,278
The oil-producing countries
of the Arab world
562
00:48:10,322 --> 00:48:13,194
decided to use their oil
as a political weapon.
563
00:48:13,238 --> 00:48:14,979
REPORTER: There was an
announcement in Kuwait
564
00:48:15,022 --> 00:48:17,285
that prices for Arab oil
were going up --
565
00:48:17,329 --> 00:48:20,375
a huge increase voted
in an overnight meeting
566
00:48:20,419 --> 00:48:23,988
until Israeli forces leave
occupied Arab land.
567
00:48:28,862 --> 00:48:32,344
NAIDU: This oil shock hits
all of the advanced economies,
568
00:48:32,387 --> 00:48:34,999
and oil was an input
into everything.
569
00:48:36,696 --> 00:48:38,916
REPORTER: It was announced
today that gasless Sundays
570
00:48:38,959 --> 00:48:41,919
will go into effect
as of next month.
571
00:48:41,962 --> 00:48:43,572
REPORTER: The price
of foreign oil
572
00:48:43,616 --> 00:48:46,140
had jumped from $3
to $12 a barrel.
573
00:48:47,925 --> 00:48:51,667
NAIDU: Quadrupling the price of
oil translated into this period
574
00:48:51,711 --> 00:48:54,279
where, like, prices
started to increase
575
00:48:54,322 --> 00:48:57,456
and wages weren't keeping pace,
576
00:48:57,499 --> 00:48:59,893
but then unions and workers
started demanding
577
00:48:59,937 --> 00:49:03,157
even higher wages to
keep pace with prices,
578
00:49:03,201 --> 00:49:05,594
and then what firms would do
is then increase prices
579
00:49:05,638 --> 00:49:08,902
even further to pass on
the effects of wages,
580
00:49:08,946 --> 00:49:12,645
and so you got what's
called a wage-price spiral.
581
00:49:12,688 --> 00:49:16,997
And so you had this period of
high inflation and low growth,
582
00:49:17,041 --> 00:49:20,305
so that's why it got
called stagflation.
583
00:49:28,748 --> 00:49:30,880
FOROOHAR: Globalization
is starting to happen.
584
00:49:30,924 --> 00:49:34,188
The emerging markets are
coming online in the world.
585
00:49:34,232 --> 00:49:35,755
Europe is back on its feet,
586
00:49:35,798 --> 00:49:37,757
Germany is becoming
a producer again,
587
00:49:37,800 --> 00:49:40,412
a number of European nations
are becoming more competitive.
588
00:49:44,677 --> 00:49:46,331
FOROOHAR: The global
picture is changing.
589
00:49:46,374 --> 00:49:48,594
American capital
suddenly doesn't have
590
00:49:48,637 --> 00:49:50,117
the world to itself anymore.
591
00:49:50,161 --> 00:49:52,293
♪ Tumble outta bed and I
stumble to the kitchen ♪
592
00:49:52,337 --> 00:49:54,730
♪ Pour myself
a cup of ambition... ♪
593
00:49:54,774 --> 00:49:57,081
FOROOHAR: But another thing
that's happening in the 1970s
594
00:49:57,124 --> 00:50:00,736
is you see a very kind
of siloed, financialized
595
00:50:00,780 --> 00:50:03,870
way of thinking about how to run
a corporate balance sheet --
596
00:50:03,913 --> 00:50:06,133
cut costs,
marshal your capital,
597
00:50:06,177 --> 00:50:08,701
treat labor as a cost,
not an asset.
598
00:50:08,744 --> 00:50:10,964
♪ Working 9 to 5
599
00:50:11,008 --> 00:50:13,445
♪ What a way to make a living
600
00:50:13,488 --> 00:50:15,577
♪ Barely gettin' by
601
00:50:15,621 --> 00:50:17,971
♪ It's all takin'
and no givin' ♪
602
00:50:18,015 --> 00:50:19,973
♪ They just use your mind
603
00:50:20,017 --> 00:50:22,323
♪ And you never get the credit
604
00:50:22,367 --> 00:50:26,414
♪ It's enough to drive you
crazy if you let it ♪
605
00:50:26,458 --> 00:50:28,503
FOROOHAR: Companies are not
investing in their workers,
606
00:50:28,547 --> 00:50:29,983
they're not raising wages,
607
00:50:30,027 --> 00:50:32,203
so you start to really
get that big 'X'
608
00:50:32,246 --> 00:50:36,120
where Wall Street's going here,
Main Street's going down here.
609
00:50:36,163 --> 00:50:38,513
♪ It's a rich man's game
610
00:50:38,557 --> 00:50:40,515
♪ No matter what they call it
611
00:50:40,559 --> 00:50:45,564
♪ And you spend your life
puttin' money in his wallet ♪
612
00:50:45,607 --> 00:50:47,000
♪ 9 to 5... ♪
613
00:50:50,177 --> 00:50:52,614
FOROOHAR: Germany and Japan
took a different model --
614
00:50:52,658 --> 00:50:55,095
a model in which workers sat
on the boards of companies,
615
00:50:55,139 --> 00:50:57,358
had more of a say.
616
00:50:57,402 --> 00:50:59,665
This actually gave them
a big advantage.
617
00:50:59,708 --> 00:51:01,319
They were able to use
that expertise
618
00:51:01,362 --> 00:51:02,798
and increase their efficiency,
619
00:51:02,842 --> 00:51:05,540
and eventually gain market share
from US companies.
620
00:51:07,238 --> 00:51:10,806
ARCHIVE: When it started,
America was unprepared.
621
00:51:10,850 --> 00:51:12,808
From across the ocean,
they came --
622
00:51:12,852 --> 00:51:17,335
little cars determined to change
the buying habits of a nation.
623
00:51:17,378 --> 00:51:20,164
It's a great-looking car.
What do you call it?
624
00:51:20,207 --> 00:51:22,470
- Isuzu.
- Gesundheit.
625
00:51:22,514 --> 00:51:24,472
Road-hugging, heart-pounding,
626
00:51:24,516 --> 00:51:26,605
hood-soaring, deck-sloping...
627
00:51:26,648 --> 00:51:28,998
♪ We are...
628
00:51:29,042 --> 00:51:31,871
♪ Cadillacs drive Subaru
629
00:51:31,914 --> 00:51:34,091
MAN: Reagan for president.
630
00:51:35,483 --> 00:51:37,920
Japanese production
of automobiles is almost
631
00:51:37,964 --> 00:51:41,881
twice as great per worker
as it is in America.
632
00:51:41,924 --> 00:51:44,275
We were once the greatest
producer of automobiles,
633
00:51:44,318 --> 00:51:48,061
producing more than all the
rest of the world combined.
634
00:51:48,105 --> 00:51:49,802
That is no longer true.
635
00:52:06,123 --> 00:52:08,647
- Thank you very much.
636
00:52:10,779 --> 00:52:14,043
Can anyone look at our reduced
standing in the world today
637
00:52:14,087 --> 00:52:17,438
and say, "Let's have four
more years of this"?
638
00:52:17,482 --> 00:52:20,267
CROWD: No!
639
00:52:20,311 --> 00:52:23,662
For those who've abandoned hope,
we'll restore hope
640
00:52:23,705 --> 00:52:26,317
and we'll welcome them
into a great national crusade
641
00:52:26,360 --> 00:52:30,669
- to make America great again.
642
00:53:12,885 --> 00:53:15,235
BRITISH REPORTER: Here comes
the Prime Ministerial Rover,
643
00:53:15,279 --> 00:53:17,324
bearing now Mrs. Thatcher.
644
00:53:17,368 --> 00:53:19,065
AMERICAN REPORTER:
Enter Margaret Thatcher,
645
00:53:19,108 --> 00:53:22,199
a grocer's daughter educated
among the privileged classes
646
00:53:22,242 --> 00:53:23,504
at Oxford University.
