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Downloaded from
YTS.MX

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Official YIFY movies site:
YTS.MX

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(WHIMSICAL MUSIC)

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(RADIO FREQUENCY ADJUSTS)

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MALE REPORTER:
promise from the authorities

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that there would be some change,

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the pressure for reform
is gathering pace

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and is gathering support.

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Differences between capitalism
and communism is so strong

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that only concrete and barbed
wire could hold them...

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WOMAN: We want another way
to reconstruct our society.

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(PEOPLE CHANT)

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FEMALE REPORTER: On the streets
of East German cities,

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scores of people demanding
democratic reforms

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were dragged off by...
(STATIC CRACKLES)

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MALE REPORTER: Security
police dragged individuals

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from the crowd, beating
them over the head,

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and throwing them into
the back of waiting lorries.

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(PEOPLE SHOUT)

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MAN: I was born in 1971.

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I turned 18 in 1989, when
the Berlin Wall came down.

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I remember being glued
to my radio

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listening to the fall of
the communist regime.

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(ENGINE RUMBLES)

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As a student, I travelled to
Romania, Hungary and Russia.

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(SOFT MUSIC)

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(RAIN POURS)

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So I personally know the impact
this collapse had.

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I saw an economic
and social system

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in a complete state of failure.

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(SNIFFS)

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A political system that had
promised human emancipation,

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but instead ended up
producing misery

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and incredible
political repression.

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(PEOPLE SHOUT)

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(TENSE MUSIC)

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(PEOPLE SHOUT)

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(SLAM)

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And when the fraud of the
communist promise was exposed

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and it collapsed,

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it greatly reinforced
the capitalist argument.

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The problem was that
it went too far.

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(LORDE'S "ROYALS')
Cristal, Maybach

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Diamonds on your timepiece

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Jet planes, islands,
tigers on a gold leash

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We don't care

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We aren't caught up
in your love affair

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PIKETTY: The fall
of the Soviet Union

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led to infinite faith in
the deregulation of markets

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accompanied by a new

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glorification of
private property.

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As a consequence,

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we're facing challenges
of rising inequality

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and the rise of nationalism
and xenophobic tensions,

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like there was
in the very unequal world

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before World War I.

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LORDE: We didn't come
from money

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But every song's like
gold teeth, Grey Goose

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Trippin' in the bathroom

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Bloodstains, ball gowns,
trashing the hotel room

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We don't care...

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PIKETTY: And I'm very scared
for the 21st century

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because what I see
in the historical data

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suggests we risk returning
to a capitalist system

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similar to the highly
unequal world

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of the 18th and 19th centuries.

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- And we'll never be royals
- Royals

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It don't run in our blood

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That kind of lux
just ain't for us

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We crave a different
kind of buzz

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- Let me be your ruler
- Ruler

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You can call me Queen B

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And, baby, I'll rule

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I'll rule, I'll rule, I'll rule

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Let me live that fantasy

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(PEACEFUL, WHIMSICAL MUSIC)

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(AIRPLANE BUZZES)

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(TRAIN WHISTLES)

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(HORSE WHINNIES)

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(TENSE, PERCUSSIVE MUSIC)

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PIKETTY: In 18th century Europe,

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capital is concentrated
in the hands

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of a very small group of people.

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The aristocracy represents
1% of the population.

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The boundaries of money
limit social mobility,

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and hard work and education

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don't allow you
to climb very high.

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Through the evocative
power of literature,

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film and popular culture

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we can see the importance
of capital throughout history.

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It's a story much darker

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than the idyllic vision

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of a march towards
progress and light.

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(GRUNTS, OINKS)

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WOMAN: In the 18th century,
life for the poor is grim.

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If you're lucky,
you might be a servant.

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Everyone else is
a hand-to-mouth laborer,

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moving from place to place,
following the work,

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being treated by the landowners
exactly as they please.

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And of course there
were no benefits,

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there's no health service,
there's no free schooling,

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there's absolutely nothing.

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So poverty is a death sentence.

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And what's very striking is
the average life expectancy

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in the 18th century is 17.

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(CHILLING, DESPONDENT MUSIC)

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MAN: At the time, what capital
really looks like is

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money, money-lending
and land-owning.

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You have a guy that sits in a
fort and basically claims taxes

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on all the people
that work his land.

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And we sort of know
what that looks like

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from all kinds of movies.

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MAN: Really, with what I get
from these peasants,

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I can hardly afford
to pay my perfume bills.

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What about Roulet?
Has he paid his rent?

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Roulet died last week.

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(ECHOES) He died
with his rent unpaid.

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- What did he die of?
- Hunger.

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Hunger is an indulgence
with these peasants.

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Oh, I keep forgetting, Gabelle,

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you're a humanitarian,
aren't you?

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You think that one person
is as good as another...

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A naive notion
so contradicted by the facts.

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(BIRDSONG)

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WILLIAMS: For the rich,
inheritance is the obsession.

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It's a very strict code.

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The eldest son gets the capital.

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He gets everything...
He gets the money,

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he gets the house,
he gets the land...

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And that makes him
incredibly powerful,

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just through
an accident of birth.

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These land-owning men,
these first sons,

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they also have a huge
amount of political power,

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because a lot of them are
the MPs, they're elites.

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And as a consequence,
they are driven by a desire

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to protect their own income,
to protect their own world,

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and it simply doesn't
occur to them

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that poor people deserve
some redistribution of wealth.

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Taxation, they resist
very strongly.

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And this is the way that
the aristocracy worked,

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not just in Britain,
but all through Europe,

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and the aim is to conserve
the aristocratic power.

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(PENSIVE MUSIC)

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The examples that
Thomas Piketty has

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of Jane Austen and Balzac,
they're very fitting,

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because when you read
Jane Austen,

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it is all about money,

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and this money is not
earned through work,

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it's not earned through
owning businesses,

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it's earned through land,
it's inherited land.

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(JOVIAL FOLK TUNE PLAYS)

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(LAUGHTER)

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WILLIAMS: Mr. Darcy, for
example, in Pride and Prejudice,

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he has this huge estate.

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He doesn't even
have to be there.

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This land just creates
money for him.

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- How good of you to come.
- (ALL WHISPER)

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LIZZIE: He looks miserable,
poor sod.

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CHARLOTTE: Miserable he may be,

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but poor he most certainly
is not.

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- LIZZIE: Tell me.
- CHARLOTTE: 10,000 a year,

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and he owns half of Derbyshire.

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- The miserable half?
- (SNORTS SOFTLY)

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(CHUCKLES)

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WILLIAMS: Jane Austen
created a fantasy

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that you could get your
hands on this wealth

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if you were just a bit
fun and a bit witty.

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But the reality is there's
no way Mr. Darcy would marry

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girls like Lizzie Bennet,

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who actually haven't got
a penny to their names.

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He would marry an heiress,
possibly even a cousin,

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and create this, sort of,
megalopolis estate.

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(JOVIAL FOLK TUNE RESUMES)

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WILLIAMS: Money marries money.
There's nothing to do with love.

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And what we see now,

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almost a cycling back
to the 18th century.

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(FUNKY VOGUE MUSIC)

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In Britain, inherited wealth
is everything... again.

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Nowadays, 1% of the population
owns 70% of our land.

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KAMAIYAH:
I've been broke all my life

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Now wonder

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How does it feel to be rich?

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How does it feel to be rich?

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Oh, I done worked all my life

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Now wonder

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How does it feel to just live?

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How does it feel to just live?

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WOMAN: There's always been an
elite, which is usually adept at

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reproducing its privilege
through generations,

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monopolizing both economic
and social and cultural capital.

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The way the elite stays in power
and passes on their privilege

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to the next generation

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is also by shaping
the way that we think.

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KAMAIYAH:
How does it feel to be rich?

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00:10:55,280 --> 00:10:57,699
How does it feel to be ri-i-ich?

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00:10:57,782 --> 00:11:00,034
How does it feel to just live?

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00:11:00,118 --> 00:11:02,078
How does it feel to just live?

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00:11:02,162 --> 00:11:04,330
(CAR HORNS BLARE)

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00:11:04,414 --> 00:11:06,249
TETT: Traditionally,
economists have argued

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00:11:06,332 --> 00:11:09,294
that inequality is
a very powerful driver

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00:11:09,377 --> 00:11:11,796
of progress and innovation

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because the idea is that
competition, essentially,

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makes people try harder.

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00:11:18,678 --> 00:11:22,056
The problem is that
extreme inequality

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increasingly seems to be a
source of great economic stress,

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00:11:26,352 --> 00:11:29,856
social stress
and political stress.

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00:11:29,939 --> 00:11:33,484
Because if you have
a situation where an elite

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are so rigidly protective
of their ranks

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00:11:36,279 --> 00:11:38,865
that nobody can ever rise,
there's no social mobility,

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you tend to end up with
a full-blown revolution.

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00:11:41,159 --> 00:11:43,119
(TENSE, DRAMATIC MUSIC)

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00:11:50,543 --> 00:11:53,588
PIKETTY: Life in the 18th
century is not static.

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00:11:53,671 --> 00:11:56,591
We see the development
of new political ideas

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demanding equal rights

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00:12:00,053 --> 00:12:03,556
and an end to privileges
linked to birth and nobility.

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00:12:03,640 --> 00:12:05,600
(PEOPLE SHOUT)

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00:12:07,227 --> 00:12:09,270
WILLIAMS: In the French
Revolution, the banner is

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00:12:09,354 --> 00:12:12,190
"Liberté, égalité, fraternité.”

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00:12:12,273 --> 00:12:14,543
It's going to be brotherhood,
everyone's going to be free.

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00:12:14,567 --> 00:12:17,070
(GUNFIRE)

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00:12:17,153 --> 00:12:19,906
But yet within
a tiny amount of time,

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00:12:19,989 --> 00:12:22,158
you have this
government of bankers,

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00:12:22,242 --> 00:12:25,954
and what they do is start to
create the elites once more.

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BOY: This is the land
that fought for liberty

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00:12:30,124 --> 00:12:32,919
Now when we fight,
we fight for bread

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Here is the thing about equality

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00:12:35,755 --> 00:12:38,716
Everyone's equal
when they're dead

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Take your place,
take your chance

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00:12:41,469 --> 00:12:43,930
Vive la France Vive la France!

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00:12:44,013 --> 00:12:46,057
- (MEN YELL)
- ALL CHANT: Vive la France!

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00:12:47,767 --> 00:12:50,395
PIKETTY: It turns out the
French Revolution is based,

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in part, on hypocrisy.
With a vision of equality

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00:12:53,356 --> 00:12:56,192
that is, at best, a little
optimistic or naive

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00:12:56,276 --> 00:12:58,611
and at worst a little cynical.

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00:13:00,863 --> 00:13:05,660
We imagine that equality
is going to occur naturally

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00:13:05,743 --> 00:13:08,162
or spontaneously,
a bit like a fairy tale.

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00:13:08,955 --> 00:13:09,956
(LAUGHTER)

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00:13:10,039 --> 00:13:11,624
(LIGHT MUSIC)

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00:13:11,708 --> 00:13:14,794
But the reality is that we also
need political institutions,

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00:13:14,877 --> 00:13:20,008
an education system,
health care, a transport system

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00:13:20,091 --> 00:13:25,430
and a tax system that targets
the highest incomes.

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00:13:25,513 --> 00:13:29,475
But none of this
was put in place

243
00:13:29,559 --> 00:13:31,769
after the French Revolution.

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00:13:32,603 --> 00:13:34,480
(DARK, DESPONDENT MUSIC)

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00:13:39,986 --> 00:13:41,654
WILLIAMS: What we see
in the late 18th

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00:13:41,738 --> 00:13:44,449
and early 19th centuries
is the Industrial Revolution.

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00:13:44,532 --> 00:13:47,827
It replaces the work
of people's hands with machines,

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00:13:47,910 --> 00:13:50,455
so you bring in machines to
make wool, to make cotton,

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00:13:50,538 --> 00:13:53,124
to make all kinds
of commodities.

250
00:13:53,207 --> 00:13:56,419
This makes goods faster,
it standardizes them,

251
00:13:56,502 --> 00:13:59,339
and this makes more profit.

252
00:13:59,422 --> 00:14:03,760
NAIDU: Capital's no longer this
fixed thing that's your land

253
00:14:03,843 --> 00:14:07,472
or even your ability
to lend money.

254
00:14:07,555 --> 00:14:12,727
You finally figure out that
you can expand your own factory

255
00:14:12,810 --> 00:14:16,856
by, kind of, selling stuff,
keeping the profits,

256
00:14:16,939 --> 00:14:20,985
then reinvesting those profits
in expanding your factory.

257
00:14:21,069 --> 00:14:24,113
And that's kind of what
capitalism in its modern form

258
00:14:24,197 --> 00:14:27,241
really lets us do... is that
capital becomes this thing

259
00:14:27,325 --> 00:14:30,244
that can, kind of,
perpetually expand.

260
00:14:30,328 --> 00:14:32,288
(PENSIVE MUSIC)

261
00:14:34,332 --> 00:14:37,919
But the gap between wages and
productivity is substantial,

262
00:14:38,002 --> 00:14:40,880
and you have these kind of
feudal legacies of labor

263
00:14:40,963 --> 00:14:44,258
persisting very, very
late into the game.

264
00:14:44,342 --> 00:14:46,886
British master and servant law
meant that it was a crime

265
00:14:46,969 --> 00:14:50,014
for you to quit your employer
without permission.

266
00:14:52,141 --> 00:14:54,394
And, you know, this is
getting actively used

267
00:14:54,477 --> 00:14:57,980
in the mid-19th century, during,
like, the heyday of capitalism

268
00:14:58,064 --> 00:15:00,900
in England... the most advanced
country in the world...

269
00:15:00,983 --> 00:15:03,069
And they're throwing
workers in jail,

270
00:15:03,152 --> 00:15:05,071
and they're being beaten

271
00:15:05,154 --> 00:15:07,990
because it's a crime
to go on strike.

272
00:15:10,243 --> 00:15:12,245
(DOG BARKS IN DISTANCE)

273
00:15:14,163 --> 00:15:16,165
(POIGNANT MUSIC)

274
00:15:35,852 --> 00:15:39,772
MAN: This whole idea developed
around escaping the Old World

275
00:15:39,856 --> 00:15:44,402
and setting up a new,
more egalitarian society.

276
00:15:44,485 --> 00:15:47,447
When the new world countries
were being set up...

277
00:15:47,530 --> 00:15:49,657
So New Zealand,
Australia, Canada...

278
00:15:49,740 --> 00:15:53,578
These places were being set up
by these refugees, essentially,

279
00:15:53,661 --> 00:15:55,288
fleeing Europe

280
00:15:55,371 --> 00:15:58,958
at a time that capitalism
was really taking hold.

281
00:16:00,668 --> 00:16:03,588
And that's why a lot of these
people wanted to get out

282
00:16:03,671 --> 00:16:08,551
of these countries...
They wanted a flatter society.

283
00:16:08,634 --> 00:16:13,306
It was this idea of moving
beyond the class system,

284
00:16:13,389 --> 00:16:16,225
but it was done largely
in a laissez-faire way.

285
00:16:16,309 --> 00:16:20,396
It wasn't a political movement,
by and large.

286
00:16:20,480 --> 00:16:23,483
And very quickly it was the
wealthy that started dominating

287
00:16:23,566 --> 00:16:25,443
right from the start.

288
00:16:27,195 --> 00:16:29,864
NAIDU: If you're a white man
in sort of, like, 1800-ish,

289
00:16:29,947 --> 00:16:31,574
Australia and the US...

290
00:16:31,657 --> 00:16:35,244
These places are, like,
the best places for you to go.

291
00:16:35,328 --> 00:16:38,748
You've got this wide-open
frontier; it's filled with land.

292
00:16:38,831 --> 00:16:40,833
But the big constraint
on your production

293
00:16:40,917 --> 00:16:44,003
is your ability
to mobilize labor.

294
00:16:44,086 --> 00:16:46,130
So if you're
a small family farmer,

295
00:16:46,214 --> 00:16:48,424
the only labor you can
mobilize on to the frontier

296
00:16:48,508 --> 00:16:50,259
is your kids.

297
00:16:52,428 --> 00:16:55,264
But if you're a slave owner, you
can basically go to New Orleans,

298
00:16:55,348 --> 00:16:57,475
you can take out a loan,
use that loan

299
00:16:57,558 --> 00:17:01,145
to buy a bunch of slaves in
the New Orleans slave market,

300
00:17:01,229 --> 00:17:04,106
then take them out to
the Alabama frontier

301
00:17:04,190 --> 00:17:06,400
and start clearing land
and growing cotton.

302
00:17:07,985 --> 00:17:09,987
(SOLEMN MUSIC)

303
00:17:18,996 --> 00:17:22,250
And you're again able to
take the profits from that

304
00:17:22,333 --> 00:17:25,503
and expand, buy more slaves,
buy more land,

305
00:17:25,586 --> 00:17:28,381
and so you can again now
think of the slave economy

306
00:17:28,464 --> 00:17:32,510
as participating in this
circuit of accumulation.

307
00:17:36,806 --> 00:17:39,934
But also being a slave owner
didn't just mean that you had

308
00:17:40,017 --> 00:17:42,603
access to the labor
of your slaves,

309
00:17:42,687 --> 00:17:46,732
it also meant you had
increased access to capital,

310
00:17:46,816 --> 00:17:50,486
because you can use
your slaves as collateral.

311
00:17:57,451 --> 00:18:00,329
So if you, basically, are
looking to lend to somebody

312
00:18:00,413 --> 00:18:03,165
and they can offer
an equivalent amount of

313
00:18:03,249 --> 00:18:05,084
slave collateral versus land,

314
00:18:05,167 --> 00:18:06,669
you'd prefer the
slave collateral

315
00:18:06,752 --> 00:18:09,839
because it's much easier
to move them around

316
00:18:09,922 --> 00:18:12,466
or resell them or
something like that.