647
00:53:26,115 --> 00:53:29,249
There is now work to be done.
648
00:53:29,293 --> 00:53:31,599
In deciding that, actually,
what we need to do
649
00:53:31,643 --> 00:53:36,125
is increase the value of assets
in order to increase investment,
650
00:53:36,169 --> 00:53:38,650
some of the thinking
behind what would happen
651
00:53:38,693 --> 00:53:42,001
when you let capital free,
652
00:53:42,044 --> 00:53:45,091
you had to suppress
the power of labor.
653
00:53:49,051 --> 00:53:52,272
REPORTER: This 12-foot-high pile
is part of two weeks' rubbish
654
00:53:52,316 --> 00:53:54,535
piled outside the
local refuse depot.
655
00:53:54,579 --> 00:53:55,928
Like others in Central London,
656
00:53:55,971 --> 00:53:57,669
it's been closed
now for two weeks
657
00:53:57,712 --> 00:53:59,453
because of the dustmen's
indefinite strike.
658
00:53:59,497 --> 00:54:01,455
REPORTER: The teachers' union
are today putting forward
659
00:54:01,499 --> 00:54:04,893
a pay claim. 33,000 school
children are out of school
660
00:54:04,937 --> 00:54:07,244
in the worst-affected London
borough of Haringey.
661
00:54:07,287 --> 00:54:08,506
REPORTER: Cancelled operations
662
00:54:08,549 --> 00:54:10,595
meant empty beds
up on the wards,
663
00:54:10,638 --> 00:54:12,988
which would otherwise
have been used.
664
00:54:13,032 --> 00:54:14,816
SHAHEEN: You have to remember,
at those times,
665
00:54:14,860 --> 00:54:19,038
there were issues about strikes;
the public were upset about
666
00:54:19,081 --> 00:54:23,042
the way some labor unions
were acting in that time.
667
00:54:23,085 --> 00:54:25,566
I'm going to boil everything
because the sewage men,
668
00:54:25,610 --> 00:54:28,134
I understand,
are still on strike,
669
00:54:28,177 --> 00:54:32,094
and so it'll be polluted,
so you can get typhoid,
670
00:54:32,138 --> 00:54:33,966
can't you?
671
00:54:34,009 --> 00:54:36,055
SHAHEEN: There was a mandate
to do something about
672
00:54:36,098 --> 00:54:38,318
the power of labor
against capital.
673
00:54:38,362 --> 00:54:41,147
And it certainly is a tricky job
trying to get that right.
674
00:54:41,190 --> 00:54:44,846
This government has rolled back
the frontiers of the state
675
00:54:44,890 --> 00:54:48,154
and will roll them back
still further.
676
00:54:48,197 --> 00:54:50,896
Millions have already
become shareholders
677
00:54:50,939 --> 00:54:55,161
in British Gas, British Airways,
British airports.
678
00:55:05,911 --> 00:55:07,260
WOMAN:
Attention, all passengers.
679
00:55:07,304 --> 00:55:10,916
Flight 307 is cancelled
until further notice.
680
00:55:10,959 --> 00:55:13,135
NAIDU: This incredible
hostility to unions
681
00:55:13,179 --> 00:55:16,182
starts in the '80s
and is really crystallized
682
00:55:16,225 --> 00:55:21,100
when Reagan fires all
these air traffic controllers.
683
00:55:21,143 --> 00:55:23,494
REAGAN: I must tell those
who fail to report for duty
684
00:55:23,537 --> 00:55:28,237
this morning, if they do not
report for work within 48 hours,
685
00:55:28,281 --> 00:55:33,025
they have forfeited their jobs
and will be terminated.
686
00:55:33,068 --> 00:55:34,722
End of statement.
687
00:55:34,766 --> 00:55:37,334
NAIDU: That's kind of
seen as like a greenlight
688
00:55:37,377 --> 00:55:39,161
to a whole industry.
689
00:55:41,033 --> 00:55:43,905
Good evening. This afternoon,
President Reagan started firing
690
00:55:43,949 --> 00:55:46,778
the strikers, and the government
claimed it was ready to rebuild
691
00:55:46,821 --> 00:55:48,606
the whole system without them.
692
00:55:53,350 --> 00:55:55,090
By this evening,
federal judges had sent
693
00:55:55,134 --> 00:55:57,658
five local union leaders
to jail.
694
00:56:04,926 --> 00:56:07,538
SHAHEEN: What we've seen over
time -- and this is fundamental
695
00:56:07,581 --> 00:56:10,758
to understanding why
inequality has worsened --
696
00:56:10,802 --> 00:56:14,806
is that the share of all the
money that's made in the economy
697
00:56:14,849 --> 00:56:17,635
is going less and less to the
workers, so that is declining --
698
00:56:17,678 --> 00:56:19,985
the wage share --
699
00:56:20,028 --> 00:56:23,510
and the profit share,
essentially what those that own
700
00:56:23,554 --> 00:56:26,252
the capital will get,
is growing.
701
00:56:28,515 --> 00:56:32,476
And that is essentially
about power.
702
00:56:34,608 --> 00:56:37,437
Well, I, uh -- I appreciate the
opportunity you're giving me,
703
00:56:37,481 --> 00:56:40,919
Mr. Cromwell, as the single
largest shareholder
704
00:56:40,962 --> 00:56:43,051
in Teldar Paper, to speak.
705
00:56:45,532 --> 00:56:48,405
America has become
a second-rate power.
706
00:56:49,667 --> 00:56:51,277
Now, in the days
of the free market,
707
00:56:51,320 --> 00:56:54,454
when our country was
a top industrial power,
708
00:56:54,498 --> 00:56:58,327
there was accountability
to the stockholder.
709
00:56:58,371 --> 00:56:59,894
The Carnegies, the Mellons,
710
00:56:59,938 --> 00:57:02,636
the men that built this
great industrial empire,
711
00:57:02,680 --> 00:57:06,423
made sure of it because it
was their money at stake.
712
00:57:07,772 --> 00:57:09,861
The point is,
ladies and gentlemen,
713
00:57:09,904 --> 00:57:14,039
that greed -- for lack
of a better word --
714
00:57:14,082 --> 00:57:15,910
is good.
715
00:57:15,954 --> 00:57:17,782
Greed is right.
716
00:57:17,825 --> 00:57:19,914
Greed works.
717
00:57:19,958 --> 00:57:21,655
And greed --
718
00:57:22,526 --> 00:57:24,528
you mark my words --
719
00:57:24,571 --> 00:57:26,965
will not only save Teldar Paper,
720
00:57:27,008 --> 00:57:31,056
but that other malfunctioning
corporation called the USA.
721
00:57:31,099 --> 00:57:33,667
- Thank you very much.
722
00:57:33,711 --> 00:57:36,017
TETT: When Gordon Gekko
was seen on film saying,
723
00:57:36,061 --> 00:57:40,631
"Greed is good," that was
intended to be a howl of protest
724
00:57:40,674 --> 00:57:42,371
against the system.
725
00:57:42,415 --> 00:57:45,374
But such had the
cultural fabric changed,
726
00:57:45,418 --> 00:57:47,899
that actually for some people
coming through universities
727
00:57:47,942 --> 00:57:50,031
applying to join
investment banks,
728
00:57:50,075 --> 00:57:52,860
that phrase "Greed is good"
actually became a license
729
00:57:52,904 --> 00:57:54,775
to pursue riches.
730
00:58:03,784 --> 00:58:06,657
TETT: The era of
the yuppie came to rule.
731
00:58:06,700 --> 00:58:09,573
♪ Friday night and
everyone's moving ♪
732
00:58:09,616 --> 00:58:14,186
♪ I can feel the heat, but it's
soothing, heading down ♪
733
00:58:14,229 --> 00:58:16,667
TETT: It began to become very
cool to be an entrepreneur,
734
00:58:16,710 --> 00:58:18,495
to be riding that boom,
735
00:58:18,538 --> 00:58:22,673
and the idea of arguing for
high taxes and redistribution
736
00:58:22,716 --> 00:58:24,892
began to seem
very out of fashion.