317
00:18:12,550 --> 00:18:14,468
(SOLEMN MUSIC)

318
00:18:16,220 --> 00:18:21,684
PIKETTY: The 19th century is
when the division of labour,

319
00:18:21,767 --> 00:18:25,730
inequality and power are
established worldwide...

320
00:18:27,898 --> 00:18:30,401
First with slavery,

321
00:18:30,484 --> 00:18:33,654
and then with incredibly
violent colonial domination.

322
00:18:33,738 --> 00:18:36,157
(MILITARY SNARE DRUM ROLLS)

323
00:18:37,450 --> 00:18:39,452
(DRILL SERGEANT YELLS)

324
00:18:41,912 --> 00:18:46,584
It's very difficult to say how
much of European wealth today

325
00:18:46,667 --> 00:18:50,212
comes from their colonial past.

326
00:18:50,296 --> 00:18:52,798
But what is clear is that
the crucial advantage

327
00:18:52,882 --> 00:18:55,760
won at the time of the
Industrial Revolution

328
00:18:55,843 --> 00:18:59,597
was closely linked
with military force.

329
00:18:59,680 --> 00:19:02,183
(BUGLE CALL BLARES)

330
00:19:04,435 --> 00:19:05,936
MAN: Attack!

331
00:19:06,020 --> 00:19:07,647
(HORSES HOOVES THUNDER,
BLADES RING)

332
00:19:07,730 --> 00:19:10,274
(PEOPLE SCREAM, SOLDIERS YELL)

333
00:19:10,983 --> 00:19:12,193
(WOMAN GROANS)

334
00:19:12,276 --> 00:19:14,612
(CHILD SCREAMS, BLADE RINGS)

335
00:19:15,821 --> 00:19:17,948
(BUGLE CALL BLARES)

336
00:19:18,032 --> 00:19:22,203
PIKETTY: From 1870 to 1914,
the United Kingdom and France,

337
00:19:22,286 --> 00:19:25,456
who are the two main
colonial empires,

338
00:19:25,539 --> 00:19:29,001
own so much around
the rest of the world

339
00:19:29,085 --> 00:19:31,879
and it brings them
so much profit,

340
00:19:31,962 --> 00:19:34,465
interest, dividends, rents

341
00:19:34,548 --> 00:19:37,677
that they can afford
to keep on investing

342
00:19:37,760 --> 00:19:40,221
and become owners
of more of the world.

343
00:19:42,682 --> 00:19:44,892
So the rest of the world
works for them.

344
00:19:46,102 --> 00:19:48,104
(DARK, TENSE MUSIC)

345
00:19:53,192 --> 00:19:55,027
WILLIAMS: It's no good
speeding up production

346
00:19:55,111 --> 00:19:57,947
if there's no one to buy
the stuff.

347
00:19:58,030 --> 00:20:02,618
So fashion fuels the
Industrial Revolution.

348
00:20:02,702 --> 00:20:06,205
By the 19th century, the cult
of fashion is all-encompassing.

349
00:20:06,288 --> 00:20:08,416
It's come down even
to the working classes.

350
00:20:08,499 --> 00:20:13,379
Even working class women
are trying to stay in fashion.

351
00:20:13,462 --> 00:20:17,049
The idea that, "You can't wear
that. That's from last season,”

352
00:20:17,133 --> 00:20:20,344
that will be very strange to
a 16th or 17th century person.

353
00:20:20,428 --> 00:20:22,471
They think,
"Well, it's still working,

354
00:20:22,555 --> 00:20:26,642
it's still hard-wearing.
I'll wear the same outfit."

355
00:20:26,726 --> 00:20:28,686
(INTRIGUING MUSIC)

356
00:20:32,398 --> 00:20:34,191
And the industry that
accelerates the fastest

357
00:20:34,275 --> 00:20:37,111
in the 19th century is
the industry about Christmas.

358
00:20:37,194 --> 00:20:39,155
(ROUSING MUSIC)

359
00:20:45,327 --> 00:20:47,121
In the 18th and 17th century,

360
00:20:47,204 --> 00:20:49,457
Christmas was
a very low-key affair.

361
00:20:49,540 --> 00:20:52,668
It was usually about drinking
with your friends and relations.

362
00:20:52,752 --> 00:20:54,503
It wasn't really
about present-giving;

363
00:20:54,587 --> 00:20:58,090
that was perhaps in New Year.

364
00:20:58,174 --> 00:21:00,718
But by the mid-19th century,
we have the Christmas cracker,

365
00:21:00,801 --> 00:21:02,678
the Christmas card,
the Christmas tree.

366
00:21:02,762 --> 00:21:04,555
People are bankrupting
themselves

367
00:21:04,638 --> 00:21:08,058
to have a yearly Christmas,
and it really was seized upon

368
00:21:08,142 --> 00:21:12,021
by the manufacturers as a way
to make a huge amount of money.

369
00:21:13,355 --> 00:21:15,649
(TRAIN HORN BLARES)

370
00:21:15,733 --> 00:21:17,669
NAIDU: Just as you were getting
all these new technologies

371
00:21:17,693 --> 00:21:20,905
like the railroad and the
telegraph and mass production

372
00:21:20,988 --> 00:21:23,032
and the corporation...
All of these new innovations,

373
00:21:23,115 --> 00:21:24,509
all of this additional
production...

374
00:21:24,533 --> 00:21:27,745
And inequality
becomes very, very large.

375
00:21:29,705 --> 00:21:32,124
It's actually this period
of enormous conflict,

376
00:21:32,208 --> 00:21:36,003
where you have open wars
in the mines in Colorado

377
00:21:36,086 --> 00:21:40,716
between strikers and armed
militia hired by capitalists.

378
00:21:42,343 --> 00:21:44,845
(PEOPLE YELL)

379
00:21:44,929 --> 00:21:48,682
And the overwhelming use
of the US Federal Army

380
00:21:48,766 --> 00:21:51,894
in this period
is strike-breaking.

381
00:21:51,977 --> 00:21:54,313
(GUNFIRE POPS, PEOPLE SHOUT)

382
00:22:00,528 --> 00:22:02,530
(TRAIN WHEELS CLACK)

383
00:22:07,868 --> 00:22:09,870
(ELECTRICITY WHIRRS)

384
00:22:18,963 --> 00:22:22,258
And similarly, today,
we have this whole

385
00:22:22,341 --> 00:22:24,343
transformation of
the economy happening,

386
00:22:26,011 --> 00:22:28,389
both with trade
and with technology,

387
00:22:28,472 --> 00:22:30,975
that exactly have the
sort of same property of

388
00:22:31,058 --> 00:22:33,394
creating lots of monopolies.

389
00:22:33,477 --> 00:22:36,480
(RADIO STATIC CRACKLES,
PHONES BEEP)

390
00:22:37,898 --> 00:22:39,567
And so it's generating, again,

391
00:22:39,650 --> 00:22:42,403
a small class of very,
very wealthy people.

392
00:22:42,486 --> 00:22:43,571
- 22...
- 43 million.

393
00:22:43,654 --> 00:22:46,866
- 75 million.
- $107 million.

394
00:22:46,949 --> 00:22:48,033
(HITS GAVEL)
Sold.

395
00:22:49,076 --> 00:22:51,078
(TENSE MUSIC)

396
00:22:51,745 --> 00:22:54,748
(PEOPLE CHATTER)

397
00:22:56,876 --> 00:23:00,170
PIKETTY: Around 1914, in Paris,

398
00:23:00,254 --> 00:23:05,759
1% of the population
owns 70% of all assets.

399
00:23:07,803 --> 00:23:11,682
And in contrast,
two-thirds of the population

400
00:23:11,765 --> 00:23:13,809
die without any assets.

401
00:23:15,686 --> 00:23:18,981
You have this rise in
nationalism and competition

402
00:23:19,064 --> 00:23:20,524
between European countries,

403
00:23:20,608 --> 00:23:23,277
partly due to very strong
social tensions

404
00:23:23,360 --> 00:23:25,654
linked to the stagnant
standard of living

405
00:23:25,738 --> 00:23:29,533
and very high levels
of inequality.

406
00:23:33,412 --> 00:23:36,874
And competition between
countries, nationalism,

407
00:23:36,957 --> 00:23:40,085
is often used by elites

408
00:23:40,169 --> 00:23:43,297
to make people
forget class conflict

409
00:23:43,380 --> 00:23:46,592
and instead focus on
national identity.

410
00:23:56,602 --> 00:24:00,397
And all this contributes
to the arrival of

411
00:24:00,481 --> 00:24:05,069
the First World War
in the summer of 1914.

412
00:24:05,152 --> 00:24:07,529
ARCHIVE: In Berlin,
the Germans know the hour

413
00:24:07,613 --> 00:24:09,865
of glory is at hand.

414
00:24:09,949 --> 00:24:11,700
(TRIUMPHANT MARCHING BAND MUSIC)

415
00:24:11,784 --> 00:24:14,161
NAIDU: There's like a cultural
militarism that's happening

416
00:24:14,244 --> 00:24:16,997
on the Continent, and they're
competing with each other

417
00:24:17,081 --> 00:24:20,376
over both imperial territory
and trade routes.

418
00:24:20,459 --> 00:24:22,962
ARCHIVE: The warlord is
ceaseless, indefatigable,

419
00:24:23,045 --> 00:24:26,090
as he makes the rounds
of his armies.

420
00:24:26,173 --> 00:24:28,384
WILLIAMS: The British Empire
was so powerful;

421
00:24:28,467 --> 00:24:30,153
they had a quarter of
the world's population.

422
00:24:30,177 --> 00:24:32,221
The other countries wanted
a piece of the cake.

423
00:24:32,304 --> 00:24:36,266
And Germany, in particular,
wanted a piece of the cake.

424
00:24:38,644 --> 00:24:41,271
NAIDU: A lot of these
new capitalists

425
00:24:41,355 --> 00:24:44,400
are still, kind of, basically
feudal in their outlook.

426
00:24:44,483 --> 00:24:47,653
So particularly in Germany,
you have these Junkers

427
00:24:47,736 --> 00:24:49,488
that are these
big industrialists,

428
00:24:49,571 --> 00:24:51,508
but they also think there's
nothing better for society

429
00:24:51,532 --> 00:24:52,700
than a good fight.

430
00:24:52,783 --> 00:24:54,743
(EXPLOSION POPS)

431
00:25:01,375 --> 00:25:03,919
WILLIAMS: Britain and the Allied
powers take on Germany

432
00:25:04,003 --> 00:25:07,214
in what they think is going
to be a short, sharp shock

433
00:25:07,297 --> 00:25:08,799
over in a few months' time.

434
00:25:08,882 --> 00:25:10,926
(CANNONS FIRE, MEN SCREAM)

435
00:25:14,555 --> 00:25:16,849
(EXPLOSIONS WHISTLE, BOOM)

436
00:25:21,770 --> 00:25:26,150
Instead, it goes on for years
and decimates both populations.

437
00:25:26,233 --> 00:25:28,193
(LOUD EXPLOSION)

438
00:25:30,487 --> 00:25:32,489
(FLIES BUZZ)

439
00:25:34,116 --> 00:25:36,118
(MELANCHOLY MUSIC)

440
00:25:41,498 --> 00:25:45,335
World War I is, at its base,
a fight over capital.

441
00:25:47,337 --> 00:25:51,258
And we see this massive
post-war economic crash.

442
00:25:53,510 --> 00:25:56,180
So, you have this new
idea after World War I,

443
00:25:56,263 --> 00:25:59,141
basically born out of the fact
that the government is bankrupt,

444
00:25:59,224 --> 00:26:02,686
that tax is not bad,
that it actually could be good.

445
00:26:02,770 --> 00:26:04,372
And the only way you're
going to get money

446
00:26:04,396 --> 00:26:06,607
is by taxing the aristocracy.

447
00:26:06,690 --> 00:26:09,026
(FIRE WHOOSHES, CRACKLES)

448
00:26:09,109 --> 00:26:11,570
There is nothing in the working
class and the middle class

449
00:26:11,653 --> 00:26:13,572
left to tax.

450
00:26:13,655 --> 00:26:17,242
So you see the beginning of
the drop in aristocratic power.

451
00:26:18,911 --> 00:26:22,289
And also what you see in the
'20s is the growth of the power

452
00:26:22,372 --> 00:26:24,792
of women and also
of the working classes...

453
00:26:24,875 --> 00:26:27,127
Both of them, essentially,
are saying to the government,

454
00:26:27,211 --> 00:26:29,755
"Look, we worked really
hard for you in this war.

455
00:26:29,838 --> 00:26:32,716
We sacrificed. You need
to give us something back.”

456
00:26:32,800 --> 00:26:36,136
So suddenly the whole principle
that the working classes

457
00:26:36,220 --> 00:26:39,807
and women must sit there and put
up with the way that society is,

458
00:26:39,890 --> 00:26:42,184
is completely
overturned in the '20s.

459
00:26:42,267 --> 00:26:44,812
(CAR HORNS HONK, CHEERING)

460
00:26:44,895 --> 00:26:46,695
ARCHIVE: All of the crowds
of the Empire City,

461
00:26:46,772 --> 00:26:48,982
the wonder city, the windy city,
the passion city,

462
00:26:49,066 --> 00:26:50,484
the people, yes.

463
00:26:50,567 --> 00:26:53,821
(GINGER ROGERS'
'WE'RE IN THE MONEY')

464
00:26:53,904 --> 00:26:57,866
GINGER: Gone are my blues,
and gone are my tears

465
00:26:57,950 --> 00:27:01,954
I've got good news
to shout in your ears

466
00:27:02,037 --> 00:27:05,582
The long-lost dollar
has come back to the fold

467
00:27:05,666 --> 00:27:08,877
With silver, you can
turn your dreams to gold!

468
00:27:08,961 --> 00:27:10,921
Oh, we're in the money

469
00:27:11,964 --> 00:27:13,715
We're in the money

470
00:27:13,799 --> 00:27:18,554
Let's lend it, spend it,
send it rolling around

471
00:27:18,637 --> 00:27:20,323
ARCHIVE: All of the crowd
get the big money...

472
00:27:20,347 --> 00:27:22,808
2 million, 5 million...
Make a pile and raise a pile.

473
00:27:22,891 --> 00:27:25,352
WOMAN: The '20s was maybe
irrational exuberance.

474
00:27:25,435 --> 00:27:27,479
ARCHIVE: Watch us grow!
What am I bid? Going up!

475
00:27:27,563 --> 00:27:29,314
WOMAN: There was a boom
in stock prices,

476
00:27:29,398 --> 00:27:32,818
but people kept bidding
into the stock market,

477
00:27:32,901 --> 00:27:36,738
because people always think
there's magic in Wall Street.

478
00:27:36,822 --> 00:27:39,700
You know, we have a mythology
in this country, in particular,

479
00:27:39,783 --> 00:27:42,286
that what's good for Wall Street
is good for Main Street,

480
00:27:42,369 --> 00:27:44,663
but that's really
never been true.

481
00:27:44,746 --> 00:27:47,749
We're in the money,
I'll say we're in the money

482
00:27:47,833 --> 00:27:51,670
We've got a lot of what
it takes to get along

483
00:27:51,753 --> 00:27:55,215
FOROOHAR: A lot of banks were
selling products that they knew

484
00:27:55,299 --> 00:27:58,051
were absolutely no good.

485
00:27:58,135 --> 00:28:02,764
There were dodgy bankers
doing dodgy deals knowingly.

486
00:28:02,848 --> 00:28:04,850
There weren't a lot of
regulations in place.

487
00:28:04,933 --> 00:28:07,936
It was a real free-for-all
of capital.

488
00:28:09,646 --> 00:28:11,732
MAN: The bubble of the 1920s

489
00:28:11,815 --> 00:28:14,484
was characteristic of
many other bubbles...

490
00:28:14,568 --> 00:28:16,737
A kind of euphoria that happens.

491
00:28:16,820 --> 00:28:19,489
Stocks go up, you can
borrow against that stock.

492
00:28:19,573 --> 00:28:21,283
You use that money
to buy more stock,

493
00:28:21,366 --> 00:28:26,038
the price goes up even more,
and everybody's feeling giddy.

494
00:28:26,121 --> 00:28:28,165
(BELL RINGS)

495
00:28:28,248 --> 00:28:30,709
(LIGHT MUSIC)

496
00:28:32,794 --> 00:28:34,755
FOROOHAR: At the same time,
you've got tremendous

497
00:28:34,838 --> 00:28:37,549
dislocation going on
in the job market...

498
00:28:37,633 --> 00:28:39,134
A lot of people
getting very rich,

499
00:28:39,218 --> 00:28:40,969
but a lot of workers
at the bottom,

500
00:28:41,053 --> 00:28:43,180
not enough in the middle.

501
00:28:43,263 --> 00:28:48,268
Credit was then being offered to
kind of paper over that divide.

502
00:28:53,565 --> 00:28:57,402
STIGLITZ: That credit cycle
fed this bubble,

503
00:28:57,486 --> 00:29:00,364
and like every other bubble,

504
00:29:00,447 --> 00:29:01,573
it broke.

505
00:29:01,657 --> 00:29:03,492
(PEOPLE SHOUT, JEER)

506
00:29:03,575 --> 00:29:04,952
FOROOHAR: This time around,

507
00:29:05,035 --> 00:29:08,413
a number of bankers
actually went to jail,

508
00:29:08,497 --> 00:29:10,999
and there really were some
regulatory changes, you know,

509
00:29:11,083 --> 00:29:13,669
like, in particular the
Glass-Steagall Depression-era

510
00:29:13,752 --> 00:29:15,712
legislation that actually
fixed the banking system

511
00:29:15,796 --> 00:29:19,841
and made it safer...
Until it was overturned in 1999.

512
00:29:28,433 --> 00:29:30,769
(SOLEMN MUSIC)

513
00:29:30,852 --> 00:29:34,022
After the financial crash,
countries all around the world

514
00:29:34,106 --> 00:29:36,817
also ended up getting
in a trade war.