737
00:58:24,936 --> 00:58:27,721
- ♪ We're the kids in America
- ♪ Whoa
738
00:58:27,765 --> 00:58:30,637
- ♪ We're the kids in America
- ♪ Whoa
739
00:58:30,681 --> 00:58:34,032
♪ Everybody live for
the music-go-round ♪
740
00:58:36,513 --> 00:58:39,298
The new mantra of
deregulation took hold,
741
00:58:39,341 --> 00:58:43,345
and so financial services
were deregulated dramatically,
742
00:58:43,389 --> 00:58:45,260
bankers began to
get paid a lot more,
743
00:58:45,304 --> 00:58:46,914
and then market forces
were unleashed,
744
00:58:46,958 --> 00:58:50,222
which made capitalists
a lot richer.
745
00:58:51,615 --> 00:58:53,617
♪ Hot-shot... ♪
746
00:59:02,103 --> 00:59:05,585
STIGLITZ: The big reforms
of the Reagan-Thatcher era
747
00:59:05,629 --> 00:59:09,937
were lower the tax
rates on the rich
748
00:59:09,981 --> 00:59:13,811
on the assumption it would
trickle down. Didn't happen.
749
00:59:15,160 --> 00:59:17,466
When they adopted
these kinds of policies,
750
00:59:17,510 --> 00:59:21,427
it was very clear that they
would increase inequality.
751
00:59:21,470 --> 00:59:24,952
The promise was that
the pie would be bigger,
752
00:59:24,996 --> 00:59:28,956
you would be getting
a smaller percentage
753
00:59:29,000 --> 00:59:32,830
of a bigger pie, and your
slice would get bigger.
754
00:59:34,222 --> 00:59:36,224
So in some sense,
755
00:59:37,661 --> 00:59:39,837
there was no surprise
756
00:59:39,880 --> 00:59:42,013
that there was
a growth in inequality.
757
00:59:42,056 --> 00:59:45,016
But the magnitude of
the increase in inequality
758
00:59:45,059 --> 00:59:46,757
was much larger.
759
00:59:46,800 --> 00:59:50,238
When we look at the numbers,
we can see it very vividly.
760
00:59:50,282 --> 00:59:54,852
The bottom 90% have experienced
near-stagnation.
761
00:59:54,895 --> 00:59:59,160
Most of the growth
has gone to the top 10%.
762
00:59:59,204 --> 01:00:03,338
Median income for a typical
American household is roughly
763
01:00:03,382 --> 01:00:05,993
at the level it was
a quarter century ago.
764
01:00:06,037 --> 01:00:09,518
Real wages, adjusted for
inflation, at the bottom
765
01:00:09,562 --> 01:00:12,652
are at the level they were
60 years ago.
766
01:00:16,438 --> 01:00:19,920
In fact, life expectancy
has been declining.
767
01:00:21,618 --> 01:00:25,099
These are dramatic statistics
that shows the economy
768
01:00:25,143 --> 01:00:28,494
has not been working
for most Americans.
769
01:00:37,111 --> 01:00:40,375
By the 1990s, American banks
really became the exporters
770
01:00:40,419 --> 01:00:42,813
of American capitalism,
and they went everywhere --
771
01:00:42,856 --> 01:00:45,467
they went to Europe,
they went to Asia.
772
01:00:47,121 --> 01:00:51,082
And everyone was sold our
version of a trickle-down,
773
01:00:51,125 --> 01:00:54,389
laissez-faire
deregulate capitalism.
774
01:01:00,874 --> 01:01:04,835
Life seemed to get
better in the 1990s,
775
01:01:04,878 --> 01:01:07,620
because the globalization
of the system
776
01:01:07,664 --> 01:01:11,668
made things for ordinary
people for a while cheaper,
777
01:01:11,711 --> 01:01:14,018
but then on top of that,
you get credit.
778
01:01:17,412 --> 01:01:19,458
When the credit boom took off,
779
01:01:19,501 --> 01:01:21,982
suddenly ordinary people
could get credit.
780
01:01:22,026 --> 01:01:23,723
MAN: Master the moment.
781
01:01:23,767 --> 01:01:27,422
Suddenly, extraordinarily poor
people could get credit.
782
01:01:27,466 --> 01:01:29,511
- You can apply...
- ...right over the phone.
783
01:01:29,555 --> 01:01:32,427
People with terrible credit
histories could get credit.
784
01:01:32,471 --> 01:01:34,342
MAN: There is
absolutely no risk.
785
01:01:34,386 --> 01:01:37,650
People who in no way
should be given a mortgage
786
01:01:37,694 --> 01:01:40,522
could get a mortgage.
787
01:01:40,566 --> 01:01:43,482
And the investment banks
created ever more exotic
788
01:01:43,525 --> 01:01:48,226
credit derivatives -- ways of
parceling up your bad debt
789
01:01:48,269 --> 01:01:50,794
and disguising its badness.
790
01:01:50,837 --> 01:01:54,972
That's what kept the system
going for as long as it did.
791
01:01:55,015 --> 01:01:57,017
And 2008 was where that blew up.
792
01:01:58,671 --> 01:02:00,978
Wall Street
in panic mode this morning.
793
01:02:01,021 --> 01:02:02,501
How did this happen?
794
01:02:02,544 --> 01:02:05,112
22% of homeowners are underwater
on their mortgage...
795
01:02:05,156 --> 01:02:06,505
Millions of American
homeowners...
796
01:02:06,548 --> 01:02:08,202
- Homeowners defaulting...
- Greed.
797
01:02:08,246 --> 01:02:10,770
The essence of the American
Dream could be threatened.
798
01:02:10,814 --> 01:02:13,468
- Sub-prime lending...
- Higher interest rates...
799
01:02:13,512 --> 01:02:16,210
Let's see here, uh,
balloon payment,
800
01:02:16,254 --> 01:02:19,039
37% interest compounded
every minute,
801
01:02:19,083 --> 01:02:21,259
not understanding
the contract fee,
802
01:02:21,302 --> 01:02:23,522
da, da, ba, da, ba, ba-da, bow.
803
01:02:23,565 --> 01:02:25,219
And here's your
new monthly payment.
804
01:02:26,568 --> 01:02:28,396
Listen, you, when
you gave me that money,
805
01:02:28,440 --> 01:02:31,399
you said I wouldn't have
to repay it till the future.
806
01:02:31,443 --> 01:02:34,402
This isn't the future!
It's the lousy, stinkin' now!
807
01:02:34,446 --> 01:02:39,538
Now, calm down. This country
takes care of its middle class.
808
01:02:43,194 --> 01:02:44,848
Ah, don't be sore at the banks.
809
01:02:44,891 --> 01:02:48,590
Hell, we fired our CEO and he
barely got out with $50 million.
810
01:02:50,331 --> 01:02:52,420
REPORTER: Banks are afraid
to lend money to each other.
811
01:02:52,464 --> 01:02:54,379
We're seeing a freezing
of the credit market.
812
01:02:54,422 --> 01:02:55,641
- ...credit markets.
- ...credit markets.
813
01:02:55,684 --> 01:02:57,121
REPORTER: The fear is rising.
814
01:02:57,164 --> 01:03:00,689
The fear was, and I think it was
a well-founded fear,
815
01:03:00,733 --> 01:03:03,910
that the availability of
credit would disappear,
816
01:03:03,954 --> 01:03:06,130
and perhaps our ability
to even transact,
817
01:03:06,173 --> 01:03:08,349
to even be able to access
cash to make payments,
818
01:03:08,393 --> 01:03:10,221
use a credit card,
use a debit card.
819
01:03:10,264 --> 01:03:12,832
Perhaps that would
break down also.
820
01:03:12,876 --> 01:03:15,356
REPORTER: Worst week
since the crash of 1929.
821
01:03:15,400 --> 01:03:17,141
- ...global sell-off.
- ...the Dow tumbled...
822
01:03:17,184 --> 01:03:19,621
- ...hoarding cash.
- Japan down nearly 10%.
823
01:03:19,665 --> 01:03:23,364
REPORTER: The British government
blamed American bankers.
824
01:03:23,408 --> 01:03:25,366
When it starts to unravel,
then you start to worry --
825
01:03:25,410 --> 01:03:27,847
how broadly will this
spread around the world
826
01:03:27,891 --> 01:03:30,763
and are we on the verge of
another Great Depression?
827
01:03:30,807 --> 01:03:34,854
American taxpayers woke up this
morning to learn their money
828
01:03:34,898 --> 01:03:36,334
makes up most of a...
829
01:03:36,377 --> 01:03:38,771
Big package, because
it was a big problem.
830
01:03:38,815 --> 01:03:40,468
Too big to fail.
831
01:03:40,512 --> 01:03:44,472
REPORTER: The Fed loaned
the banks some $7.7 trillion.
832
01:03:44,516 --> 01:03:47,214
Global markets soared at the
news of the US rescue plan.
833
01:03:47,258 --> 01:03:50,391
With the bail-out news,
the stock rebounded nearly 60%.
834
01:03:50,435 --> 01:03:52,785
...Hong Kong more than 8%.
London's FTSE...
835
01:03:52,829 --> 01:03:54,221
REPORTER: Stokes rose
15% in one hour --
836
01:03:54,265 --> 01:03:55,875
the largest single bounce
in FTSE history.
837
01:03:55,919 --> 01:03:58,051
Those companies
came to us and said,
838
01:03:58,095 --> 01:04:00,010
"Uh, if you don't
give us $700 billion,
839
01:04:00,053 --> 01:04:01,750
everything you love and
hold dear in this world
840
01:04:01,794 --> 01:04:03,927
- will turn to ."
841
01:04:03,970 --> 01:04:07,931
And in return for this
in no way ransom money...
842
01:04:09,454 --> 01:04:12,370
...the American people would now
be the proud owner
843
01:04:12,413 --> 01:04:14,502
of these bales of .
844
01:04:16,983 --> 01:04:20,639
JOHNSON: The collapse didn't
occur. The system was preserved
845
01:04:20,682 --> 01:04:23,903
and the opportunity to
substantially reform the system
846
01:04:23,947 --> 01:04:26,340
was set aside. The stock
market went down sharply,
847
01:04:26,384 --> 01:04:30,431
and then it came back up sharply
as a result of these measures.
848
01:04:30,475 --> 01:04:32,912
In addition, wealthy people,
rich people,
849
01:04:32,956 --> 01:04:34,827
have a lot of exposure
to the stock market,
850
01:04:34,871 --> 01:04:37,264
so they kept their jobs,
they kept their bonuses,
851
01:04:37,308 --> 01:04:39,005
the businesses they
were in were not
852
01:04:39,049 --> 01:04:42,313
substantially disrupted,
and they made more money
853
01:04:42,356 --> 01:04:43,967
through stock appreciation
854
01:04:44,010 --> 01:04:45,969
and through dividends and
through expected dividends
855
01:04:46,012 --> 01:04:48,362
than they had in the
last couple of years.
856
01:04:48,406 --> 01:04:50,364
REPORTER: Bloomberg
estimates the banks made
857
01:04:50,408 --> 01:04:53,193
a $13 billion profit
on the spread.
858
01:04:53,237 --> 01:04:56,022
REPORTER: 73 executives
from the unit that engineered
859
01:04:56,066 --> 01:04:59,417
the company's downfall
all just got bonus checks
860
01:04:59,460 --> 01:05:03,595
- worth a million or more.
- ...$1.6 billion in bonuses.
861
01:05:04,988 --> 01:05:07,555
JOHNSON: Wall Street and
the views of Wall Street
862
01:05:07,599 --> 01:05:09,601
had taken over policy.
863
01:05:11,211 --> 01:05:13,213
That's the quiet coup.
864
01:05:20,438 --> 01:05:23,571
FUKUYAMA: Democracies in
general are susceptible to this
865
01:05:23,615 --> 01:05:25,617
capture by elites.
866
01:05:27,880 --> 01:05:31,971
And unless the democracy
is renewed by the non-elites
867
01:05:32,015 --> 01:05:34,234
every now and then rising up,
868
01:05:34,278 --> 01:05:37,977
the democracy will continue
to move in this direction
869
01:05:38,021 --> 01:05:43,504
where power and wealth are
more and more concentrated.
870
01:05:43,548 --> 01:05:47,508
All across the world, you now
have this layer of oligarchs
871
01:05:47,552 --> 01:05:51,469
that use their money
to buy political influence.
872
01:06:34,555 --> 01:06:37,167
MAN: Rationally speaking,
it would make sense that
873
01:06:37,210 --> 01:06:39,865
the more of something you have,
maybe the more inclined
874
01:06:39,908 --> 01:06:42,781
you would be to share it
with other people.
875
01:06:42,824 --> 01:06:46,132
But that's not what our research
and what a lot of other research
876
01:06:46,176 --> 01:06:48,265
seems to find.
877
01:06:48,308 --> 01:06:51,964
We brought strangers
into the lab in pairs of two;
878
01:06:52,008 --> 01:06:53,748
with a flip of a coin determined
879
01:06:53,792 --> 01:06:55,359
who was going to be
a rich player
880
01:06:55,402 --> 01:06:57,926
and was going to
be a poor player.
881
01:07:01,539 --> 01:07:05,151
The rich player got two times
as much money to play the game,
882
01:07:05,195 --> 01:07:07,414
they got to roll both dice
instead of one,
883
01:07:07,458 --> 01:07:09,503
so they got to move around
the board a lot quicker,
884
01:07:09,547 --> 01:07:12,028
and that mattered because when
they moved around the board
885
01:07:12,071 --> 01:07:13,681
and passed 'Go,'
886
01:07:13,725 --> 01:07:17,163
they would collect $200,
whereas the poor person,
887
01:07:17,207 --> 01:07:19,948
they'd collect $100.
888
01:07:19,992 --> 01:07:22,081
The inequality's almost
immediately apparent
889
01:07:22,125 --> 01:07:23,909
to the players.
How couldn't it be?
890
01:07:23,952 --> 01:07:27,782
But within a couple of minutes,
dynamics start to crystallize.
891
01:07:33,571 --> 01:07:36,748
And the rich player started
to behave a little differently.
892
01:07:36,791 --> 01:07:38,532
Rich players become
more dominant.
893
01:07:40,099 --> 01:07:43,233
Rich players eat more pretzels.
894
01:07:43,276 --> 01:07:48,151
When moving their piece around
the board, they become louder.
895
01:07:48,194 --> 01:07:51,980
They start smacking the
board with their piece.
896
01:07:53,808 --> 01:07:56,376
And the rich players
were significantly ruder.
897
01:07:58,596 --> 01:08:02,121
They were far more likely
to showcase and talk about
898
01:08:02,165 --> 01:08:05,081
how well they're doing
899
01:08:05,124 --> 01:08:09,041
and to belittle the plight
of those poor players.
900
01:08:10,956 --> 01:08:14,002
So they became
less compassionate.
901
01:08:14,046 --> 01:08:17,005
These are patterns that we're
observing consistently over
902
01:08:17,049 --> 01:08:18,833
hundreds of different
individuals.
903
01:08:20,835 --> 01:08:24,361
You see people who are winning
because of the flip of a coin
904
01:08:24,404 --> 01:08:27,277
start to act as if they
actually deserve to win.
905
01:08:30,497 --> 01:08:34,806
One of the questions we ask is
"Why did you win the game?"