515
00:29:36,900 --> 00:29:38,360
There were tariffs
that were imposed,

516
00:29:38,443 --> 00:29:40,362
and that created
a snowball cycle,

517
00:29:40,445 --> 00:29:42,864
which led to more pain globally,

518
00:29:44,449 --> 00:29:48,370
and that helped to provoke
the Great Depression.

519
00:29:49,204 --> 00:29:51,957
(SOLEMN MUSIC)

520
00:29:52,040 --> 00:29:54,334
PIKETTY: If you read John
Steinbeck's Grapes of Wrath,

521
00:29:54,418 --> 00:29:58,088
you realise the extent
of the shock caused by

522
00:29:58,171 --> 00:30:00,841
the complete collapse
of economic activity.

523
00:30:02,384 --> 00:30:03,784
They told me to
tell you to get off,

524
00:30:03,844 --> 00:30:05,262
and that's what I'm telling ya.

525
00:30:05,345 --> 00:30:07,222
MULEY: You mean get off
of my own land?

526
00:30:07,306 --> 00:30:09,474
<i>AGENT: Don't go to blaming me,
it ain't my fault.</i>

527
00:30:09,558 --> 00:30:11,935
- Whose fault is it?
- You know who owns the land...

528
00:30:12,019 --> 00:30:14,062
The Shawnee Land
and Cattle Company.

529
00:30:14,146 --> 00:30:16,040
MULEY: And who's the Shawnee
Land and Cattle Company?

530
00:30:16,064 --> 00:30:17,941
AGENT: It ain't nobody!
It's a company.

531
00:30:18,025 --> 00:30:19,735
SON: They got a president,
ain't they?

532
00:30:19,818 --> 00:30:22,237
They got somebody knows what
a shotgun's for, ain't they?!

533
00:30:22,321 --> 00:30:23,548
What's the use
of pickin' on him?

534
00:30:23,572 --> 00:30:25,115
He ain't nothin'
but the manager.

535
00:30:25,198 --> 00:30:27,034
And he's half crazy hisself
tryin' to keep up

536
00:30:27,117 --> 00:30:28,452
with his orders from the East.

537
00:30:28,535 --> 00:30:31,747
- Then who do we shoot?
- Brother, I don't know.

538
00:30:31,830 --> 00:30:33,558
- If I did, I'd tell ya.
- (CAR ENGINE STARTS)

539
00:30:33,582 --> 00:30:35,542
I just don't know
who's to blame.

540
00:30:35,625 --> 00:30:37,937
MULEY: I'm right here to tell
you, mister, there ain't nobody

541
00:30:37,961 --> 00:30:39,880
gonna push me off my land!

542
00:30:39,963 --> 00:30:43,383
My grandpa took up
this land 70 years ago.

543
00:30:43,467 --> 00:30:46,636
My pa was born here.
We was all born on it!

544
00:30:46,720 --> 00:30:49,056
And some of us was killed on it!

545
00:30:52,309 --> 00:30:54,311
(SOLEMN MUSIC)

546
00:31:07,824 --> 00:31:10,118
PIKETTY: Banks fail
one after another,

547
00:31:10,202 --> 00:31:12,913
which results in
everyone losing their savings.

548
00:31:12,996 --> 00:31:16,541
And this decreases in
demand in other areas,

549
00:31:16,625 --> 00:31:19,025
causing a cascading phenomena
of bankruptcy and unemployment.

550
00:31:24,800 --> 00:31:26,802
(SOLEMN PIANO MUSIC)

551
00:31:51,410 --> 00:31:54,955
The crisis of the 1930s creates
such a strong trauma

552
00:31:55,038 --> 00:31:58,542
that leads to the
public and politicians

553
00:31:58,625 --> 00:32:02,003
holding capitalism accountable.

554
00:32:02,087 --> 00:32:04,256
(TENSE, PERCUSSIVE MUSIC)

555
00:32:04,339 --> 00:32:06,216
(PEOPLE SHOUT, SMACKS)

556
00:32:19,396 --> 00:32:21,398
(PEOPLE SHOUT)

557
00:32:24,693 --> 00:32:26,695
(GUNSHOT POPS)

558
00:32:27,654 --> 00:32:29,656
(ALL CHANT, SHOUT)

559
00:32:30,282 --> 00:32:32,117
(GUNFIRE)

560
00:32:33,869 --> 00:32:37,664
MAN: The pain in the United
States had become so great,

561
00:32:37,747 --> 00:32:43,211
so grave... absolute poverty...
And as a consequence of that,

562
00:32:43,295 --> 00:32:46,006
the willingness to
make political solutions

563
00:32:46,089 --> 00:32:48,675
that were severe.

564
00:32:48,758 --> 00:32:53,305
ROOSEVELT: This nation is asking
for action and action now.

565
00:32:55,056 --> 00:32:58,602
BREMMER: Price-fixing, massive
change in labor rates...

566
00:32:58,685 --> 00:33:01,354
All of these things under FDR

567
00:33:01,438 --> 00:33:04,649
was something that Americans
hadn't seen before,

568
00:33:04,733 --> 00:33:07,777
and absolutely that led to
massive infrastructure build

569
00:33:07,861 --> 00:33:10,655
and it led to extraordinary
redistribution.

570
00:33:12,115 --> 00:33:14,242
The existence
of a communist alternative

571
00:33:14,326 --> 00:33:18,830
scared the capitalist world
into thinking that if it didn't

572
00:33:18,914 --> 00:33:22,125
at least address some of
the basic inequality issues,

573
00:33:22,209 --> 00:33:25,045
that they would lose
the battle for ideas.

574
00:33:25,128 --> 00:33:27,088
(LOUD EXPLOSION)

575
00:33:31,134 --> 00:33:33,762
In the New Deal itself,
Roosevelt actually borrowed

576
00:33:33,845 --> 00:33:37,265
some ideas... the heavy state
involvement in the economy;

577
00:33:37,349 --> 00:33:39,309
heavy regulation.

578
00:33:39,392 --> 00:33:41,520
(MELLOW MUSIC)

579
00:33:41,603 --> 00:33:45,190
There was a clear recognition
that unless the state tried to

580
00:33:45,273 --> 00:33:46,983
do something about jobs

581
00:33:47,067 --> 00:33:51,238
and do enough redistribution
to keep people from starving,

582
00:33:51,321 --> 00:33:54,783
that you wouldn't have
basic social stability.

583
00:33:57,160 --> 00:33:59,162
(GLASS SHATTERS)

584
00:34:03,041 --> 00:34:05,043
(DARK, OMINOUS MUSIC)

585
00:34:18,890 --> 00:34:21,118
WILLIAMS: The Wall Street crash
creates poverty in America,

586
00:34:21,142 --> 00:34:22,435
it creates poverty in Britain,

587
00:34:22,519 --> 00:34:24,396
but it has a massive
effect on Germany,

588
00:34:24,479 --> 00:34:28,483
because Germany is already poor.
After World War I,

589
00:34:28,567 --> 00:34:31,111
they were given these very
punitive reparations...

590
00:34:31,194 --> 00:34:34,114
They had to give huge amounts
of money to the other countries.

591
00:34:34,197 --> 00:34:36,616
And what you have is
this horrific inflation

592
00:34:36,700 --> 00:34:37,993
in the Weimar Republic...

593
00:34:38,076 --> 00:34:39,953
Germany as it was known
in the 1920s...

594
00:34:40,036 --> 00:34:41,705
In which, basically,
at one point,

595
00:34:41,788 --> 00:34:46,334
a whole barrel of banknotes
cannot buy you a loaf of bread.

596
00:34:46,418 --> 00:34:49,462
(PEOPLE SHOUT)

597
00:34:49,546 --> 00:34:52,591
We can absolutely link, as tight
as that, the rise of fascism

598
00:34:52,674 --> 00:34:56,052
in Europe in the 1930s
and extreme poverty.

599
00:34:58,179 --> 00:35:00,181
(TENSE, SOMBER MUSIC)

600
00:35:13,278 --> 00:35:15,238
And you can see
how seductive it is

601
00:35:15,322 --> 00:35:17,782
when someone like Adolf Hitler
comes up and says,

602
00:35:17,866 --> 00:35:21,286
"I'll make Germany great again.
We'll be powerful again.”

603
00:35:21,369 --> 00:35:23,330
And really what he's saying is,

604
00:35:23,413 --> 00:35:26,374
"The reason why we're so poor in
Germany is because of Britain,

605
00:35:26,458 --> 00:35:31,004
is because of America, is
because of the rest of Europe.”

606
00:35:31,087 --> 00:35:33,131
(SOMBER MUSIC CONTINUES)

607
00:35:43,266 --> 00:35:46,478
These downtrodden people
were so open, so vulnerable

608
00:35:46,561 --> 00:35:49,397
to the rise of fascism
and the call of racism,

609
00:35:49,481 --> 00:35:50,857
the call of exclusionism

610
00:35:50,940 --> 00:35:53,985
and the call of
invading other countries.

611
00:35:54,069 --> 00:35:56,029
(UNSETTLING MUSIC)

612
00:36:05,080 --> 00:36:08,625
HITLER: We want to see
no more class divisions.

613
00:36:10,126 --> 00:36:13,129
We want to be one people.

614
00:36:13,213 --> 00:36:18,176
And you, my youth,
are to be this people.

615
00:36:19,844 --> 00:36:21,721
(TRIUMPHANT, PATRIOTIC MUSIC)

616
00:36:21,805 --> 00:36:26,434
ARCHIVE: One American
airplane factory... one of many.

617
00:36:26,518 --> 00:36:29,354
One bomber...
Thousands on the way...

618
00:36:30,855 --> 00:36:33,274
An angel of death.

619
00:36:33,358 --> 00:36:35,819
NAIDU: What really gets rid of
the Depression is transforming

620
00:36:35,902 --> 00:36:37,821
the economy into World War II.

621
00:36:37,904 --> 00:36:40,365
And the scale of this is just
something that humanity

622
00:36:40,448 --> 00:36:42,325
had never seen before.

623
00:36:43,159 --> 00:36:45,120
(CLICKING, WHIRRING)

624
00:36:45,203 --> 00:36:47,288
The governments of all
the societies involved

625
00:36:47,372 --> 00:36:49,541
just kind of take
over production,

626
00:36:49,624 --> 00:36:51,251
and this is an industrial war,

627
00:36:51,334 --> 00:36:54,546
so production is, kind of,
the terms under which,

628
00:36:54,629 --> 00:36:57,716
in the long run,
this will be won or lost.

629
00:36:59,300 --> 00:37:01,302
(TENSE MUSIC)

630
00:37:04,347 --> 00:37:07,183
The labor movement
got a lot of political power.

631
00:37:07,267 --> 00:37:09,018
Like, if you're
producing for the war,

632
00:37:09,102 --> 00:37:13,857
you have to automatically
recognize a union.

633
00:37:13,940 --> 00:37:16,234
And then just also raising
the money to pay for that

634
00:37:16,317 --> 00:37:18,653
just involved raising taxes.

635
00:37:20,029 --> 00:37:23,074
This period was the
last gasp of feudalism,

636
00:37:23,158 --> 00:37:26,161
and it took this to finally
purge the influence

637
00:37:26,244 --> 00:37:29,622
of the aristocracy
in advanced countries.

638
00:37:30,373 --> 00:37:32,375
(OMINOUS MUSIC)

639
00:37:38,423 --> 00:37:40,425
(ENGINES HUM)

640
00:37:43,511 --> 00:37:45,680
(OMINOUS MUSIC CONTINUES)

641
00:37:48,308 --> 00:37:50,310
(AIR RAID SIREN WAILS)

642
00:37:51,436 --> 00:37:53,438
(TORPEDOES WHISTLE)

643
00:37:56,858 --> 00:37:58,526
(EXPLOSIONS BOOM)

644
00:37:58,610 --> 00:38:00,862
(RAPID GUNFIRE, BOMBS BOOM)

645
00:38:05,408 --> 00:38:07,410
(PROPELLER WHIRRS)

646
00:38:09,412 --> 00:38:11,414
(BOMBS WHISTLE, BOOM)

647
00:38:13,750 --> 00:38:15,752
(EXPLOSIONS BOOM)

648
00:38:18,630 --> 00:38:20,632
(JARRING MUSIC)

649
00:38:24,093 --> 00:38:26,095
(MUSIC FADES)

650
00:38:27,597 --> 00:38:29,599
(RESONATING RUMBLING)

651
00:38:38,691 --> 00:38:40,693
(WATER LAPS GENTLY)

652
00:38:49,035 --> 00:38:50,620
(QUIET, MELANCHOLY MUSIC)

653
00:39:00,880 --> 00:39:04,801
PIKETTY: The wars themselves
are used to destroy capital.

654
00:39:06,636 --> 00:39:11,099
Firstly, there are bombings
that destroy entire cities.

655
00:39:11,182 --> 00:39:12,225
But at the same time,

656
00:39:12,308 --> 00:39:13,935
this only accounts for a third

657
00:39:14,018 --> 00:39:16,104
of the total loss of capital.

658
00:39:17,939 --> 00:39:20,942
So where do the other
two-thirds come from?

659
00:39:21,025 --> 00:39:25,029
A third is from inflation that
destroys the public debt,

660
00:39:25,113 --> 00:39:30,326
which was lent by the
citizens to finance the war.

661
00:39:30,410 --> 00:39:33,955
And then there is a third
from new rules,

662
00:39:34,038 --> 00:39:35,623
like rent controls,

663
00:39:35,707 --> 00:39:37,584
nationalisations and
financial regulations.

664
00:39:39,377 --> 00:39:43,464
But this collapse of capital is
not necessarily a bad thing

665
00:39:43,548 --> 00:39:46,551
because the power relationships
within society are transformed.

666
00:39:46,634 --> 00:39:49,846
(ELLA FITZGERALD'S
'DON'T FENCE ME IN')

667
00:39:51,389 --> 00:39:53,766
(PEOPLE CHEER)

668
00:39:53,850 --> 00:39:56,769
ELLA: Oh, give me land,
lots of land

669
00:39:56,853 --> 00:39:59,480
Under starry skies above

670
00:39:59,564 --> 00:40:02,734
Don't fence me in

671
00:40:02,817 --> 00:40:06,404
Let me ride through
the wide open country...

672
00:40:06,487 --> 00:40:09,407
MAN: Everyone is equal
in the face of death.

673
00:40:10,700 --> 00:40:15,288
Wars, with their
death and despair,

674
00:40:15,371 --> 00:40:20,335
are also moments when
humanity is found in us all.

675
00:40:20,418 --> 00:40:25,048
ELLA: Let me be my myself
in the evening breeze

676
00:40:25,131 --> 00:40:30,011
Listen to the murmur
of the cottonwood trees...

677
00:40:30,094 --> 00:40:34,349
CHANCEL: This new political
context will ultimately lead

678
00:40:34,432 --> 00:40:39,437
to a realisation of the spirit
of the Enlightenment

679
00:40:39,520 --> 00:40:42,065
and of equality proclaimed
in the 18th century.

680
00:40:42,148 --> 00:40:50,148
ELLA: Don't fence me in

681
00:40:54,953 --> 00:40:57,622
WILLIAMS: The social landscape
is completely different

682
00:40:57,705 --> 00:40:59,374
in the aftermath
of World War II.

683
00:40:59,457 --> 00:41:02,919
You see the biggest shift in
attitudes that you ever see.

684
00:41:03,002 --> 00:41:05,338
Bit different from
what it used to be,

685
00:41:05,421 --> 00:41:06,839
I can tell ya.

686
00:41:07,715 --> 00:41:09,300
(PENSIVE PIANO MUSIC)

687
00:41:09,384 --> 00:41:12,178
ARCHIVE: There will be sickness
and unemployment benefits,

688
00:41:12,261 --> 00:41:14,806
retirement pensions,
industrial injuries benefits,

689
00:41:14,889 --> 00:41:17,600
guardians allowances, widows'
benefits, maternity grants.

690
00:41:17,684 --> 00:41:20,144
WILLIAMS: It's a move towards
creating a benefit system.

691
00:41:20,228 --> 00:41:22,647
We have the idea
of sickness pay, holiday pay.

692
00:41:22,730 --> 00:41:24,857
In Britain they created
the National Health Service...

693
00:41:24,941 --> 00:41:27,568
Free service from
cradle to grave.

694
00:41:28,236 --> 00:41:30,238
(PENSIVE MUSIC)

695
00:41:35,451 --> 00:41:37,996
It's a move towards
nationalization of industry,

696
00:41:38,079 --> 00:41:40,081
it's a move towards
taxation of inheritance,

697
00:41:40,164 --> 00:41:42,041
taxation of property and wealth.

698
00:41:42,125 --> 00:41:44,836
I'm telling you,
it works out fine.

699
00:41:44,919 --> 00:41:47,039
ARCHIVE: Television, with its
promise of endless hours

700
00:41:47,088 --> 00:41:51,009
of enjoyment, entertainment,
was part of the peacetime green.

701
00:41:51,092 --> 00:41:54,595
Television... an unparalleled
blending of private incentive

702
00:41:54,679 --> 00:41:57,223
and public service.

703
00:41:57,306 --> 00:41:58,599
WILLIAMS: In America
in the '50s,

704
00:41:58,683 --> 00:42:00,351
you see capital restrained also.

705
00:42:00,435 --> 00:42:02,645
You have rent controls
on apartments,

706
00:42:02,729 --> 00:42:04,480
you have limits on landowners.

707
00:42:04,564 --> 00:42:07,275
Capital can't just roam free,
it can't just increase itself.

708
00:42:07,358 --> 00:42:10,528
Capital must be harnessed
like some wild horse.

709
00:42:10,611 --> 00:42:13,156
TV: This is the land
of the thoroughbred.

710
00:42:13,239 --> 00:42:16,075
WILLIAMS: There is a very clear
vision that capital needs to be

711
00:42:16,159 --> 00:42:18,745
helping the people, that
actually the whole principle

712
00:42:18,828 --> 00:42:21,289
in which the rich do whatever
they want with their capital

713
00:42:21,372 --> 00:42:22,874
and that's good for the nation,

714
00:42:22,957 --> 00:42:25,376
well, that's being challenged
across the world.