906
01:08:34,849 --> 01:08:36,938
And you can imagine the
rich players would say,
907
01:08:36,982 --> 01:08:38,940
"Well, I won the game because
of that flip of the coin
908
01:08:38,984 --> 01:08:42,292
and I had two times
the advantage."
909
01:08:42,335 --> 01:08:46,600
But none -- not one --
of the rich players
910
01:08:46,644 --> 01:08:50,909
attributed their inevitable
success in this game
911
01:08:50,952 --> 01:08:56,132
to that force of luck
that randomly got them
912
01:08:56,175 --> 01:08:59,787
that privileged position
in the first place.
913
01:09:01,354 --> 01:09:04,836
And when we watch patterns
of human interactions,
914
01:09:04,879 --> 01:09:08,579
people who feel entitled and
deserving of their own success
915
01:09:08,622 --> 01:09:11,886
are more willing to privilege
their own interests
916
01:09:11,930 --> 01:09:13,714
above the interests
of other people
917
01:09:13,758 --> 01:09:16,195
and often engage in
ways that undermine
918
01:09:16,239 --> 01:09:19,894
other people's welfare
so that they can get ahead.
919
01:09:19,938 --> 01:09:24,160
And that's a fairly pernicious
social consequence.
920
01:09:25,900 --> 01:09:28,686
But it's not about
people who are rich,
921
01:09:28,729 --> 01:09:32,342
but rather that the experience
of being relatively better off
922
01:09:32,385 --> 01:09:35,432
than someone seems
to affect everyone,
923
01:09:35,475 --> 01:09:38,174
or would affect everyone,
in the same way.
924
01:09:39,479 --> 01:09:41,220
Yes, we won the lottery!
925
01:09:47,095 --> 01:09:49,881
Peter, my God, what the
hell are you wearing?!
926
01:09:49,924 --> 01:09:53,101
It's a solid gold tuxedo, Lois.
I had to fight three rappers
927
01:09:53,145 --> 01:09:55,060
down at the Nonsense Store
for this.
928
01:09:55,103 --> 01:09:56,931
Look, Peter,
this is not who we are.
929
01:09:56,975 --> 01:09:58,977
I'm worried the money
is changing this family,
930
01:09:59,020 --> 01:10:00,674
and not the way you hoped.
931
01:10:00,718 --> 01:10:03,024
Well, I was hoping it would make
you shut up, so you're right.
932
01:10:03,068 --> 01:10:06,114
PIFF: When we, in experiments,
get actually poor people
933
01:10:06,158 --> 01:10:08,508
or we make poor people
feel rich,
934
01:10:08,552 --> 01:10:10,641
again, same pattern of results.
935
01:10:10,684 --> 01:10:12,120
Lois, don't you understand?
936
01:10:12,164 --> 01:10:14,122
We don't got any of our
old problems anymore.
937
01:10:14,166 --> 01:10:15,733
We don't have to worry
about paying bills,
938
01:10:15,776 --> 01:10:18,170
we don't have to worry
about saving dough.
939
01:10:18,214 --> 01:10:20,564
All we gotta do is
enjoy ourselves.
940
01:10:20,607 --> 01:10:22,522
Interested?
941
01:10:24,263 --> 01:10:26,309
Oh my God!
942
01:10:28,006 --> 01:10:31,139
Peter, it's beautiful.
Is it a blood diamond?
943
01:10:31,183 --> 01:10:32,924
Ah, the bloodiest.
944
01:10:32,967 --> 01:10:35,318
The two kids who found it were
forced to murder each other.
945
01:10:35,361 --> 01:10:37,320
Oh, Peter, I love it!
946
01:10:37,363 --> 01:10:40,888
We translate perceptions
and experiences
947
01:10:40,932 --> 01:10:43,935
of being better off
than others materially
948
01:10:43,978 --> 01:10:46,764
to being better than others.
949
01:10:46,807 --> 01:10:49,114
The mind makes that
translation, it seems.
950
01:11:04,521 --> 01:11:07,088
MASON: Once you get people
whose entire life is lived
951
01:11:07,132 --> 01:11:10,396
on a kind of plane,
you know, in First Class,
952
01:11:10,440 --> 01:11:12,877
in the bubble of
the security system,
953
01:11:12,920 --> 01:11:15,314
and your villa in three
or four different countries
954
01:11:15,358 --> 01:11:18,404
you can move to if things
get a bit unpleasant,
955
01:11:18,448 --> 01:11:20,754
what happens to taxation?
956
01:11:20,798 --> 01:11:25,019
What happens is large amounts
of wealth are moved offshore.
957
01:11:29,807 --> 01:11:33,593
For decades, individuals
and companies have moved
958
01:11:33,637 --> 01:11:37,815
their legal selves
in order to avoid paying tax
959
01:11:37,858 --> 01:11:40,992
that benefits the people
who work for them.
960
01:11:42,646 --> 01:11:45,257
So that when you come out
of the HQ of one of these
961
01:11:45,301 --> 01:11:48,042
giant trendy IT companies,
962
01:11:48,086 --> 01:11:50,828
you fall over,
you hit your head,
963
01:11:50,871 --> 01:11:53,352
and you're lying on the pavement
in a pool of blood,
964
01:11:53,396 --> 01:11:55,659
an ambulance arrives
965
01:11:55,702 --> 01:11:58,444
that has not been paid for
in any way, shape or form
966
01:11:58,488 --> 01:12:00,533
by the taxes of that company.
967
01:12:02,622 --> 01:12:05,756
That's a very new system
in capitalism.
968
01:12:07,627 --> 01:12:10,238
And it is unsustainable
969
01:12:10,282 --> 01:12:12,415
because to make it work,
970
01:12:12,458 --> 01:12:15,548
the state must have
access via taxation
971
01:12:15,592 --> 01:12:18,072
to the incomes of the rich.
972
01:12:21,946 --> 01:12:24,078
REPORTER: The EU has ordered
the Irish government
973
01:12:24,122 --> 01:12:28,039
to recover almost $15 billion
of unpaid taxes from Apple.
974
01:12:28,082 --> 01:12:30,824
REPORTER: $15 billion is
more than the four years
975
01:12:30,868 --> 01:12:33,958
of annual austerity cuts
imposed by the Irish government.
976
01:12:34,001 --> 01:12:36,700
WOMAN: Amazon's tax
benefits are illegal.
977
01:12:36,743 --> 01:12:39,224
REPORTER: Facebook paid
less UK corporation tax
978
01:12:39,267 --> 01:12:40,704
than your average teacher.
979
01:12:40,747 --> 01:12:43,054
90,000 come from zero
corporation tax.
980
01:12:43,097 --> 01:12:45,186
- Scrutinize...
- ...the rich avoiding taxes.
981
01:12:45,230 --> 01:12:46,753
Google, Microsoft...
982
01:12:46,797 --> 01:12:48,059
- McDonald's...
- Facebook...
983
01:12:52,977 --> 01:12:55,327
FOROOHAR: It just works
much better for the holders
984
01:12:55,371 --> 01:13:00,071
of capital than it does
for people on the ground.
985
01:13:00,114 --> 01:13:02,943
In particular, the giant
cash-rich tech firms
986
01:13:02,987 --> 01:13:06,251
can put people and money
wherever they want to put them.
987
01:13:06,294 --> 01:13:11,038
They just fly 35,000 feet
above national concerns.
988
01:13:11,082 --> 01:13:14,433
They create far fewer jobs
than big industrial companies
989
01:13:14,477 --> 01:13:18,176
of the past, yet they
make vastly more money.