715
00:42:25,460 --> 00:42:28,004
WOMAN: I wish I had
a castle in the sky

716
00:42:29,714 --> 00:42:33,551
A way up high where
bluebirds like to fly

717
00:42:33,634 --> 00:42:35,762
WILLIAMS: The new vision
is that the '50s

718
00:42:35,845 --> 00:42:38,639
is going to be the age in which
everyone can have wealth.

719
00:42:38,723 --> 00:42:40,683
WOMAN: with a hundred
rooms or more...

720
00:42:40,767 --> 00:42:42,268
some day...

721
00:42:42,351 --> 00:42:45,354
With stars for windows,
clouds for rugs

722
00:42:45,438 --> 00:42:47,648
A rainbow for a door

723
00:42:47,732 --> 00:42:50,651
WILLIAMS: People who are born
just after World War I

724
00:42:50,735 --> 00:42:54,238
had a life that no child
before them could ever imagine.

725
00:42:54,322 --> 00:42:56,824
WOMAN: I just wish
I had a decent kitchen.

726
00:42:56,908 --> 00:42:59,243
(BELLS RING, PEOPLE EXCLAIM)

727
00:43:00,870 --> 00:43:02,246
WILLIAMS: For the first time,

728
00:43:02,330 --> 00:43:05,208
hard work and study
can get you to the top.

729
00:43:05,291 --> 00:43:07,251
(CHEERING, APPLAUSE)

730
00:43:08,878 --> 00:43:10,755
- Hello, Mrs. Thatcher.
- Nice to see you.

731
00:43:10,838 --> 00:43:13,758
- Have a seat.
- (CHEERING, APPLAUSE)

732
00:43:15,676 --> 00:43:18,846
THATCHER: My father left school
at 12 or 13,

733
00:43:18,930 --> 00:43:20,640
and didn't have some
of the chances

734
00:43:20,723 --> 00:43:23,392
that you and I have
to go on to college.

735
00:43:23,476 --> 00:43:25,812
And I think you'll find
when you're a parent,

736
00:43:25,895 --> 00:43:29,273
what you're always trying to do
is to give your children

737
00:43:29,357 --> 00:43:31,734
the sort of chances
you didn't have.

738
00:43:31,818 --> 00:43:34,529
BOY: Would you like to see
a woman prime minister?

739
00:43:34,612 --> 00:43:37,115
I think it depends upon
who the person is.

740
00:43:37,198 --> 00:43:40,118
I don't think that there will
be a woman prime minister

741
00:43:40,201 --> 00:43:41,828
in my lifetime.

742
00:43:43,454 --> 00:43:45,414
WILLIAMS: What you see in
Margaret Thatcher's life

743
00:43:45,456 --> 00:43:47,750
is incredible social mobility.

744
00:43:47,834 --> 00:43:49,877
An ordinary shopkeeper's
daughter from the North,

745
00:43:49,961 --> 00:43:52,505
she went to grammar school,
she went to Oxford,

746
00:43:52,588 --> 00:43:54,549
and became the first
female prime minister,

747
00:43:54,632 --> 00:43:55,842
and, of course, wealthy.

748
00:43:55,925 --> 00:43:58,553
And that is simply
through this new society

749
00:43:58,636 --> 00:44:02,473
in which social mobility
was actually possible.

750
00:44:02,557 --> 00:44:05,685
And what you have is this real
surge of the middle classes

751
00:44:05,768 --> 00:44:08,312
and the lower middle classes
into positions of power.

752
00:44:08,396 --> 00:44:10,356
(PENSIVE MUSIC)

753
00:44:15,987 --> 00:44:18,489
PIKETTY: If you look at the
development of inequality

754
00:44:18,573 --> 00:44:22,326
through the 20th century,
the most striking transformation

755
00:44:22,410 --> 00:44:27,415
is the growth of an
extremely strong middle class.

756
00:44:28,916 --> 00:44:33,212
Until 1914,
the middle class doesn't exist.

757
00:44:33,296 --> 00:44:36,507
Or more accurately, they're
almost as poor as the poorest.

758
00:44:40,553 --> 00:44:42,680
The decades after the war...

759
00:44:42,763 --> 00:44:45,349
30 years that saw glorious
economic growth...

760
00:44:45,433 --> 00:44:50,104
Are marked by a steep increase
in purchasing power,

761
00:44:50,188 --> 00:44:53,566
especially for lower
and middle-class workers

762
00:44:53,649 --> 00:44:58,571
who can buy consumer goods,
improve their standard of living

763
00:44:58,654 --> 00:45:02,909
and save money to buy
a house and acquire capital.

764
00:45:02,992 --> 00:45:04,595
WOMAN: And we'll have
the kitchen right here,

765
00:45:04,619 --> 00:45:06,913
so we can see the children
playing in the yard.

766
00:45:06,996 --> 00:45:09,040
Children?! How many
you planning on?

767
00:45:09,123 --> 00:45:11,083
Not more than six, I hope.

768
00:45:12,543 --> 00:45:15,421
(CHILDREN CHATTER)

769
00:45:15,504 --> 00:45:17,506
PIKETTY: They're a group
who are neither

770
00:45:17,590 --> 00:45:20,218
very rich nor completely poor,

771
00:45:20,301 --> 00:45:23,137
but still have a substantial
share of national capital.

772
00:45:24,972 --> 00:45:27,058
(UNSETTLING PIANO MUSIC)

773
00:45:27,141 --> 00:45:29,977
(BIRDSONG)

774
00:45:36,234 --> 00:45:37,735
But in recent decades,

775
00:45:37,818 --> 00:45:41,322
the share of wealth
owned by the middle class

776
00:45:41,405 --> 00:45:44,825
has started to decline
sharply in the US

777
00:45:44,909 --> 00:45:46,535
and a little less
sharply in Europe.

778
00:45:50,748 --> 00:45:53,793
Clearly we've taken
a very different direction,

779
00:45:53,876 --> 00:45:57,755
which can be quite disturbing if
we look into the 21st century.

780
00:46:00,132 --> 00:46:02,843
One of the greatest
challenges for the future

781
00:46:02,927 --> 00:46:05,930
is whether the middle class
will continue to shrink,

782
00:46:06,013 --> 00:46:08,641
with the risk of returning
to an impoverished middle class

783
00:46:08,724 --> 00:46:11,310
like we had a century ago.

784
00:46:13,062 --> 00:46:15,523
(UNSETTLING MUSIC CONTINUES)

785
00:46:19,193 --> 00:46:21,487
(BIRDSONG, CHILDREN SHOUT)

786
00:46:24,740 --> 00:46:27,201
FUKUYAMA: The decades
immediately after World War II

787
00:46:27,285 --> 00:46:29,245
were quite remarkable.

788
00:46:30,579 --> 00:46:33,207
There was a high degree
of social consensus

789
00:46:33,291 --> 00:46:36,961
that really sprang out
of the whole war effort.

790
00:46:38,629 --> 00:46:41,716
And so, you had a solidarity,

791
00:46:41,799 --> 00:46:45,720
but it was on the basis of
a pretty stratified society.

792
00:46:47,305 --> 00:46:49,307
There were other forms
of inequality that existed

793
00:46:49,390 --> 00:46:51,058
in that period.

794
00:46:51,142 --> 00:46:53,477
But that began to change
after the civil rights movement

795
00:46:53,561 --> 00:46:57,023
in the 1960s and then all
of the other social movements

796
00:46:57,106 --> 00:46:58,941
that occurred thereafter.

797
00:46:59,025 --> 00:47:00,985
- You better think
- Think!

798
00:47:01,068 --> 00:47:03,005
ARETHA: Think about what
you're trying to do to me

799
00:47:03,029 --> 00:47:06,240
KING JR.:
The negro still is not free.

800
00:47:06,324 --> 00:47:07,825
ARETHA:
let yourself be free

801
00:47:07,908 --> 00:47:10,161
- Oh, freedom
- Freedom!

802
00:47:10,244 --> 00:47:12,204
- Some freedom
- Freedom!

803
00:47:12,288 --> 00:47:14,123
Oh, freedom

804
00:47:14,206 --> 00:47:16,709
Yeah, freedom!

805
00:47:16,792 --> 00:47:18,753
FUKUYAMA: I think that,
politically,

806
00:47:18,836 --> 00:47:22,048
having a broad middle class
is quite important.

807
00:47:22,131 --> 00:47:24,383
It's part of what's
called modernization theory,

808
00:47:24,467 --> 00:47:26,344
this idea that
as your income rises,

809
00:47:26,427 --> 00:47:29,555
you develop a middle class
that are better educated,

810
00:47:29,638 --> 00:47:33,809
and therefore they will demand
a higher level of participation.

811
00:47:33,893 --> 00:47:36,520
- Oh, freedom
- Freedom!

812
00:47:36,604 --> 00:47:38,356
- Some freedom
- Freedom!

813
00:47:38,439 --> 00:47:41,650
Oh, freedom!
Yeah, freedom!

814
00:47:41,734 --> 00:47:44,195
WOMEN CHANT: We have
been victims for so long.

815
00:47:44,278 --> 00:47:46,322
- Freedom
- Oh, freedom

816
00:47:46,405 --> 00:47:49,241
- Freedom
- Give me some freedom

817
00:47:49,325 --> 00:47:52,328
Oh, freedom!

818
00:47:52,411 --> 00:47:55,539
- Whoo! To the ball, baby
- To the ball

819
00:47:57,166 --> 00:48:00,336
NAIDU: Then that kind of all
unravels in the '70s.

820
00:48:00,419 --> 00:48:04,173
ANCHOR: This is NBC Nightly
News, Wednesday October 17th.

821
00:48:04,256 --> 00:48:06,926
Good evening. The Middle East
war produced developments

822
00:48:07,009 --> 00:48:08,844
all over the world today.

823
00:48:08,928 --> 00:48:11,389
The oil-producing countries
of the Arab world

824
00:48:11,472 --> 00:48:14,308
decided to use their oil
as a political weapon.

825
00:48:14,392 --> 00:48:16,152
REPORTER: There was an
announcement in Kuwait

826
00:48:16,185 --> 00:48:18,396
that prices for Arab oil
were going up...

827
00:48:18,479 --> 00:48:21,482
A huge increase voted
in an overnight meeting

828
00:48:21,565 --> 00:48:25,111
until Israeli forces leave
occupied Arab land.

829
00:48:25,194 --> 00:48:27,154
(TENSE MUSIC)

830
00:48:29,990 --> 00:48:33,494
NAIDU: This oil shock hits
all of the advanced economies,

831
00:48:33,577 --> 00:48:36,163
and oil was an input
into everything.

832
00:48:37,832 --> 00:48:40,042
REPORTER: It was announced
today that gasless Sundays

833
00:48:40,126 --> 00:48:43,045
will go into effect
as of next month.

834
00:48:43,129 --> 00:48:44,713
REPORTER: The price
of foreign oil

835
00:48:44,797 --> 00:48:47,299
had jumped from $3
to $12 a barrel.

836
00:48:49,051 --> 00:48:52,805
NAIDU: Quadrupling the price of
oil translated into this period

837
00:48:52,888 --> 00:48:55,433
where, like, prices
started to increase

838
00:48:55,516 --> 00:48:58,602
and wages weren't keeping pace,

839
00:48:58,686 --> 00:49:01,021
but then unions and workers
started demanding

840
00:49:01,105 --> 00:49:04,316
even higher wages to
keep pace with prices,

841
00:49:04,400 --> 00:49:06,735
and then what firms would do
is then increase prices

842
00:49:06,819 --> 00:49:10,072
even further to pass on
the effects of wages,

843
00:49:10,156 --> 00:49:13,826
and so you got what's
called a wage-price spiral.

844
00:49:13,909 --> 00:49:18,205
And so you had this period of
high inflation and low growth,

845
00:49:18,289 --> 00:49:21,500
so that's why it got
called stagflation.

846
00:49:22,793 --> 00:49:25,254
(OCEAN LAPS)

847
00:49:25,337 --> 00:49:27,298
(PLANE ENGINE WHINES)

848
00:49:29,925 --> 00:49:32,052
FOROOHAR: Globalization
is starting to happen.

849
00:49:32,136 --> 00:49:35,389
The emerging markets are
coming online in the world.

850
00:49:35,473 --> 00:49:36,932
Europe is back on its feet,

851
00:49:37,016 --> 00:49:38,934
Germany is becoming
a producer again,

852
00:49:39,018 --> 00:49:41,604
a number of European nations
are becoming more competitive.

853
00:49:41,687 --> 00:49:43,647
(DOLLY PARTON'S '9 TO 5')

854
00:49:45,858 --> 00:49:47,526
FOROOHAR: The global
picture is changing.

855
00:49:47,610 --> 00:49:49,695
American capital
suddenly doesn't have

856
00:49:49,778 --> 00:49:51,447
the world to itself anymore.

857
00:49:51,530 --> 00:49:53,741
DOLLY: Tumble outta bed and I
stumble to the kitchen

858
00:49:53,824 --> 00:49:55,951
Pour myself a cup of ambition...

859
00:49:56,035 --> 00:49:58,329
FOROOHAR: But another thing
that's happening in the 1970s

860
00:49:58,412 --> 00:50:01,957
is you see a very kind
of siloed, financialized

861
00:50:02,041 --> 00:50:05,085
way of thinking about how to run
a corporate balance sheet...

862
00:50:05,169 --> 00:50:07,379
Cut costs, marshal your capital,

863
00:50:07,463 --> 00:50:09,924
treat labor as a cost,
not an asset.

864
00:50:10,007 --> 00:50:12,176
DOLLY: Working 9 to 5

865
00:50:12,259 --> 00:50:14,678
What a way to make a living

866
00:50:14,762 --> 00:50:16,805
Barely gettin' by

867
00:50:16,889 --> 00:50:19,183
It's all takin' and no givin'

868
00:50:19,266 --> 00:50:21,185
They just use your mind

869
00:50:21,268 --> 00:50:23,562
And you never get the credit

870
00:50:23,646 --> 00:50:27,650
It's enough to drive you
crazy if you let it

871
00:50:27,733 --> 00:50:29,794
FOROOHAR: Companies are not
investing in their workers,

872
00:50:29,818 --> 00:50:31,195
they're not raising wages,

873
00:50:31,278 --> 00:50:33,489
so you start to really
get that big 'X'

874
00:50:33,572 --> 00:50:37,409
where Wall Street's going here,
Main Street's going down here.

875
00:50:37,493 --> 00:50:39,787
DOLLY:
It's a rich man's game

876
00:50:39,870 --> 00:50:41,789
No matter what they call it

877
00:50:41,872 --> 00:50:46,835
And you spend your life
puttin" money in his wallet

878
00:50:46,919 --> 00:50:48,254
9 to 5...

879
00:50:48,337 --> 00:50:49,755
(MACHINERY WHIRRS)

880
00:50:51,465 --> 00:50:53,884
FOROOHAR: Germany and Japan
took a different model...

881
00:50:53,968 --> 00:50:56,387
A model in which workers sat
on the boards of companies,

882
00:50:56,470 --> 00:50:58,639
had more of a say.

883
00:50:58,722 --> 00:51:00,933
This actually gave them
a big advantage.

884
00:51:01,016 --> 00:51:02,601
They were able to use
that expertise

885
00:51:02,685 --> 00:51:04,061
and increase their efficiency,

886
00:51:04,144 --> 00:51:06,814
and eventually gain market share
from US companies.

887
00:51:06,897 --> 00:51:08,482
(SINISTER MUSIC)

888
00:51:08,566 --> 00:51:12,069
ARCHIVE: When it started,
America was unprepared.

889
00:51:12,152 --> 00:51:14,113
From across the ocean,
they came...

890
00:51:14,196 --> 00:51:18,659
Little cars determined to change
the buying habits of a nation.

891
00:51:18,742 --> 00:51:21,495
MAN: It's a great-looking car.
What do you call it?

892
00:51:21,579 --> 00:51:23,789
- Isuzu.
- Gesundheit.

893
00:51:23,872 --> 00:51:25,791
ARCHIVE: Road-hugging,
heart-pounding,

894
00:51:25,874 --> 00:51:27,918
hood-soaring, deck-sloping...

895
00:51:28,002 --> 00:51:30,296
We are...

896
00:51:30,379 --> 00:51:33,173
Cadillacs drive Subaru

897
00:51:33,257 --> 00:51:35,384
MAN: Reagan for president.

898
00:51:36,802 --> 00:51:39,221
Japanese production
of automobiles is almost

899
00:51:39,305 --> 00:51:43,183
twice as great per worker
as it is in America.

900
00:51:43,267 --> 00:51:45,603
We were once the greatest
producer of automobiles,

901
00:51:45,686 --> 00:51:49,356
producing more than all the
rest of the world combined.

902
00:51:49,440 --> 00:51:51,483
That is no longer true.

903
00:51:51,567 --> 00:51:54,903
Every country feels the
need to tell a story about

904
00:51:54,987 --> 00:51:59,992
why it's richer than another
or why it has become poorer.

905
00:52:00,075 --> 00:52:04,622
And it's this story that
Reagan and Thatcher tell

906
00:52:04,705 --> 00:52:07,416
the American and British public.

907
00:52:07,499 --> 00:52:10,002
- (PEOPLE CHANT)
- Thank you very much.

908
00:52:10,085 --> 00:52:12,087
(HORN SOUNDS)

909
00:52:12,171 --> 00:52:15,382
Can anyone look at our reduced
standing in the world today

910
00:52:15,466 --> 00:52:18,802
and say, "Let's have four
more years of this"?

911
00:52:18,886 --> 00:52:21,639
CROWD: No!

912
00:52:21,722 --> 00:52:23,974
REAGAN: For those
who've abandoned hope,

913
00:52:24,058 --> 00:52:26,018
we'll restore hope
and we'll welcome them

914
00:52:26,101 --> 00:52:30,064
into a great national crusade
to make America great again.

915
00:52:30,147 --> 00:52:33,025
(CHEERING, APPLAUSE)

916
00:52:33,108 --> 00:52:35,527
PIKETTY: In the United States
there was a feeling

917
00:52:35,611 --> 00:52:37,946
that Germany was catching up,

918
00:52:38,030 --> 00:52:39,948
that Japan was catching up...

919
00:52:40,032 --> 00:52:42,660
These countries
that lost the war.

920
00:52:42,743 --> 00:52:46,789
And Reagan, and also
Thatcher to a certain extent,

921
00:52:46,872 --> 00:52:50,000
use this ideological
argument to say,

922
00:52:50,084 --> 00:52:52,419
"Look, these countries
are catching up.

923
00:52:52,503 --> 00:52:56,298
"Something needs to change.
What could we change?

924
00:52:56,382 --> 00:53:00,094
"Ah, it's because
of the welfare state

925
00:53:00,177 --> 00:53:03,389
"that was put in place
following the New Deal.

926
00:53:03,472 --> 00:53:05,349
"That's what's made us soft.

927
00:53:05,432 --> 00:53:08,060
"And so we must return to
the mythical capitalism

928
00:53:08,143 --> 00:53:11,522
"of the 19th century. That's how
we're going to re-energise.”

929
00:53:12,272 --> 00:53:14,233
(CROWDS JEER)

930
00:53:14,316 --> 00:53:16,610
BRITISH REPORTER: Here comes
the Prime Ministerial Rover,

931
00:53:16,694 --> 00:53:18,737
bearing now Mrs. Thatcher.

932
00:53:18,821 --> 00:53:20,501
AMERICAN REPORTER:
Enter Margaret Thatcher,

933
00:53:20,572 --> 00:53:23,617
a grocer's daughter educated
among the privileged classes

934
00:53:23,701 --> 00:53:24,952
at Oxford University.

935
00:53:25,035 --> 00:53:27,496
(OFFICERS SPEAK INDISTINCTLY)

936
00:53:27,579 --> 00:53:30,666
There is now work to be done.

937
00:53:30,749 --> 00:53:33,043
In deciding that, actually,
what we need to do

938
00:53:33,127 --> 00:53:37,548
is increase the value of assets
in order to increase investment,

939
00:53:37,631 --> 00:53:40,092
some of the thinking
behind what would happen

940
00:53:40,175 --> 00:53:43,429
when you let capital free,

941
00:53:43,512 --> 00:53:46,515
you had to suppress
the power of labor.

942
00:53:47,808 --> 00:53:50,436
(PENSIVE MUSIC)

943
00:53:50,519 --> 00:53:53,731
REPORTER: This 12-foot-high pile
is part of two weeks' rubbish

944
00:53:53,814 --> 00:53:55,983
piled outside the
local refuse depot.

945
00:53:56,066 --> 00:53:57,359
Like others in Central London,

946
00:53:57,443 --> 00:53:59,111
it's been closed
now for two weeks

947
00:53:59,194 --> 00:54:00,946
because of the dustmen's
indefinite strike.

948
00:54:01,029 --> 00:54:03,007
REPORTER: The teachers' union
are today putting forward

949
00:54:03,031 --> 00:54:06,368
a pay claim. 33,000 school
children are out of school

950
00:54:06,452 --> 00:54:08,704
in the worst-affected London
borough of Haringey.

951
00:54:08,787 --> 00:54:09,997
REPORTER: Cancelled operations

952
00:54:10,080 --> 00:54:12,082
meant empty beds
up on the wards,

953
00:54:12,166 --> 00:54:14,460
which would otherwise
have been used.

954
00:54:14,543 --> 00:54:16,343
SHAHEEN: You have to remember,
at those times,

955
00:54:16,378 --> 00:54:20,507
there were issues about strikes;
the public were upset about

956
00:54:20,591 --> 00:54:24,511
the way some labor unions
were acting in that time.

957
00:54:24,595 --> 00:54:27,055
I'm going to boil everything
because the sewage men,

958
00:54:27,139 --> 00:54:29,600
I understand,
are still on strike,

959
00:54:29,683 --> 00:54:33,562
and so it'll be polluted,
so you can get typhoid,

960
00:54:33,645 --> 00:54:35,439
can't you?

961
00:54:35,522 --> 00:54:37,524
SHAHEEN: There was a mandate
to do something about

962
00:54:37,608 --> 00:54:39,777
the power of labor
against capital.

963
00:54:39,860 --> 00:54:42,654
And it certainly is a tricky job
trying to get that right.

964
00:54:42,738 --> 00:54:44,573
THATCHER: This government
has rolled back

965
00:54:44,656 --> 00:54:46,366
the frontiers of the state

966
00:54:46,450 --> 00:54:49,661
and will roll them back
still further.

967
00:54:49,745 --> 00:54:52,414
Millions have already
become shareholders

968
00:54:52,498 --> 00:54:56,668
in British Gas, British Airways,
British airports.

969
00:55:01,131 --> 00:55:04,676
(INDISTINCT RADIO CHATTER,
ENGINES WHINE)

970
00:55:07,429 --> 00:55:08,764
WOMAN:
Attention, all passengers.

971
00:55:08,847 --> 00:55:12,434
Flight 307 is cancelled
until further notice.

972
00:55:12,518 --> 00:55:14,645
NAIDU: This incredible
hostility to unions

973
00:55:14,728 --> 00:55:17,689
starts in the '80s
and is really crystallized

974
00:55:17,773 --> 00:55:22,611
when Reagan fires all
these air traffic controllers.

975
00:55:22,694 --> 00:55:25,072
REAGAN: I must tell those
who fail to report for duty

976
00:55:25,155 --> 00:55:29,785
this morning, if they do not
report for work within 48 hours,

977
00:55:29,868 --> 00:55:34,581
they have forfeited their jobs
and will be terminated.

978
00:55:34,665 --> 00:55:36,291
End of statement.

979
00:55:36,375 --> 00:55:38,877
NAIDU: That's kind of
seen as like a greenlight

980
00:55:38,961 --> 00:55:40,712
to a whole industry.

981
00:55:40,796 --> 00:55:42,548
(MICROPHONE FEEDBACK)

982
00:55:42,631 --> 00:55:45,467
Good evening. This afternoon,
President Reagan started firing

983
00:55:45,551 --> 00:55:48,345
the strikers, and the government
claimed it was ready to rebuild

984
00:55:48,428 --> 00:55:50,180
the whole system without them.

985
00:55:50,264 --> 00:55:52,224
(MEN SHOUT)

986
00:55:54,893 --> 00:55:56,645
By this evening,
federal judges had sent

987
00:55:56,728 --> 00:55:59,231
five local union leaders
to jail.

988
00:55:59,314 --> 00:56:01,275
(PENSIVE MUSIC)

989
00:56:06,530 --> 00:56:09,157
SHAHEEN: What we've seen over
time... and this is fundamental

990
00:56:09,241 --> 00:56:12,369
to understanding why
inequality has worsened...

991
00:56:12,452 --> 00:56:16,415
Is that the share of all the
money that's made in the economy

992
00:56:16,498 --> 00:56:19,251
is going less and less to the
workers, so that is declining...

993
00:56:19,334 --> 00:56:21,587
The wage share...

994
00:56:21,670 --> 00:56:25,132
And the profit share,
essentially what those that own

995
00:56:25,215 --> 00:56:27,843
the capital will get,
is growing.

996
00:56:30,137 --> 00:56:34,099
And that is essentially
about power.

997
00:56:34,182 --> 00:56:36,184
(MICROPHONE FEEDBACK)

998
00:56:36,268 --> 00:56:39,062
Well, I, uh... I appreciate the
opportunity you're giving me,

999
00:56:39,146 --> 00:56:42,524
Mr. Cromwell, as the single
largest shareholder

1000
00:56:42,608 --> 00:56:44,651
in Teldar Paper, to speak.

1001
00:56:47,154 --> 00:56:49,990
America has become
a second-rate power.

1002
00:56:51,325 --> 00:56:52,910
Now, in the days
of the free market,

1003
00:56:52,993 --> 00:56:56,121
when our country was
a top industrial power,

1004
00:56:56,204 --> 00:56:59,958
there was accountability
to the stockholder.

1005
00:57:00,042 --> 00:57:01,543
The Carnegies, the Mellons,

1006
00:57:01,627 --> 00:57:04,296
the men that built this
great industrial empire,

1007
00:57:04,379 --> 00:57:08,091
made sure of it because it
was their money at stake.

1008
00:57:09,426 --> 00:57:11,511
The point is,
ladies and gentlemen,

1009
00:57:11,595 --> 00:57:15,682
that greed... for lack
of a better word...

1010
00:57:15,766 --> 00:57:17,559
Is good.

1011
00:57:17,643 --> 00:57:19,436
Greed is right.

1012
00:57:19,519 --> 00:57:21,563
Greed works.

1013
00:57:21,647 --> 00:57:23,315
And greed...

1014
00:57:24,149 --> 00:57:26,193
You mark my words...

1015
00:57:26,276 --> 00:57:28,612
Will not only save Teldar Paper,

1016
00:57:28,695 --> 00:57:32,741
but that other malfunctioning
corporation called the USA.

1017
00:57:32,824 --> 00:57:35,369
- Thank you very much.
- (APPLAUSE)

1018
00:57:35,452 --> 00:57:37,704
TETT: When Gordon Gekko
was seen on film saying,

1019
00:57:37,788 --> 00:57:42,334
"Greed is good,” that was
intended to be a howl of protest

1020
00:57:42,417 --> 00:57:44,044
against the system.

1021
00:57:44,127 --> 00:57:47,047
But such had the
cultural fabric changed,

1022
00:57:47,130 --> 00:57:49,591
that actually for some people
coming through universities

1023
00:57:49,675 --> 00:57:51,718
applying to join
investment banks,

1024
00:57:51,802 --> 00:57:54,554
that phrase "Greed is good" ”
actually became a license

1025
00:57:54,638 --> 00:57:56,473
to pursue riches.

1026
00:57:56,556 --> 00:57:59,476
(KIM WILDE'S 'KIDS IN AMERICA")

1027
00:58:05,482 --> 00:58:08,360
TETT: The era of
the yuppie came to rule.

1028
00:58:08,443 --> 00:58:11,321
WILDE: Friday night
and everyone's moving

1029
00:58:11,405 --> 00:58:15,909
I can feel the heat, but it's
soothing, heading down

1030
00:58:15,993 --> 00:58:18,412
TETT: It began to become very
cool to be an entrepreneur,

1031
00:58:18,495 --> 00:58:20,205
to be riding that boom,

1032
00:58:20,288 --> 00:58:24,418
and the idea of arguing for
high taxes and redistribution

1033
00:58:24,501 --> 00:58:26,628
began to seem
very out of fashion.

1034
00:58:26,712 --> 00:58:29,464
- We're the kids in America
- Whoa

1035
00:58:29,548 --> 00:58:32,384
- We're the kids in America
- Whoa

1036
00:58:32,467 --> 00:58:35,762
Everybody live for
the music-go-round

1037
00:58:38,223 --> 00:58:41,018
TETT: The new mantra of
deregulation took hold,

1038
00:58:41,101 --> 00:58:45,063
and so financial services
were deregulated dramatically,

1039
00:58:45,147 --> 00:58:46,982
bankers began to
get paid a lot more,

1040
00:58:47,065 --> 00:58:48,650
and then market forces
were unleashed,

1041
00:58:48,734 --> 00:58:51,945
which made capitalists
a lot richer.

1042
00:58:53,405 --> 00:58:55,407
WILDE: Hot-shot...

1043
00:58:56,408 --> 00:58:58,410
(MUSIC FADES)

1044
00:59:00,203 --> 00:59:02,205
(WHOOSHING)

1045
00:59:03,874 --> 00:59:07,335
STIGLITZ: The big reforms
of the Reagan-Thatcher era

1046
00:59:07,419 --> 00:59:11,715
were lower the tax
rates on the rich

1047
00:59:11,798 --> 00:59:15,594
on the assumption it would
trickle down. Didn't happen.

1048
00:59:15,677 --> 00:59:16,887
(CAR HORN BLARES)

1049
00:59:16,970 --> 00:59:19,222
When they adopted
these kinds of policies,

1050
00:59:19,306 --> 00:59:23,185
it was very clear that they
would increase inequality.

1051
00:59:23,268 --> 00:59:26,730
The promise was that
the pie would be bigger,

1052
00:59:26,813 --> 00:59:30,734
you would be getting
a smaller percentage

1053
00:59:30,817 --> 00:59:34,613
of a bigger pie, and your
slice would get bigger.

1054
00:59:36,031 --> 00:59:38,033
So in some sense,

1055
00:59:39,451 --> 00:59:41,661
there was no surprise

1056
00:59:41,745 --> 00:59:43,830
that there was
a growth in inequality.

1057
00:59:43,914 --> 00:59:46,833
But the magnitude of
the increase in inequality

1058
00:59:46,917 --> 00:59:48,585
was much larger.

1059
00:59:48,668 --> 00:59:52,047
When we look at the numbers,
we can see it very vividly.

1060
00:59:52,130 --> 00:59:56,676
The bottom 90% have experienced
near-stagnation.

1061
00:59:56,760 --> 01:00:00,972
Most of the growth
has gone to the top 10%.

1062
01:00:01,056 --> 01:00:05,143
Median income for a typical
American household is roughly

1063
01:00:05,227 --> 01:00:07,813
at the level it was
a quarter century ago.

1064
01:00:07,896 --> 01:00:11,316
Real wages, adjusted for
inflation, at the bottom

1065
01:00:11,399 --> 01:00:14,402
are at the level they were
60 years ago.

1066
01:00:18,281 --> 01:00:21,785
In fact, life expectancy
has been declining.

1067
01:00:23,453 --> 01:00:26,957
These are dramatic statistics
that shows the economy

1068
01:00:27,040 --> 01:00:30,335
has not been working
for most Americans.

1069
01:00:30,418 --> 01:00:32,379
(EDGY, TENSE MUSIC)

1070
01:00:38,718 --> 01:00:40,137
FOROOHAR: By the 1990s,

1071
01:00:40,220 --> 01:00:42,222
American banks
really became the exporters

1072
01:00:42,305 --> 01:00:44,683
of American capitalism,
and they went everywhere...

1073
01:00:44,766 --> 01:00:47,310
They went to Europe,
they went to Asia.

1074
01:00:48,979 --> 01:00:52,941
And everyone was sold our
version of a trickle-down,

1075
01:00:53,024 --> 01:00:56,236
laissez-faire
deregulate capitalism.

1076
01:00:57,946 --> 01:00:59,948
(JARRING TECHNO MUSIC)

1077
01:01:02,784 --> 01:01:06,746
MAN: Life seemed to get
better in the 1990s,

1078
01:01:06,830 --> 01:01:09,499
because the globalization
of the system

1079
01:01:09,583 --> 01:01:13,545
made things for ordinary
people for a while cheaper,

1080
01:01:13,628 --> 01:01:15,922
but then on top of that,
you get credit.

1081
01:01:16,006 --> 01:01:17,966
(EDGY, TECHNO MUSIC)

1082
01:01:19,301 --> 01:01:21,344
When the credit boom took off,

1083
01:01:21,428 --> 01:01:23,889
suddenly ordinary people
could get credit.

1084
01:01:23,972 --> 01:01:25,599
MAN: Master the moment.

1085
01:01:25,682 --> 01:01:29,311
MASON: Suddenly, extraordinarily
poor people could get credit.

1086
01:01:29,394 --> 01:01:31,396
- You can apply...
- right over the phone.

1087
01:01:31,479 --> 01:01:34,316
People with terrible credit
histories could get credit.

1088
01:01:34,399 --> 01:01:36,234
MAN: There is
absolutely no risk.

1089
01:01:36,318 --> 01:01:39,529
People who in no way
should be given a mortgage

1090
01:01:39,613 --> 01:01:42,449
could get a mortgage.

1091
01:01:42,532 --> 01:01:45,410
And the investment banks
created ever more exotic

1092
01:01:45,493 --> 01:01:50,165
credit derivatives... ways of
parceling up your bad debt

1093
01:01:50,248 --> 01:01:52,751
and disguising its badness.

1094
01:01:52,834 --> 01:01:56,922
That's what kept the system
going for as long as it did.

1095
01:01:57,005 --> 01:01:58,965
And 2008 was where that blew up.

1096
01:02:00,592 --> 01:02:03,303
REPORTER: Wall Street
in panic mode this morning.

1097
01:02:03,386 --> 01:02:05,555
- How did this happen?
- 22% of homeowners

1098
01:02:05,639 --> 01:02:07,057
are underwater
on their mortgage...

1099
01:02:07,140 --> 01:02:08,492
REPORTER: Millions of
American homeowners...

1100
01:02:08,516 --> 01:02:10,143
- Homeowners defaulting...
- Greed.

1101
01:02:10,227 --> 01:02:12,729
The essence of the American
Dream could be threatened.

1102
01:02:12,812 --> 01:02:15,398
- Sub-prime lending...
- Higher interest rates...

1103
01:02:15,482 --> 01:02:18,151
Let's see here, uh,
balloon payment,

1104
01:02:18,235 --> 01:02:20,987
GIL: 37% interest compounded
every minute,

1105
01:02:21,071 --> 01:02:23,240
not understanding
the contract fee,

1106
01:02:23,323 --> 01:02:25,492
da, da, ba, da, ba, ba-da, bow.

1107
01:02:25,575 --> 01:02:27,202
And here's your
new monthly payment.

1108
01:02:27,285 --> 01:02:28,620
(BOTH GASP)

1109
01:02:28,703 --> 01:02:30,622
HOMER: Listen, you, when
you gave me that money,

1110
01:02:30,705 --> 01:02:33,375
you said I wouldn't have
to repay it till the future.