990
01:13:25,749 --> 01:13:28,186
The great irony here is
that everything that makes
991
01:13:28,229 --> 01:13:30,493
a smart phone smart --
992
01:13:30,536 --> 01:13:33,147
the internet, GPS,
touchscreen technology --
993
01:13:33,191 --> 01:13:36,934
all that was our taxpayer money
going into federal agencies
994
01:13:36,977 --> 01:13:39,589
like DARPA that
created this stuff,
995
01:13:39,632 --> 01:13:43,506
and yet the wealth doesn't
flow back into the ecosystem.
996
01:13:43,549 --> 01:13:48,467
Irish guys pay a fee to
Google Netherlands Holding BV.
997
01:13:48,511 --> 01:13:50,338
Is that to save withholding tax?
998
01:13:50,382 --> 01:13:51,644
That's my understanding.
999
01:13:51,688 --> 01:13:53,907
It therefore goes to
Google Holdings Ireland?
1000
01:13:53,951 --> 01:13:55,735
-That's correct.
-Which is registered in Ireland
1001
01:13:55,779 --> 01:13:57,607
but administered from Bermuda?
1002
01:13:57,650 --> 01:14:00,305
-That's correct.
-So if that happens,
1003
01:14:00,348 --> 01:14:02,176
your profits actually
go to Bermuda?
1004
01:14:03,787 --> 01:14:07,443
♪ All that money,
the money is the motive ♪
1005
01:14:07,486 --> 01:14:11,447
♪ All that money,
the money is the motive ♪
1006
01:14:11,490 --> 01:14:15,407
♪ All that money,
the money she be folding ♪
1007
01:14:15,451 --> 01:14:17,191
♪ Girl put in work
1008
01:14:17,235 --> 01:14:19,411
♪ Girl, girl, put in work
1009
01:14:19,455 --> 01:14:21,108
♪ Girl put in work
1010
01:14:21,152 --> 01:14:23,415
♪ Girl, girl, put in work
1011
01:14:23,459 --> 01:14:24,764
♪ Girl put in work...
1012
01:15:01,540 --> 01:15:03,542
♪ All that money
1013
01:15:03,586 --> 01:15:05,718
- ♪ The money is the motive
- ♪ The money is the motive
1014
01:15:05,762 --> 01:15:09,417
♪ All that money,
the money she be folding ♪
1015
01:15:09,461 --> 01:15:10,723
♪ Girl, put in work...
1016
01:15:13,900 --> 01:15:15,162
♪ Girl put in work
1017
01:15:15,206 --> 01:15:17,208
♪ Girl, girl, put in work ♪
1018
01:17:06,099 --> 01:17:09,102
BREMMER: Globalization has
opened a global community up
1019
01:17:09,146 --> 01:17:10,582
to each other,
1020
01:17:10,626 --> 01:17:13,933
but it's also meant that
in the developed world,
1021
01:17:13,977 --> 01:17:18,285
corporations were able
to take jobs and move them
1022
01:17:18,329 --> 01:17:20,853
and make a lot
of money out of it.
1023
01:17:23,073 --> 01:17:26,076
And on the other hand,
the working and middle classes
1024
01:17:26,119 --> 01:17:29,688
that were doing quite well
have lost quality of life
1025
01:17:29,732 --> 01:17:31,559
and opportunities.
1026
01:17:33,039 --> 01:17:37,000
And their governments
and their corporations
1027
01:17:37,043 --> 01:17:41,482
have done very little -- in some
cases, really nothing at all --
1028
01:17:41,526 --> 01:17:43,528
to address that.
1029
01:17:46,966 --> 01:17:50,143
The United States and Europe
are vastly more divided
1030
01:17:50,187 --> 01:17:51,710
because of globalization.
1031
01:17:51,754 --> 01:17:55,192
India, The Philippines,
China are not.
1032
01:18:01,807 --> 01:18:06,116
Chinese people, they believe
that if they work hard,
1033
01:18:06,159 --> 01:18:07,944
their kids are gonna
have better lives,
1034
01:18:07,987 --> 01:18:09,728
and that's probably true.
1035
01:18:09,772 --> 01:18:12,688
But in the United States,
that's just not true anymore.
1036
01:18:19,390 --> 01:18:24,134
If you go to Beijing
or Shenzhen or Shanghai
1037
01:18:24,177 --> 01:18:26,832
or Guangzhou or
any of these sort of
1038
01:18:26,876 --> 01:18:29,705
wealthier cities in China
that have made it --
1039
01:18:29,748 --> 01:18:32,316
Shanghai,
where per capita income
1040
01:18:32,359 --> 01:18:36,363
is higher than Portugal -- you
will meet middle class Chinese,
1041
01:18:36,407 --> 01:18:38,409
and I mean global
middle class Chinese;
1042
01:18:38,452 --> 01:18:41,194
I don't mean middle class
from the Chinese context.
1043
01:18:41,238 --> 01:18:44,807
And that is a very different
China from what you saw
1044
01:18:44,850 --> 01:18:46,852
even 10 years ago.
1045
01:18:50,551 --> 01:18:53,163
China's now almost the largest
economy in the world;
1046
01:18:53,206 --> 01:18:55,643
within the next
decade it will be,
1047
01:18:55,687 --> 01:18:58,734
but it will still be
state capitalist.
1048
01:19:04,435 --> 01:19:08,700
State capitalism is where
state-owned enterprises
1049
01:19:08,744 --> 01:19:12,835
are the most important
actors in the economy.
1050
01:19:12,878 --> 01:19:15,228
These corporations are,
in principle,
1051
01:19:15,272 --> 01:19:17,927
trying to make money
and build themselves,
1052
01:19:17,970 --> 01:19:20,103
and sometimes they do
compete against each other
1053
01:19:20,146 --> 01:19:22,845
in a fairly controlled fashion.
1054
01:19:22,888 --> 01:19:26,805
But the other important Chinese
actors are what you'd call
1055
01:19:26,849 --> 01:19:29,112
privately owned
national champions.
1056
01:19:29,155 --> 01:19:32,550
So, in other words, they are
actively supported by the state,
1057
01:19:32,593 --> 01:19:34,421
even though they're
privately held,
1058
01:19:34,465 --> 01:19:36,554
and they benefit accordingly.
1059
01:19:40,732 --> 01:19:43,430
Also you have hundreds
of millions of people
1060
01:19:43,474 --> 01:19:45,693
who are quite poor,
1061
01:19:45,737 --> 01:19:47,434
but they want state capitalism.
1062
01:19:47,478 --> 01:19:50,829
It's fine for them, as long as
they can make enough money
1063
01:19:50,873 --> 01:19:54,137
to ensure that their
kids will do better.
1064
01:20:34,438 --> 01:20:37,702
FUKUYAMA: China does show what
freeing up capital will do to
1065
01:20:37,745 --> 01:20:40,052
income distribution.
1066
01:20:40,096 --> 01:20:43,621
Capital really has to be
regulated much, much more
1067
01:20:43,664 --> 01:20:46,972
strictly than things
in the real economy.
1068
01:20:50,019 --> 01:20:53,718
There's a fundamental difference
between liberalization
1069
01:20:53,761 --> 01:20:55,459
of capital markets
1070
01:20:55,502 --> 01:20:59,767
and liberalization of trade
and goods and services.
1071
01:20:59,811 --> 01:21:04,163
This was one of the big lessons
of the Great Depression.
1072
01:21:06,252 --> 01:21:09,647
FOROOHAR: Modern capitalism
is all about the free movement
1073
01:21:09,690 --> 01:21:11,779
of global capital,
1074
01:21:11,823 --> 01:21:14,826
and the financial system
itself has changed
1075
01:21:14,870 --> 01:21:16,654
over the last 40 years.
1076
01:21:16,697 --> 01:21:19,787
The financial industry has about
doubled in size as a percentage
1077
01:21:19,831 --> 01:21:22,921
of the economy, and that's
actually created slower growth,
1078
01:21:22,965 --> 01:21:25,793
not faster growth.
1079
01:21:25,837 --> 01:21:28,535
When Adam Smith,
the father of modern capitalism,
1080
01:21:28,579 --> 01:21:31,582
was thinking up the idea
of the free market system,
1081
01:21:31,625 --> 01:21:33,366
he was living in
a very different world.
1082
01:21:33,410 --> 01:21:35,629
Hey, why not? My own business.
1083
01:21:35,673 --> 01:21:39,024
All you need's a little capital,
a little push and an idea.
1084
01:21:39,068 --> 01:21:41,592
FOROOHAR: Small and mid-sized
family-owned businesses
1085
01:21:41,635 --> 01:21:42,854
were the norm.
1086
01:21:42,898 --> 01:21:44,595
I wouldn't wear that hat
to a dog fight.
1087
01:21:44,638 --> 01:21:46,902
WOMAN: Why, there isn't a decent
hat in the entire village.
1088
01:21:46,945 --> 01:21:50,818
Why not? Women's hats!
My own business!
1089
01:21:50,862 --> 01:21:52,690
FOROOHAR: He believed that
the financial markets
1090
01:21:52,733 --> 01:21:55,432
were just an intermediary --
they were supposed to take
1091
01:21:55,475 --> 01:21:58,261
everyone's savings,
hold them as bank deposits,
1092
01:21:58,304 --> 01:22:03,092
and then lend them out to the
hairdresser down the street.
1093
01:22:03,135 --> 01:22:05,311
Not to be too cliché,
but it's kind of the
1094
01:22:05,355 --> 01:22:08,706
"It's a Wonderful Life"
model of banking.
1095
01:22:10,229 --> 01:22:12,188
I think if Adam Smith
time-warped,
1096
01:22:12,231 --> 01:22:16,453
he would have no idea what to
make of a "too big to fail" bank
1097
01:22:16,496 --> 01:22:19,108
or a giant multinational
company that's doing business
1098
01:22:19,151 --> 01:22:20,805
in 120 different countries,
1099
01:22:20,848 --> 01:22:23,460
all of which have different
regulatory systems.
1100
01:22:23,503 --> 01:22:25,462
It's a completely
different world.
1101
01:22:35,341 --> 01:22:40,607
Statistics today show
that only 15% of money
1102
01:22:40,651 --> 01:22:43,132
coming out of the largest
financial institutions
1103
01:22:43,175 --> 01:22:46,178
is actually going to that kind
of productive lending.
1104
01:22:46,222 --> 01:22:48,876
So what's the other 85% doing?
1105
01:22:48,920 --> 01:22:51,531
It's just moving around
this closed loop
1106
01:22:51,575 --> 01:22:53,185
of the financial system --
1107
01:22:53,229 --> 01:22:56,972
its assets being bought
and sold by the same people;
1108
01:22:57,015 --> 01:22:59,887
their value going up,
up, up, up, up.
1109
01:23:02,499 --> 01:23:06,894
MASON: For the rich, it's easier
to keep your wealth away
1110
01:23:06,938 --> 01:23:09,245
from productive, risky activity,
1111
01:23:09,288 --> 01:23:12,552
and this is producing
a new social story.
1112
01:23:15,120 --> 01:23:18,515
It's easier to build a property,
1113
01:23:18,558 --> 01:23:20,517
and maybe you don't
fill that property,
1114
01:23:20,560 --> 01:23:23,433
maybe all the apartments in
the property aren't filled,
1115
01:23:23,476 --> 01:23:25,913
but you know in five years' time
that property will be worth
1116
01:23:25,957 --> 01:23:30,527
so much more, that your business
is really to sit on assets
1117
01:23:30,570 --> 01:23:33,095
and hope their value rises,
1118
01:23:33,138 --> 01:23:36,054
rather than to try and make
money by risking your money
1119
01:23:36,098 --> 01:23:40,798
in activities like open a
factory or invent something new.
1120
01:23:43,888 --> 01:23:46,151
EDWARDS: If you own a house,
you're making capital gains
1121
01:23:46,195 --> 01:23:49,633
out of that far in excess
of what people get
1122
01:23:49,676 --> 01:23:51,678
through just regular jobs.
1123
01:23:51,722 --> 01:23:54,377
Therefore, people have
become property speculators.
1124
01:23:54,420 --> 01:23:58,468
And this changes the whole way
the housing situation operates.
1125
01:23:59,860 --> 01:24:02,211
And, essentially,
it starts dividing.
1126
01:24:03,734 --> 01:24:05,431
This housing crisis
that's happening
1127
01:24:05,475 --> 01:24:07,129
really throughout the West
is something
1128
01:24:07,172 --> 01:24:11,524
that particularly
affects the young.
1129
01:24:11,568 --> 01:24:15,963
Most people view this as some
sort of generational fight.
1130
01:24:16,007 --> 01:24:18,444
The baby boomers benefited
from buying houses
1131
01:24:18,488 --> 01:24:20,359
when they were relatively cheap,
1132
01:24:20,403 --> 01:24:23,797
and therefore have a very nice
nest egg for their retirement,
1133
01:24:23,841 --> 01:24:28,672
and it's the young people
that can't even rent cheaply.
1134
01:24:28,715 --> 01:24:31,588
Those at the bottom,
I think, are quite polarized --
1135
01:24:31,631 --> 01:24:34,243
angry, in fact.
1136
01:24:34,286 --> 01:24:37,463
These houses, essentially,
earn more money than they do,
1137
01:24:37,507 --> 01:24:39,596
and they have to rent them.
1138
01:24:48,953 --> 01:24:51,434
MASON: It transmits to the poor
or middle class person
1139
01:24:51,477 --> 01:24:55,220
that the best thing they can do
is to hope that their home
1140
01:24:55,264 --> 01:24:57,048
rises so much in value
1141
01:24:57,092 --> 01:24:59,268
that it offsets all the other
problems in their life,
1142
01:24:59,311 --> 01:25:01,052
like that their pension
was destroyed
1143
01:25:01,096 --> 01:25:02,445
or that they lost their job
1144
01:25:02,488 --> 01:25:05,404
or that their kids
are gonna be poor.
1145
01:25:15,371 --> 01:25:19,201
SHAHEEN: Young people
are naturally more hopeful.
1146
01:25:19,244 --> 01:25:22,160
But they are aware,
they are acutely aware,
1147
01:25:22,204 --> 01:25:24,989
that they've been
given a raw deal.
1148
01:25:26,947 --> 01:25:29,080
You know, why is it,
to educate yourself,
1149
01:25:29,124 --> 01:25:33,476
you have to get yourself
into £50,000 of debt?
1150
01:25:33,519 --> 01:25:37,175
And a lot of young
people feel infantiled.
1151
01:25:37,219 --> 01:25:41,136
Why does my incredibly smart
26-year-old brother-in-law
1152
01:25:41,179 --> 01:25:42,833
still have to live at home?
1153
01:25:42,876 --> 01:25:46,489
He's asking that,
my in-laws are asking that.
1154
01:26:01,547 --> 01:26:05,247
What we've told people is that,
"You're not poor;
1155
01:26:05,290 --> 01:26:07,031
you're a millionaire-in-waiting.
1156
01:26:07,074 --> 01:26:09,512
And because of that,
don't worry about inequality,
1157
01:26:09,555 --> 01:26:11,383
just focus on how
hard you're working
1158
01:26:11,427 --> 01:26:15,170
and trying to run, run,
run, run up that hill,"
1159
01:26:17,650 --> 01:26:22,916
which is ironic, because
societies that are more unequal
1160
01:26:22,960 --> 01:26:25,136
have less social mobility.
1161
01:26:27,573 --> 01:26:30,141
The rungs of the ladder
grow apart,
1162
01:26:30,185 --> 01:26:34,841
people have the money to make
sure they stay at the top,
1163
01:26:34,885 --> 01:26:38,410
and it means it's harder
for people to climb.
1164
01:26:38,454 --> 01:26:43,067
That's something that you find
again and again in the data.