1111
01:02:33,458 --> 01:02:36,378
This isn't the future!
It's the lousy, stinkin' now!

1112
01:02:36,461 --> 01:02:38,004
GIL: Now, calm down.

1113
01:02:38,088 --> 01:02:41,508
This country takes care
of its middle class.

1114
01:02:41,591 --> 01:02:43,551
(SOMBER MUSIC)

1115
01:02:45,178 --> 01:02:46,846
Ah, don't be sore at the banks.

1116
01:02:46,930 --> 01:02:50,558
Hell, we fired our CEO and he
barely got out with $50 million.

1117
01:02:50,642 --> 01:02:52,269
(BELL RINGS)

1118
01:02:52,352 --> 01:02:54,455
REPORTER: Banks are afraid
to lend money to each other.

1119
01:02:54,479 --> 01:02:56,356
We're seeing a freezing
of the credit market.

1120
01:02:56,439 --> 01:02:57,667
- credit markets.
- credit markets.

1121
01:02:57,691 --> 01:02:59,401
REPORTER: The fear is rising.

1122
01:02:59,484 --> 01:03:02,654
MAN: The fear was, and I think
it was a well-founded fear,

1123
01:03:02,737 --> 01:03:05,949
that the availability of
credit would disappear,

1124
01:03:06,032 --> 01:03:08,159
and perhaps our ability
to even transact,

1125
01:03:08,243 --> 01:03:10,370
to even be able to access
cash to make payments,

1126
01:03:10,453 --> 01:03:12,247
use a credit card,
use a debit card.

1127
01:03:12,330 --> 01:03:14,833
Perhaps that would
break down also.

1128
01:03:14,916 --> 01:03:17,377
REPORTER: Worst week
since the crash of 1929.

1129
01:03:17,460 --> 01:03:19,220
- global sell-off.
- the Dow tumbled...

1130
01:03:19,254 --> 01:03:21,631
- hoarding cash.
- Japan down nearly 10%.

1131
01:03:21,715 --> 01:03:25,093
REPORTER: The British government
blamed American bankers.

1132
01:03:25,176 --> 01:03:27,136
JOHNSON: When it starts
to unravel, then you start

1133
01:03:27,178 --> 01:03:29,889
to worry... how broadly will
this spread around the world

1134
01:03:29,973 --> 01:03:33,059
and are we on the verge of
another Great Depression?

1135
01:03:33,143 --> 01:03:35,562
American taxpayers
woke up this morning

1136
01:03:35,645 --> 01:03:38,356
to learn their money
makes up most of a...

1137
01:03:38,440 --> 01:03:40,775
Big package, because
it was a big problem.

1138
01:03:40,859 --> 01:03:42,485
Too big to fail.

1139
01:03:42,569 --> 01:03:46,531
REPORTER: The Fed loaned
the banks some $7.♪ trillion.

1140
01:03:46,614 --> 01:03:49,284
Global markets soared at the
news of the US rescue plan.

1141
01:03:49,367 --> 01:03:52,454
With the bail-out news,
the stock rebounded nearly 60%.

1142
01:03:52,537 --> 01:03:54,831
Hong Kong more than 8%.
London's FTSE...

1143
01:03:54,914 --> 01:03:56,350
REPORTER: Stokes rose
15% in one hour...

1144
01:03:56,374 --> 01:03:57,977
The largest single bounce
in FTSE history.

1145
01:03:58,001 --> 01:04:00,128
Those companies
came to us and said,

1146
01:04:00,211 --> 01:04:02,088
"Uh, if you don't
give us $700 billion,

1147
01:04:02,172 --> 01:04:04,012
everything you love and
hold dear in this world

1148
01:04:04,049 --> 01:04:06,009
- will turn to (BLEEP)."
- (LAUGHTER)

1149
01:04:06,092 --> 01:04:10,013
And in return for this
in no way ransom money...

1150
01:04:10,096 --> 01:04:11,473
(LAUGHTER)

1151
01:04:11,556 --> 01:04:14,434
the American people would now
be the proud owner

1152
01:04:14,517 --> 01:04:16,561
of these bales of (BLEEP).

1153
01:04:19,064 --> 01:04:22,692
JOHNSON: The collapse didn't
occur. The system was preserved

1154
01:04:22,776 --> 01:04:25,945
and the opportunity to
substantially reform the system

1155
01:04:26,029 --> 01:04:28,448
was set aside. The stock
market went down sharply,

1156
01:04:28,531 --> 01:04:32,535
and then it came back up sharply
as a result of these measures.

1157
01:04:32,619 --> 01:04:35,038
In addition, wealthy people,
rich people,

1158
01:04:35,121 --> 01:04:36,915
have a lot of exposure
to the stock market,

1159
01:04:36,998 --> 01:04:39,376
so they kept their jobs,
they kept their bonuses,

1160
01:04:39,459 --> 01:04:41,127
the businesses they
were in were not

1161
01:04:41,211 --> 01:04:44,422
substantially disrupted,
and they made more money

1162
01:04:44,506 --> 01:04:46,091
through stock appreciation

1163
01:04:46,174 --> 01:04:48,152
and through dividends and
through expected dividends

1164
01:04:48,176 --> 01:04:50,470
than they had in the
last couple of years.

1165
01:04:50,553 --> 01:04:52,472
REPORTER: Bloomberg
estimates the banks made

1166
01:04:52,555 --> 01:04:55,308
a $13 billion profit
on the spread.

1167
01:04:55,392 --> 01:04:58,144
REPORTER: 73 executives
from the unit that engineered

1168
01:04:58,228 --> 01:05:01,523
the company's downfall
all just got bonus checks

1169
01:05:01,606 --> 01:05:05,693
- worth a million or more.
- $1.6 billion in bonuses.

1170
01:05:07,112 --> 01:05:09,697
JOHNSON: Wall Street and
the views of Wall Street

1171
01:05:09,781 --> 01:05:11,741
had taken over policy.

1172
01:05:13,368 --> 01:05:15,370
That's the quiet coup.

1173
01:05:16,079 --> 01:05:18,081
(TENSE MUSIC)

1174
01:05:22,585 --> 01:05:25,713
FUKUYAMA: Democracies in
general are susceptible to this

1175
01:05:25,797 --> 01:05:27,757
capture by elites.

1176
01:05:30,009 --> 01:05:34,139
And unless the democracy
is renewed by the non-elites

1177
01:05:34,222 --> 01:05:36,391
every now and then rising up,

1178
01:05:36,474 --> 01:05:40,145
the democracy will continue
to move in this direction

1179
01:05:40,228 --> 01:05:45,650
where power and wealth are
more and more concentrated.

1180
01:05:45,733 --> 01:05:49,654
All across the world, you now
have this layer of oligarchs

1181
01:05:49,737 --> 01:05:53,616
that use their money
to buy political influence.

1182
01:05:54,576 --> 01:05:56,578
(POP!)

1183
01:05:57,287 --> 01:05:59,789
(SIREN WAILS)

1184
01:05:59,873 --> 01:06:02,417
PIKETTY: When you have too
strong a concentration of

1185
01:06:02,500 --> 01:06:07,338
capital it leads to excessive
influence over the media,

1186
01:06:07,422 --> 01:06:11,509
and also financing of political
campaigns and political parties

1187
01:06:11,593 --> 01:06:14,721
that are in their own
best interests.

1188
01:06:14,804 --> 01:06:19,934
But this logic of 'one dollar,
one vote' is completely opposed

1189
01:06:20,018 --> 01:06:23,980
to the democratic logic of
'one person, one vote.'

1190
01:06:24,939 --> 01:06:26,941
(DREAMY, WHIMSICAL MUSIC)

1191
01:06:36,784 --> 01:06:39,412
MAN: Rationally speaking,
it would make sense that

1192
01:06:39,496 --> 01:06:42,081
the more of something you have,
maybe the more inclined

1193
01:06:42,165 --> 01:06:45,001
you would be to share it
with other people.

1194
01:06:45,084 --> 01:06:48,379
But that's not what our research
and what a lot of other research

1195
01:06:48,463 --> 01:06:50,507
seems to find.

1196
01:06:50,590 --> 01:06:54,177
We brought strangers
into the lab in pairs of two;

1197
01:06:54,260 --> 01:06:55,970
with a flip of a coin determined

1198
01:06:56,054 --> 01:06:57,597
who was going to be
a rich player

1199
01:06:57,680 --> 01:07:00,141
and was going to
be a poor player.

1200
01:07:00,225 --> 01:07:02,060
(INTRIGUING MUSIC)

1201
01:07:03,770 --> 01:07:07,398
The rich player got two times
as much money to play the game,

1202
01:07:07,482 --> 01:07:09,651
they got to roll both dice
instead of one,

1203
01:07:09,734 --> 01:07:11,736
so they got to move around
the board a lot quicker,

1204
01:07:11,819 --> 01:07:14,280
and that mattered because when
they moved around the board

1205
01:07:14,364 --> 01:07:15,949
<i>and passed 'Go;</i>

1206
01:07:16,032 --> 01:07:19,452
they would collect $200,
whereas the poor person,

1207
01:07:19,536 --> 01:07:22,205
they'd collect $100.

1208
01:07:22,288 --> 01:07:24,332
The inequality's almost
immediately apparent

1209
01:07:24,415 --> 01:07:26,167
to the players.
How couldn't it be?

1210
01:07:26,251 --> 01:07:30,046
But within a couple of minutes,
dynamics start to crystallize.

1211
01:07:35,843 --> 01:07:39,013
And the rich player started
to behave a little differently.

1212
01:07:39,097 --> 01:07:40,807
Rich players become
more dominant.

1213
01:07:42,350 --> 01:07:45,520
Rich players eat more pretzels.

1214
01:07:45,603 --> 01:07:50,441
When moving their piece around
the board, they become louder.

1215
01:07:50,525 --> 01:07:54,237
They start smacking the
board with their piece.

1216
01:07:56,114 --> 01:07:58,700
And the rich players
were significantly ruder.

1217
01:08:00,910 --> 01:08:04,414
They were far more likely
to showcase and talk about

1218
01:08:04,497 --> 01:08:07,375
how well they're doing

1219
01:08:07,458 --> 01:08:11,337
and to belittle the plight
of those poor players.

1220
01:08:13,256 --> 01:08:16,301
So they became
less compassionate.

1221
01:08:16,384 --> 01:08:19,304
These are patterns that we're
observing consistently over

1222
01:08:19,387 --> 01:08:21,139
hundreds of different
individuals.

1223
01:08:23,141 --> 01:08:26,686
You see people who are winning
because of the flip of a coin

1224
01:08:26,769 --> 01:08:29,606
start to act as if they
actually deserve to win.

1225
01:08:32,817 --> 01:08:37,113
One of the questions we ask is,
"Why did you win the game?"

1226
01:08:37,196 --> 01:08:39,282
And you can imagine the
rich players would say,

1227
01:08:39,365 --> 01:08:41,343
"Well, I won the game because
of that flip of the coin

1228
01:08:41,367 --> 01:08:44,662
and I had two times
the advantage.”

1229
01:08:44,746 --> 01:08:48,958
But none... not one...
Of the rich players

1230
01:08:49,042 --> 01:08:53,254
attributed their inevitable
success in this game

1231
01:08:53,338 --> 01:08:58,468
to that force of luck
that randomly got them

1232
01:08:58,551 --> 01:09:02,138
that privileged position
in the first place.

1233
01:09:03,723 --> 01:09:07,185
And when we watch patterns
of human interactions,

1234
01:09:07,268 --> 01:09:10,938
people who feel entitled and
deserving of their own success

1235
01:09:11,022 --> 01:09:14,233
are more willing to privilege
their own interests

1236
01:09:14,317 --> 01:09:16,069
above the interests
of other people

1237
01:09:16,152 --> 01:09:18,571
and often engage in
ways that undermine

1238
01:09:18,655 --> 01:09:22,283
other people's welfare
so that they can get ahead.

1239
01:09:22,367 --> 01:09:26,537
And that's a fairly pernicious
social consequence.

1240
01:09:28,289 --> 01:09:31,084
But it's not about
people who are rich,

1241
01:09:31,167 --> 01:09:34,754
but rather that the experience
of being relatively better off

1242
01:09:34,837 --> 01:09:37,840
than someone seems
to affect everyone,

1243
01:09:37,924 --> 01:09:40,551
or would affect everyone,
in the same way.

1244
01:09:41,886 --> 01:09:43,638
Yes, we won the lottery!

1245
01:09:43,721 --> 01:09:46,057
(LIGHT-HEARTED BRASS MUSIC)

1246
01:09:47,475 --> 01:09:49,435
(METAL CLUNKING)

1247
01:09:49,519 --> 01:09:52,271
LOIS: Peter, my God, what
the hell are you wearing?!

1248
01:09:52,355 --> 01:09:54,107
PETER: It's a solid gold tuxedo,
Lois.

1249
01:09:54,190 --> 01:09:55,608
I had to fight three rappers

1250
01:09:55,692 --> 01:09:57,443
down at the Nonsense Store
for this.

1251
01:09:57,527 --> 01:09:59,320
LOIS: Look, Peter,
this is not who we are.

1252
01:09:59,404 --> 01:10:01,406
I'm worried the money
is changing this family,

1253
01:10:01,489 --> 01:10:03,616
- and not the way you hoped.
- Well, I was hoping

1254
01:10:03,700 --> 01:10:05,451
it would make you shut up,
so you're right.

1255
01:10:05,535 --> 01:10:08,538
PIFF: When we, in experiments,
get actually poor people

1256
01:10:08,621 --> 01:10:10,957
or we make poor people
feel rich,

1257
01:10:11,040 --> 01:10:13,084
again, same pattern of results.

1258
01:10:13,167 --> 01:10:14,544
PETER: Lois,
don't you understand?

1259
01:10:14,627 --> 01:10:16,546
We don't got any of our
old problems anymore.

1260
01:10:16,629 --> 01:10:18,232
We don't have to worry
about paying bills,

1261
01:10:18,256 --> 01:10:20,591
we don't have to worry
about saving dough.

1262
01:10:20,675 --> 01:10:23,010
All we gotta do is
enjoy ourselves.

1263
01:10:23,094 --> 01:10:24,971
Interested?

1264
01:10:25,054 --> 01:10:26,639
(GASPS)

1265
01:10:26,723 --> 01:10:28,766
LOIS: Oh my God!

1266
01:10:30,435 --> 01:10:33,563
Peter, it's beautiful.
Is it a blood diamond?

1267
01:10:33,646 --> 01:10:35,356
PETER: Ah, the bloodiest.

1268
01:10:35,440 --> 01:10:37,775
The two kids who found it were
forced to murder each other.

1269
01:10:37,859 --> 01:10:39,777
LOIS: Oh, Peter, I love it!

1270
01:10:39,861 --> 01:10:43,364
We translate perceptions
and experiences

1271
01:10:43,448 --> 01:10:46,409
of being better off
than others materially

1272
01:10:46,492 --> 01:10:49,245
to being better than others.

1273
01:10:49,328 --> 01:10:51,581
The mind makes that
translation, it seems.

1274
01:10:51,664 --> 01:10:53,624
(ENGINE ROARS)

1275
01:10:58,463 --> 01:11:00,465
(INTRIGUING MUSIC)

1276
01:11:07,013 --> 01:11:09,557
MASON: Once you get people
whose entire life is lived

1277
01:11:09,640 --> 01:11:12,894
on a kind of plane,
you know, in First Class,

1278
01:11:12,977 --> 01:11:15,354
in the bubble of
the security system,

1279
01:11:15,438 --> 01:11:17,774
and your villa in three
or four different countries

1280
01:11:17,857 --> 01:11:20,902
you can move to if things
get a bit unpleasant,

1281
01:11:20,985 --> 01:11:23,237
what happens to taxation?

1282
01:11:23,321 --> 01:11:27,533
What happens is large amounts
of wealth are moved offshore.

1283
01:11:27,617 --> 01:11:29,577
(INTRIGUING MUSIC)

1284
01:11:32,330 --> 01:11:36,125
For decades, individuals
and companies have moved

1285
01:11:36,209 --> 01:11:40,338
their legal selves
in order to avoid paying tax

1286
01:11:40,421 --> 01:11:43,508
that benefits the people
who work for them.

1287
01:11:45,176 --> 01:11:47,762
So that when you come out
of the HQ of one of these

1288
01:11:47,845 --> 01:11:50,556
giant trendy IT companies,

1289
01:11:50,640 --> 01:11:53,351
you fall over,
you hit your head,

1290
01:11:53,434 --> 01:11:55,853
and you're lying on the pavement
in a pool of blood,

1291
01:11:55,937 --> 01:11:58,189
an ambulance arrives

1292
01:11:58,272 --> 01:12:00,983
that has not been paid for
in any way, shape or form

1293
01:12:01,067 --> 01:12:03,069
by the taxes of that company.

1294
01:12:03,152 --> 01:12:05,112
(MONITOR BEEPS, OXYGEN PUFFS)

1295
01:12:05,196 --> 01:12:08,282
That's a very new system
in capitalism.

1296
01:12:08,366 --> 01:12:10,159
(TENSE MUSIC)

1297
01:12:10,243 --> 01:12:12,787
And it is unsustainable

1298
01:12:12,870 --> 01:12:14,997
because to make it work,

1299
01:12:15,081 --> 01:12:18,125
the state must have
access via taxation

1300
01:12:18,209 --> 01:12:20,628
to the incomes of the rich.

1301
01:12:20,711 --> 01:12:22,588
(BABY CRIES)

1302
01:12:22,672 --> 01:12:24,465
(RESOUNDING BOOM)

1303
01:12:24,549 --> 01:12:26,634
REPORTER: The EU has ordered
the Irish government

1304
01:12:26,717 --> 01:12:30,596
to recover almost $15 billion
of unpaid taxes from Apple.

1305
01:12:30,680 --> 01:12:33,391
REPORTER: $15 billion is
more than the four years

1306
01:12:33,474 --> 01:12:36,519
of annual austerity cuts
imposed by the Irish government.