1165
01:26:43,894 --> 01:26:46,505
The system is rigged.
1166
01:26:46,549 --> 01:26:50,466
And people aren't stupid --
they recognize that.
1167
01:27:05,655 --> 01:27:07,787
TETT: Essentially, what's
happening is that you're
1168
01:27:07,831 --> 01:27:10,573
getting an economy which
is more and more productive,
1169
01:27:10,616 --> 01:27:14,185
but where the gains of those
productivity increases
1170
01:27:14,229 --> 01:27:18,668
are going into the hands of
a very small number of people.
1171
01:27:18,711 --> 01:27:20,365
And where there is job growth
1172
01:27:20,409 --> 01:27:22,280
is at the lower end
of the spectrum,
1173
01:27:22,324 --> 01:27:25,762
which is often low-paid,
fairly unsatisfactory work.
1174
01:27:32,508 --> 01:27:35,467
Our labor market is shifting.
1175
01:27:35,511 --> 01:27:39,776
More and more, it classifies
people as "self-employed."
1176
01:27:39,819 --> 01:27:42,257
And what that means is that
companies won't owe them
1177
01:27:42,300 --> 01:27:46,043
holiday pay,
won't owe them a pension,
1178
01:27:46,086 --> 01:27:49,220
and those individual workers
have to make sure
1179
01:27:49,264 --> 01:27:52,136
that they can look after
themselves if they're sick,
1180
01:27:52,179 --> 01:27:54,530
if they want to take a holiday.
1181
01:27:59,186 --> 01:28:01,319
MASON: You know what,
when Piketty says
1182
01:28:01,363 --> 01:28:04,670
that the future for capitalism
is this highly illegal,
1183
01:28:04,714 --> 01:28:09,501
highly socially immobile future,
it's already happening.
1184
01:28:15,551 --> 01:28:17,857
TETT: America's about to see
the biggest wealth transfer
1185
01:28:17,901 --> 01:28:21,948
in history take place, as
the generation which made money
1186
01:28:21,992 --> 01:28:23,733
after World War II
1187
01:28:23,776 --> 01:28:27,345
is passing that wealth on
to their children.
1188
01:28:36,702 --> 01:28:39,139
Something in the order
of $12 trillion or more
1189
01:28:39,183 --> 01:28:41,228
is going to be passed on
to the next generation
1190
01:28:41,272 --> 01:28:44,144
in the next 10 to 15 years.
1191
01:28:44,188 --> 01:28:47,800
And that will be invested in a
way that it creates more wealth.
1192
01:30:47,529 --> 01:30:50,836
There's now research showing
that in advanced economies,
1193
01:30:50,880 --> 01:30:54,492
that two-thirds of the
population is now on track
1194
01:30:54,536 --> 01:30:56,712
to be poorer than their parents,
1195
01:30:56,755 --> 01:30:59,628
which is a huge, huge
mega political trend.
1196
01:31:13,250 --> 01:31:16,253
MASON: People on the streets
are starting to say, "Enough" --
1197
01:31:21,737 --> 01:31:25,175
...enough of the inequality
and enough of not having a story
1198
01:31:25,218 --> 01:31:28,047
about how this
ever gets better.
1199
01:31:28,091 --> 01:31:29,614
And people are reaching out
1200
01:31:29,658 --> 01:31:31,573
for the nearest thing
they can cling to,
1201
01:31:31,616 --> 01:31:33,923
and often that is their
identity, their ethnicity,
1202
01:31:33,966 --> 01:31:36,186
their religion.
1203
01:31:43,062 --> 01:31:46,457
And they lash out against the
nearest enemy they can find.
1204
01:31:46,501 --> 01:31:48,720
BORIS JOHNSON: Vast amounts
of unskilled labor
1205
01:31:48,764 --> 01:31:50,548
coming into this country.
1206
01:31:50,592 --> 01:31:53,116
DONALD TRUMP: They're bringing
drugs, they're bringing crime,
1207
01:31:53,159 --> 01:31:54,334
they're rapists.
1208
01:32:00,602 --> 01:32:03,082
But ultimately,
none of that will work.
1209
01:32:03,126 --> 01:32:07,130
Blaming your neighbor
doesn't make you any richer.
1210
01:34:37,193 --> 01:34:39,238
BREMMER: You know, if you wanna
think about what the longer term
1211
01:34:39,282 --> 01:34:43,025
implications are, I mean, the
truly dystopian implications,
1212
01:34:43,068 --> 01:34:44,809
you think about horses.
1213
01:34:46,245 --> 01:34:49,118
I mean, we used to
have a lot of horses.
1214
01:34:50,119 --> 01:34:51,729
End of the 19th century, right,
1215
01:34:51,773 --> 01:34:55,515
I mean, horses were critical
for industrialization.
1216
01:34:55,559 --> 01:34:57,779
And then they weren't,
1217
01:34:57,822 --> 01:35:00,346
because you have all these
industrial processes
1218
01:35:00,390 --> 01:35:04,002
that are much more efficient
than horses are.
1219
01:35:05,656 --> 01:35:08,659
And, you know, for all
of the technophiles
1220
01:35:08,703 --> 01:35:12,881
that are saying, "Technology
has always created more jobs,
1221
01:35:12,924 --> 01:35:14,839
and so it will continue to,"
1222
01:35:14,883 --> 01:35:18,103
I say, "Technology has always
created more jobs,
1223
01:35:18,147 --> 01:35:22,978
as long as you had things
that human beings could do."
1224
01:35:28,810 --> 01:35:32,074
But when technology
starts actually getting at
1225
01:35:32,117 --> 01:35:35,468
the basic functionality
of a human being,
1226
01:35:38,210 --> 01:35:42,998
then human beings start becoming
the equivalent of horses.
1227
01:35:45,130 --> 01:35:46,871
And that doesn't mean
1228
01:35:46,915 --> 01:35:50,179
that we can no longer
have meaningful lives,
1229
01:35:50,222 --> 01:35:52,355
but it means that you
have to change your model
1230
01:35:52,398 --> 01:35:56,098
because capitalism is
no longer about labor.
1231
01:36:00,885 --> 01:36:04,541
And the problem is this is
coming soon, soon, soon.
1232
01:36:05,847 --> 01:36:09,154
You look at driverless
technologies.
1233
01:36:09,198 --> 01:36:13,768
Driving is, by the way, the
single largest or second largest
1234
01:36:13,811 --> 01:36:17,859
employer of people in every
one of the 50 US states,
1235
01:36:17,902 --> 01:36:21,776
and within 10 years,
most of those jobs are gone.
1236
01:36:24,474 --> 01:36:29,784
So you will address capital,
because if you don't, right,
1237
01:36:29,827 --> 01:36:33,352
you are going to have
very serious problems.
1238
01:36:53,024 --> 01:36:54,809
NAIDU: We're leaving
an industrial economy
1239
01:36:54,852 --> 01:36:58,029
and going to
a post-industrial economy.
1240
01:36:58,073 --> 01:37:00,466
And we have to make choices
1241
01:37:00,510 --> 01:37:03,078
about which future
we wind up in.
1242
01:37:05,515 --> 01:37:09,562
You can have abundance that
is very unequally distributed,
1243
01:37:09,606 --> 01:37:13,218
where we have the robots
that can do anything,
1244
01:37:13,262 --> 01:37:16,091
but the only people that own
the robots are a very small
1245
01:37:16,134 --> 01:37:18,136
segment of society,...
1246
01:37:19,921 --> 01:37:22,749
basically like Elysium,
where a bunch of people
1247
01:37:22,793 --> 01:37:25,230
live in ecologically
protected spaces
1248
01:37:25,274 --> 01:37:29,800
and everyone else is living in,
like, a hot, putrid mess.
1249
01:37:32,629 --> 01:37:35,458
And so it's
a political problem.
97778
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