1307
01:12:36,602 --> 01:12:39,272
WOMAN: Amazon's tax
benefits are illegal.

1308
01:12:39,355 --> 01:12:41,774
REPORTER: Facebook paid
less UK corporation tax

1309
01:12:41,858 --> 01:12:43,276
than your average teacher.

1310
01:12:43,359 --> 01:12:45,611
90,000 come from zero
corporation tax.

1311
01:12:45,695 --> 01:12:47,738
- Scrutinize...
- the rich avoiding taxes.

1312
01:12:47,822 --> 01:12:49,365
(VOICES OVERLAP)
Google, Microsoft...

1313
01:12:49,448 --> 01:12:50,658
- McDonald's...
- Facebook...

1314
01:12:52,577 --> 01:12:55,538
(OMINOUS WHOOSHING)

1315
01:12:55,621 --> 01:12:57,915
FOROOHAR: It just works
much better for the holders

1316
01:12:57,999 --> 01:13:02,670
of capital than it does
for people on the ground.

1317
01:13:02,753 --> 01:13:05,548
In particular, the giant
cash-rich tech firms

1318
01:13:05,631 --> 01:13:08,843
can put people and money
wherever they want to put them.

1319
01:13:08,926 --> 01:13:13,639
They just fly 35,000 feet
above national concerns.

1320
01:13:13,723 --> 01:13:17,018
They create far fewer jobs
than big industrial companies

1321
01:13:17,101 --> 01:13:20,771
of the past, yet they
make vastly more money.

1322
01:13:20,855 --> 01:13:23,482
(ATMOSPHERIC ELECTRONIC MUSIC)

1323
01:13:28,362 --> 01:13:30,823
The great irony here is
that everything that makes

1324
01:13:30,907 --> 01:13:33,159
a smart phone smart...

1325
01:13:33,242 --> 01:13:35,786
The internet, GPS,
touchscreen technology...

1326
01:13:35,870 --> 01:13:39,582
All that was our taxpayer money
going into federal agencies

1327
01:13:39,665 --> 01:13:42,251
like DARPA that
created this stuff,

1328
01:13:42,335 --> 01:13:46,422
and yet the wealth doesn't
flow back into the ecosystem.

1329
01:13:46,505 --> 01:13:51,135
Irish guys pay a fee to
Google Netherlands Holding BV.

1330
01:13:51,218 --> 01:13:52,970
Is that to save withholding tax?

1331
01:13:53,054 --> 01:13:54,472
That's my understanding.

1332
01:13:54,555 --> 01:13:56,595
HODGE: It therefore
goes to Google Holdings Ireland?

1333
01:13:56,641 --> 01:13:58,452
- That's correct.
- Which is registered in Ireland

1334
01:13:58,476 --> 01:14:00,269
but administered from Bermuda?

1335
01:14:00,353 --> 01:14:02,939
- That's correct.
- So if that happens,

1336
01:14:03,022 --> 01:14:04,815
your profits actually
go to Bermuda?

1337
01:14:04,899 --> 01:14:06,651
(THE WEEKND'S 'THE MORNING')

1338
01:14:06,734 --> 01:14:10,071
THE WEEKND: All that money,
the money is the motive

1339
01:14:10,154 --> 01:14:14,116
All that money,
the money is the motive

1340
01:14:14,200 --> 01:14:18,079
All that money,
the money she be folding

1341
01:14:18,162 --> 01:14:19,872
Girl put in work

1342
01:14:19,956 --> 01:14:22,083
Girl, girl, put in work

1343
01:14:22,166 --> 01:14:23,793
Girl put in work

1344
01:14:23,876 --> 01:14:26,087
Girl, girl, put in work

1345
01:14:26,170 --> 01:14:27,964
Girl put in work...

1346
01:14:28,047 --> 01:14:32,802
MAN: In 2015, Google Alphabet
reported making $15.5 billion

1347
01:14:32,885 --> 01:14:36,847
profit in Bermuda.

1348
01:14:36,931 --> 01:14:40,267
But nothing actually
happens in Bermuda.

1349
01:14:40,351 --> 01:14:43,229
This is the first way countries

1350
01:14:43,312 --> 01:14:46,899
steal the tax base
from each other.

1351
01:14:46,983 --> 01:14:51,487
The other way is through the
industry of wealth management,

1352
01:14:51,570 --> 01:14:54,740
which has developed
in many countries.

1353
01:14:54,824 --> 01:14:59,537
This industry sells shell
companies and numbered accounts

1354
01:14:59,620 --> 01:15:03,082
protected by bank secrecy
to wealthy families.

1355
01:15:04,250 --> 01:15:06,293
THE WEEKND: All that money

1356
01:15:06,377 --> 01:15:08,462
- The money is the motive
- The money is the motive

1357
01:15:08,546 --> 01:15:12,133
All that money,
the money she be folding

1358
01:15:12,216 --> 01:15:13,926
Girl, put in work...

1359
01:15:14,010 --> 01:15:16,595
ZUCMAN: You can't tax
what you can't measure.

1360
01:15:16,679 --> 01:15:17,888
THE WEEKND: Girl put in work

1361
01:15:17,972 --> 01:15:19,932
Girl, girl, put in work

1362
01:15:23,686 --> 01:15:27,898
ZUCMAN: And so we live in
an incredible statistical fog

1363
01:15:27,982 --> 01:15:32,194
about who owns wealth, who owns
real estate in New York,

1364
01:15:33,237 --> 01:15:34,447
who owns real estate in Paris.

1365
01:15:36,032 --> 01:15:38,534
We check the records
and we see shell companies.

1366
01:15:42,038 --> 01:15:44,331
(TRAFFIC HUMS, HORNS BLARE)

1367
01:15:45,458 --> 01:15:47,460
(STIRRING MUSIC)

1368
01:16:01,223 --> 01:16:06,937
The key to effectively fighting
tax havens is pretty simple.

1369
01:16:08,314 --> 01:16:10,691
We need sanctions
against territories

1370
01:16:10,775 --> 01:16:13,110
that enable tax evasion.

1371
01:16:13,194 --> 01:16:16,197
And we have to change
the way we calculate

1372
01:16:16,280 --> 01:16:18,908
taxable profits in each country.

1373
01:16:19,950 --> 01:16:21,911
Let's take Apple.

1374
01:16:21,994 --> 01:16:28,667
Imagine Apple made $50 billion
in global profits last year

1375
01:16:28,751 --> 01:16:32,880
and 10% of its worldwide
sales were in France.

1376
01:16:34,548 --> 01:16:41,847
Then France could say,
"10% of Apple's global profit,

1377
01:16:41,931 --> 01:16:46,102
"so $5 billion,
should be taxed in France.”

1378
01:16:46,185 --> 01:16:48,771
The beauty of this
system is that

1379
01:16:48,854 --> 01:16:52,691
multinationals can manipulate
the location of their profits,

1380
01:16:52,775 --> 01:16:55,694
but they cannot manipulate
the location of their customers.

1381
01:16:55,778 --> 01:16:57,571
Their customers are
in France, in Germany,

1382
01:16:57,655 --> 01:16:59,115
in England,
in the United States.

1383
01:16:59,198 --> 01:17:01,158
You cannot send them to Bermuda.

1384
01:17:02,701 --> 01:17:04,495
(POP!)

1385
01:17:04,578 --> 01:17:06,831
(SIRENS WAIL, TRAFFIC HUMS)

1386
01:17:08,958 --> 01:17:11,961
BREMMER: Globalization has
opened a global community up

1387
01:17:12,044 --> 01:17:13,420
to each other,

1388
01:17:13,504 --> 01:17:16,799
but it's also meant that
in the developed world,

1389
01:17:16,882 --> 01:17:21,137
corporations were able
to take jobs and move them

1390
01:17:21,220 --> 01:17:23,722
and make a lot
of money out of it.

1391
01:17:23,806 --> 01:17:25,891
(PENSIVE MUSIC)

1392
01:17:25,975 --> 01:17:28,936
And on the other hand,
the working and middle classes

1393
01:17:29,019 --> 01:17:32,523
that were doing quite well
have lost quality of life

1394
01:17:32,606 --> 01:17:34,400
and opportunities.

1395
01:17:35,901 --> 01:17:39,864
And their governments
and their corporations

1396
01:17:39,947 --> 01:17:44,368
have done very little... in some
cases, really nothing at all...

1397
01:17:44,451 --> 01:17:46,412
To address that.

1398
01:17:49,874 --> 01:17:53,043
The United States and Europe
are vastly more divided

1399
01:17:53,127 --> 01:17:54,587
because of globalization.

1400
01:17:54,670 --> 01:17:58,090
India, The Philippines,
China are not.

1401
01:17:58,174 --> 01:18:00,134
(INTRIGUING MUSIC)

1402
01:18:00,217 --> 01:18:02,678
(LAUGHTER)

1403
01:18:02,761 --> 01:18:04,680
(SPLASH)

1404
01:18:04,763 --> 01:18:09,018
Chinese people, they believe
that if they work hard,

1405
01:18:09,101 --> 01:18:10,853
their kids are gonna
have better lives,

1406
01:18:10,936 --> 01:18:12,646
and that's probably true.

1407
01:18:12,730 --> 01:18:15,566
But in the United States,
that's just not true anymore.

1408
01:18:15,649 --> 01:18:17,902
(DRAMATIC, STIRRING MUSIC)

1409
01:18:22,323 --> 01:18:27,077
If you go to Beijing
or Shenzhen or Shanghai

1410
01:18:27,161 --> 01:18:29,788
or Guangzhou or
any of these sort of

1411
01:18:29,872 --> 01:18:32,625
wealthier cities in China
that have made it...

1412
01:18:32,708 --> 01:18:35,252
Shanghai,
where per capita income

1413
01:18:35,336 --> 01:18:39,298
is higher than Portugal... you
will meet middle class Chinese,

1414
01:18:39,381 --> 01:18:41,342
and I mean global
middle class Chinese;

1415
01:18:41,425 --> 01:18:44,136
I don't mean middle class
from the Chinese context.

1416
01:18:44,220 --> 01:18:47,765
And that is a very different
China from what you saw

1417
01:18:47,848 --> 01:18:49,808
even 10 years ago.

1418
01:18:53,479 --> 01:18:56,106
China's now almost the largest
economy in the world;

1419
01:18:56,190 --> 01:18:58,567
within the next
decade it will be,

1420
01:18:58,651 --> 01:19:01,654
but it will still be
state capitalist.

1421
01:19:01,737 --> 01:19:03,989
(DRAMATIC, STIRRING MUSIC)

1422
01:19:07,409 --> 01:19:11,664
State capitalism is where
state-owned enterprises

1423
01:19:11,747 --> 01:19:15,834
are the most important
actors in the economy.

1424
01:19:15,918 --> 01:19:18,212
These corporations are,
in principle,

1425
01:19:18,295 --> 01:19:20,923
trying to make money
and build themselves,

1426
01:19:21,006 --> 01:19:23,092
and sometimes they do
compete against each other

1427
01:19:23,175 --> 01:19:25,844
in a fairly controlled fashion.

1428
01:19:25,928 --> 01:19:29,807
But the other important Chinese
actors are what you'd call

1429
01:19:29,890 --> 01:19:32,101
privately owned
national champions.

1430
01:19:32,184 --> 01:19:35,521
So, in other words, they are
actively supported by the state,

1431
01:19:35,604 --> 01:19:37,398
even though they're
privately held,

1432
01:19:37,481 --> 01:19:39,525
and they benefit accordingly.

1433
01:19:39,608 --> 01:19:41,568
(PLANE ENGINE ROARS)

1434
01:19:43,696 --> 01:19:46,448
Also you have hundreds
of millions of people

1435
01:19:46,532 --> 01:19:48,701
who are quite poor,

1436
01:19:48,784 --> 01:19:50,452
but they want state capitalism.

1437
01:19:50,536 --> 01:19:53,872
It's fine for them, as long as
they can make enough money

1438
01:19:53,956 --> 01:19:57,167
to ensure that their
kids will do better.

1439
01:19:58,252 --> 01:20:00,421
(INDISTINCT TRAIN ANNOUNCEMENTS)

1440
01:20:02,214 --> 01:20:06,510
CHANCEL: The average income
in China since the late 1970s

1441
01:20:06,593 --> 01:20:08,721
has increased by 800%.

1442
01:20:10,514 --> 01:20:13,225
800% is huge.

1443
01:20:13,309 --> 01:20:20,024
But the income of the richest 1%
increased by 2000%.

1444
01:20:20,107 --> 01:20:24,737
So it is a country
that is growing,

1445
01:20:24,820 --> 01:20:27,489
but this growth
is highly unequal.

1446
01:20:27,573 --> 01:20:30,075
(TENSE, STIRRING MUSIC)

1447
01:20:37,499 --> 01:20:40,753
FUKUYAMA: China does show what
freeing up capital will do to

1448
01:20:40,836 --> 01:20:43,130
income distribution.

1449
01:20:43,213 --> 01:20:46,675
Capital really has to be
regulated much, much more

1450
01:20:46,759 --> 01:20:50,054
strictly than things
in the real economy.

1451
01:20:51,430 --> 01:20:53,057
(TENSE MUSIC)

1452
01:20:53,140 --> 01:20:56,769
There's a fundamental difference
between liberalization

1453
01:20:56,852 --> 01:20:58,520
of capital markets

1454
01:20:58,604 --> 01:21:02,816
and liberalization of trade
and goods and services.

1455
01:21:02,900 --> 01:21:07,237
This was one of the big lessons
of the Great Depression.

1456
01:21:09,323 --> 01:21:12,743
FOROOHAR: Modern capitalism
is all about the free movement

1457
01:21:12,826 --> 01:21:14,870
of global capital,

1458
01:21:14,953 --> 01:21:17,915
and the financial system
itself has changed

1459
01:21:17,998 --> 01:21:19,750
over the last 40 years.

1460
01:21:19,833 --> 01:21:22,878
The financial industry has about
doubled in size as a percentage

1461
01:21:22,961 --> 01:21:26,006
of the economy, and that's
actually created slower growth,

1462
01:21:26,090 --> 01:21:28,884
not faster growth.

1463
01:21:28,967 --> 01:21:31,637
When Adam Smith,
the father of modern capitalism,

1464
01:21:31,720 --> 01:21:34,681
was thinking up the idea
of the free market system,

1465
01:21:34,765 --> 01:21:36,683
he was living in
a very different world.

1466
01:21:36,767 --> 01:21:38,727
Hey, why not? My own business.

1467
01:21:38,811 --> 01:21:42,147
All you need's a little capital,
a little push and an idea.

1468
01:21:42,231 --> 01:21:44,566
FOROOHAR: Small and mid-sized
family-owned businesses

1469
01:21:44,650 --> 01:21:45,943
were the norm.

1470
01:21:46,026 --> 01:21:47,754
WOMAN: I wouldn't wear
that hat to a dog fight.

1471
01:21:47,778 --> 01:21:50,048
WOMAN: Why, there isn't a decent
hat in the entire village.

1472
01:21:50,072 --> 01:21:53,951
Why not? Women's hats!
My own business!

1473
01:21:54,034 --> 01:21:55,887
FOROOHAR: He believed that
the financial markets

1474
01:21:55,911 --> 01:21:58,580
were just an intermediary...
They were supposed to take

1475
01:21:58,664 --> 01:22:01,417
everyone's savings,
hold them as bank deposits,

1476
01:22:01,500 --> 01:22:06,255
and then lend them out to the
hairdresser down the street.

1477
01:22:06,338 --> 01:22:08,465
Not to be too cliché,
but it's kind of the

1478
01:22:08,549 --> 01:22:11,844
"It's a Wonderful Life"
model of banking.

1479
01:22:13,387 --> 01:22:15,347
I think if Adam Smith
time-warped,

1480
01:22:15,431 --> 01:22:19,601
he would have no idea what to
make of a "too big to fail" ” bank

1481
01:22:19,685 --> 01:22:22,271
or a giant multinational
company that's doing business

1482
01:22:22,354 --> 01:22:23,939
in 120 different countries,

1483
01:22:24,022 --> 01:22:26,608
all of which have different
regulatory systems.

1484
01:22:26,692 --> 01:22:28,610
It's a completely
different world.

1485
01:22:28,694 --> 01:22:30,737
(TENSE ELECTRONIC MUSIC)

1486
01:22:38,537 --> 01:22:43,792
Statistics today show
that only 15% of money

1487
01:22:43,876 --> 01:22:46,336
coming out of the largest
financial institutions

1488
01:22:46,420 --> 01:22:49,381
is actually going to that kind
of productive lending.

1489
01:22:49,465 --> 01:22:52,050
So what's the other 85% doing?

1490
01:22:52,134 --> 01:22:54,720
It's just moving around
this closed loop

1491
01:22:54,803 --> 01:22:56,388
of the financial system...

1492
01:22:56,472 --> 01:23:00,142
Its assets being bought
and sold by the same people;

1493
01:23:00,225 --> 01:23:03,061
their value going up,
up, up, up, up.

1494
01:23:05,689 --> 01:23:10,068
MASON: For the rich, it's easier
to keep your wealth away

1495
01:23:10,152 --> 01:23:12,446
from productive, risky activity,

1496
01:23:12,529 --> 01:23:15,741
and this is producing
a new social story.

1497
01:23:18,368 --> 01:23:21,747
It's easier to build a property,

1498
01:23:21,830 --> 01:23:23,749
and maybe you don't
fill that property,

1499
01:23:23,832 --> 01:23:26,668
<i>maybe all the apartments in
the property aren't filled,</i>

1500
01:23:26,752 --> 01:23:29,129
but you know in five years' time
that property will be worth

1501
01:23:29,213 --> 01:23:33,759
so much more, that your business
is really to sit on assets

1502
01:23:33,842 --> 01:23:36,345
and hope their value rises,

1503
01:23:36,428 --> 01:23:39,306
rather than to try and make
money by risking your money

1504
01:23:39,389 --> 01:23:44,019
in activities like open a
factory or invent something new.

1505
01:23:47,105 --> 01:23:49,399
EDWARDS: If you own a house,
you're making capital gains

1506
01:23:49,483 --> 01:23:52,861
out of that far in excess
of what people get

1507
01:23:52,945 --> 01:23:54,905
through just regular jobs.

1508
01:23:54,988 --> 01:23:57,658
Therefore, people have
become property speculators.

1509
01:23:57,741 --> 01:24:01,745
And this changes the whole way
the housing situation operates.

1510
01:24:03,121 --> 01:24:05,499
And, essentially,
it starts dividing.

1511
01:24:07,000 --> 01:24:08,710
This housing crisis
that's happening

1512
01:24:08,794 --> 01:24:10,420
really throughout the West
is something

1513
01:24:10,504 --> 01:24:14,800
that particularly
affects the young.

1514
01:24:14,883 --> 01:24:19,221
Most people view this as some
sort of generational fight.

1515
01:24:19,304 --> 01:24:21,723
The baby boomers benefited
from buying houses

1516
01:24:21,807 --> 01:24:23,642
when they were relatively cheap,

1517
01:24:23,725 --> 01:24:27,062
and therefore have a very nice
nest egg for their retirement,

1518
01:24:27,145 --> 01:24:31,942
and it's the young people
that can't even rent cheaply.

1519
01:24:32,025 --> 01:24:34,861
Those at the bottom,
I think, are quite polarized...

1520
01:24:34,945 --> 01:24:37,531
Angry, in fact.

1521
01:24:37,614 --> 01:24:40,784
These houses, essentially,
earn more money than they do,

1522
01:24:40,867 --> 01:24:42,911
and they have to rent them.

1523
01:24:44,162 --> 01:24:46,164
(SIREN WAILS)

1524
01:24:52,254 --> 01:24:54,756
MASON: It transmits to the poor
or middle class person

1525
01:24:54,840 --> 01:24:58,552
that the best thing they can do
is to hope that their home

1526
01:24:58,635 --> 01:25:00,345
rises so much in value

1527
01:25:00,429 --> 01:25:02,598
that it offsets all the other
problems in their life,

1528
01:25:02,681 --> 01:25:04,349
like that their pension
was destroyed

1529
01:25:04,433 --> 01:25:05,767
or that they lost their job

1530
01:25:05,851 --> 01:25:08,729
or that their kids
are gonna be poor.

1531
01:25:08,812 --> 01:25:10,772
(EDGY, TENSE MUSIC)

1532
01:25:18,697 --> 01:25:22,576
SHAHEEN: Young people
are naturally more hopeful.

1533
01:25:22,659 --> 01:25:25,537
But they are aware,
they are acutely aware,

1534
01:25:25,621 --> 01:25:28,332
that they've been
given a raw deal.

1535
01:25:30,292 --> 01:25:32,419
You know, why is it,
to educate yourself,

1536
01:25:32,502 --> 01:25:36,840
you have to get yourself
into £50,000 of debt?

1537
01:25:36,923 --> 01:25:40,552
And a lot of young
people feel infantiled.

1538
01:25:40,636 --> 01:25:44,473
Why does my incredibly smart
26-year-old brother-in-law

1539
01:25:44,556 --> 01:25:46,183
still have to live at home?

1540
01:25:46,266 --> 01:25:49,853
He's asking that,
my in-laws are asking that.

1541
01:25:51,647 --> 01:25:53,649
(TRAIN HUMS)

1542
01:26:02,741 --> 01:26:04,910
(BRAKES SQUEAL)

1543
01:26:04,993 --> 01:26:08,664
What we've told people is that,
"You're not poor;

1544
01:26:08,747 --> 01:26:10,415
you're a millionaire-in-waiting.

1545
01:26:10,499 --> 01:26:12,918
And because of that,
don't worry about inequality,

1546
01:26:13,001 --> 01:26:14,795
just focus on how
hard you're working

1547
01:26:14,878 --> 01:26:18,674
and trying to run, run,
run, run up that hill,"

1548
01:26:18,757 --> 01:26:21,009
(TENSE MUSIC)

1549
01:26:21,093 --> 01:26:26,306
Which is ironic, because
societies that are more unequal

1550
01:26:26,390 --> 01:26:28,517
have less social mobility.

1551
01:26:30,977 --> 01:26:33,522
The rungs of the ladder
grow apart,

1552
01:26:33,605 --> 01:26:38,235
people have the money to make
sure they stay at the top,

1553
01:26:38,318 --> 01:26:41,822
and it means it's harder
for people to climb.

1554
01:26:41,905 --> 01:26:46,451
That's something that you find
again and again in the data.

1555
01:26:47,327 --> 01:26:49,955
The system is rigged.

1556
01:26:50,038 --> 01:26:53,917
And people aren't stupid...
They recognize that.

1557
01:26:56,670 --> 01:26:58,672
(SOMBER MUSIC)

1558
01:27:00,298 --> 01:27:02,300
(SIREN WAILS)

1559
01:27:04,720 --> 01:27:06,888
(PULSING, BROODING MUSIC)

1560
01:27:09,099 --> 01:27:11,226
TETT: Essentially, what's
happening is that you're

1561
01:27:11,309 --> 01:27:14,020
getting an economy which
is more and more productive,

1562
01:27:14,104 --> 01:27:17,607
but where the gains of those
productivity increases

1563
01:27:17,691 --> 01:27:22,112
are going into the hands of
a very small number of people.

1564
01:27:22,195 --> 01:27:23,822
And where there is job growth

1565
01:27:23,905 --> 01:27:25,741
is at the lower end
of the spectrum,

1566
01:27:25,824 --> 01:27:29,244
which is often low-paid,
fairly unsatisfactory work.

1567
01:27:29,327 --> 01:27:31,288
(UPBEAT, EDGY MUSIC)

1568
01:27:36,001 --> 01:27:38,962
Our labor market is shifting.

1569
01:27:39,045 --> 01:27:43,258
More and more, it classifies
people as "self-employed.”

1570
01:27:43,341 --> 01:27:45,719
And what that means is that
companies won't owe them

1571
01:27:45,802 --> 01:27:49,514
holiday pay,
won't owe them a pension,

1572
01:27:49,598 --> 01:27:52,684
and those individual workers
have to make sure

1573
01:27:52,768 --> 01:27:55,604
that they can look after
themselves if they're sick,

1574
01:27:55,687 --> 01:27:58,023
if they want to take a holiday.

1575
01:27:59,232 --> 01:28:01,234
(MUSIC CONTINUES)

1576
01:28:02,652 --> 01:28:04,821
MASON: You know what,
when Piketty says

1577
01:28:04,905 --> 01:28:08,200
that the future for capitalism
is this highly illegal,

1578
01:28:08,283 --> 01:28:13,038
highly socially immobile future,
it's already happening.

1579
01:28:14,414 --> 01:28:16,500
(EDGY, TENSE MUSIC FADES)

1580
01:28:19,085 --> 01:28:21,379
TETT: America's about to see
the biggest wealth transfer

1581
01:28:21,463 --> 01:28:25,467
in history take place, as
the generation which made money

1582
01:28:25,550 --> 01:28:27,260
after World War II

1583
01:28:27,344 --> 01:28:30,889
is passing that wealth on
to their children.

1584
01:28:30,972 --> 01:28:32,933
(PLAYFUL MUSIC)

1585
01:28:40,232 --> 01:28:42,651
Something in the order
of $12 trillion or more

1586
01:28:42,734 --> 01:28:44,736
is going to be passed on
to the next generation

1587
01:28:44,820 --> 01:28:47,656
in the next 10 to 15 years.

1588
01:28:47,739 --> 01:28:51,326
And that will be invested in a
way that it creates more wealth.

1589
01:28:53,787 --> 01:28:57,541
(INTRIGUING MUSIC)

1590
01:28:59,000 --> 01:29:01,127
ZUCMAN: It's very likely
that in the 21st century

1591
01:29:01,211 --> 01:29:03,797
inheritance will return
to playing a role

1592
01:29:03,880 --> 01:29:08,260
as significant as in
19th century England and France.

1593
01:29:10,804 --> 01:29:15,350
Inheritance allows a small
portion of the population

1594
01:29:15,433 --> 01:29:17,811
to lead a very opulent lifestyle

1595
01:29:19,145 --> 01:29:23,275
because inherited wealth
produces an income.

1596
01:29:26,111 --> 01:29:29,281
In fact, the rate of return on
capital throughout history

1597
01:29:29,364 --> 01:29:31,491
has almost always been higher

1598
01:29:31,575 --> 01:29:34,411
than the rate
of economic growth.

1599
01:29:41,668 --> 01:29:43,837
PIKETTY:
If we look back to 1700,

1600
01:29:43,920 --> 01:29:47,048
which is the very beginning
of Industrial Revolution,

1601
01:29:47,132 --> 01:29:51,303
until today, 2018, the growth
rate of the world economy

1602
01:29:51,386 --> 01:29:54,389
is 1.6% per year
over three centuries.

1603
01:29:54,472 --> 01:29:56,224
(HORSE WHINNIES)

1604
01:29:56,308 --> 01:29:59,853
This is much less than
the rate of return on capital,

1605
01:29:59,936 --> 01:30:02,016
which is around 4% to 5%
a year over the same period.

1606
01:30:07,652 --> 01:30:10,780
But is it catastrophic?
No, not necessarily.

1607
01:30:10,864 --> 01:30:14,618
If everyone owned
a portion of the capital,

1608
01:30:14,701 --> 01:30:17,245
so if everyone owned
an apartment

1609
01:30:17,329 --> 01:30:18,830
and shares in a pension fund,

1610
01:30:18,914 --> 01:30:21,708
it wouldn't be so bad
that the return on capital

1611
01:30:21,791 --> 01:30:24,502
is higher than the growth rate.

1612
01:30:24,586 --> 01:30:28,423
The problem is
concentration of ownership

1613
01:30:28,506 --> 01:30:30,186
and therefore
also of power within society,

1614
01:30:33,386 --> 01:30:38,600
which leads to a reproduction
of social hierarchies

1615
01:30:38,683 --> 01:30:41,394
and rising tensions among
the working and middle classes.

1616
01:30:44,898 --> 01:30:46,900
(TENSE MUSIC)

1617
01:30:51,071 --> 01:30:53,031
FOROOHAR: There's now
research showing

1618
01:30:53,114 --> 01:30:54,616
that in advanced economies,

1619
01:30:54,699 --> 01:30:58,161
that two-thirds of the
population is now on track

1620
01:30:58,244 --> 01:31:00,413
to be poorer than their parents,

1621
01:31:00,497 --> 01:31:03,333
which is a huge, huge
mega political trend.

1622
01:31:03,416 --> 01:31:06,044
(EXPLOSION BOOMS,
GLASS SHATTERS)

1623
01:31:06,127 --> 01:31:07,963
(SIREN WAILS)

1624
01:31:08,922 --> 01:31:11,216
(PEOPLE YELL INDISTINCTLY)

1625
01:31:16,930 --> 01:31:20,809
MASON: People on the streets
are starting to say, "Enough"...

1626
01:31:20,892 --> 01:31:25,397
OFFICER: Disperse yourselves
or we will have to use force.

1627
01:31:25,480 --> 01:31:26,982
MASON: enough
of the inequality

1628
01:31:27,065 --> 01:31:28,858
and enough of not having a story

1629
01:31:28,942 --> 01:31:31,736
about how this ever gets better.

1630
01:31:31,820 --> 01:31:33,321
And people are reaching out

1631
01:31:33,405 --> 01:31:35,281
for the nearest thing
they can cling to,

1632
01:31:35,365 --> 01:31:37,659
and often that is their
identity, their ethnicity,

1633
01:31:37,742 --> 01:31:39,911
their religion.

1634
01:31:39,995 --> 01:31:41,955
(TENSE MUSIC)

1635
01:31:46,793 --> 01:31:50,171
And they lash out against the
nearest enemy they can find.

1636
01:31:50,255 --> 01:31:52,465
BORIS JOHNSON: Vast amounts
of unskilled labor

1637
01:31:52,549 --> 01:31:54,300
coming into this country.

1638
01:31:54,384 --> 01:31:56,845
DONALD TRUMP: They're bringing
drugs, they're bringing crime,

1639
01:31:56,928 --> 01:31:58,638
they're rapists.

1640
01:31:58,722 --> 01:32:01,725
MAN: Behind mass immigration
is Islamism.

1641
01:32:01,808 --> 01:32:04,269
Behind mass immigration
is terrorism.

1642
01:32:04,352 --> 01:32:06,813
MASON: But ultimately,
none of that will work.

1643
01:32:06,896 --> 01:32:10,859
Blaming your neighbor
doesn't make you any richer.

1644
01:32:12,402 --> 01:32:14,029
PIKETTY: There are
always politicians

1645
01:32:14,112 --> 01:32:18,283
tempted to exploit
the rising inequality.

1646
01:32:21,327 --> 01:32:23,371
And you could see this
very clearly

1647
01:32:23,455 --> 01:32:25,373
in the world before 1914.

1648
01:32:25,457 --> 01:32:27,375
(PEOPLE CHANT)

1649
01:32:27,459 --> 01:32:30,086
And I'm very afraid at the
beginning of the 21st century

1650
01:32:30,170 --> 01:32:32,005
that because we feel we cannot

1651
01:32:32,088 --> 01:32:34,340
regulate international
capitalism,

1652
01:32:34,424 --> 01:32:38,470
we cannot properly tax
multinationals and billionaires,

1653
01:32:38,553 --> 01:32:43,224
instead we vent our anger
on immigrants.

1654
01:32:43,308 --> 01:32:46,311
It's safer than attacking
multinationals.

1655
01:32:46,394 --> 01:32:48,354
(SIREN WAILS)

1656
01:32:51,524 --> 01:32:53,151
But the truth is,

1657
01:32:53,234 --> 01:32:56,738
to solve the rise and
persistence of inequality,

1658
01:32:56,821 --> 01:32:59,741
we need a progressive
tax on capital.

1659
01:33:02,118 --> 01:33:05,830
And also, ownership rights
cannot be eternal.

1660
01:33:07,415 --> 01:33:10,043
The moment capital is inherited
by the next generation,

1661
01:33:10,126 --> 01:33:13,421
and also each year if
you own a lot of capital,

1662
01:33:13,505 --> 01:33:17,467
you have to return to
the community 1%, 2%, 3%,

1663
01:33:17,550 --> 01:33:21,262
or why not 5% or 10% if you
own billions and billions?

1664
01:33:21,346 --> 01:33:25,767
And if you continue to
invest your capital usefully,

1665
01:33:25,850 --> 01:33:29,521
with high returns,
you can continue to prosper.

1666
01:33:29,604 --> 01:33:32,607
But if financial markets allow
you to have a high return

1667
01:33:32,690 --> 01:33:35,193
without doing anything,

1668
01:33:35,276 --> 01:33:40,615
then tax rates are set
to erode this mechanism.

1669
01:33:43,409 --> 01:33:45,411
(POIGNANT MUSIC)

1670
01:33:48,331 --> 01:33:50,917
This means we'll be able
to control

1671
01:33:51,000 --> 01:33:52,794
some of the concentration
of capital,

1672
01:33:52,877 --> 01:33:54,420
and therefore political power,

1673
01:33:57,090 --> 01:33:59,968
and also access to property
for the middle class.

1674
01:34:02,095 --> 01:34:04,097
(STIRRING MUSIC)

1675
01:34:04,931 --> 01:34:06,683
(PEOPLE SHOUT)

1676
01:34:16,109 --> 01:34:19,779
A lot of people are not
ready to discuss the merits

1677
01:34:19,863 --> 01:34:23,741
of strong taxation rates on
revenue and inheritance.

1678
01:34:23,825 --> 01:34:26,452
But without this to
regulate capitalism,

1679
01:34:26,536 --> 01:34:29,497
there will be disastrous
consequences for everyone.

1680
01:34:30,832 --> 01:34:32,834
(MUSIC CONTINUES)

1681
01:34:41,092 --> 01:34:43,195
BREMMER: You know, if you wanna
think about what the longer term

1682
01:34:43,219 --> 01:34:46,931
implications are, I mean, the
truly dystopian implications,

1683
01:34:47,015 --> 01:34:48,725
you think about horses.

1684
01:34:50,143 --> 01:34:53,021
I mean, we used to
have a lot of horses.

1685
01:34:54,022 --> 01:34:55,648
End of the 19th century, right,

1686
01:34:55,732 --> 01:34:59,402
I mean, horses were critical
for industrialization.

1687
01:34:59,485 --> 01:35:01,696
And then they weren't,

1688
01:35:01,779 --> 01:35:04,240
because you have all these
industrial processes

1689
01:35:04,324 --> 01:35:07,911
that are much more efficient
than horses are.

1690
01:35:09,579 --> 01:35:12,582
And, you know, for all
of the technophiles

1691
01:35:12,665 --> 01:35:16,836
that are saying, "Technology
has always created more jobs,

1692
01:35:16,920 --> 01:35:18,796
and so it will continue to,"

1693
01:35:18,880 --> 01:35:22,050
I say, "Technology has always
created more jobs,

1694
01:35:22,133 --> 01:35:26,930
as long as you had things
that human beings could do."”

1695
01:35:32,727 --> 01:35:36,022
But when technology
starts actually getting at

1696
01:35:36,105 --> 01:35:39,400
the basic functionality
of a human being,

1697
01:35:42,153 --> 01:35:46,950
then human beings start becoming
the equivalent of horses.

1698
01:35:49,118 --> 01:35:50,870
And that doesn't mean

1699
01:35:50,954 --> 01:35:54,165
that we can no longer
have meaningful lives,

1700
01:35:54,249 --> 01:35:56,334
but it means that you
have to change your model

1701
01:35:56,417 --> 01:36:00,088
because capitalism is
no longer about labor.

1702
01:36:01,214 --> 01:36:03,216
(STIRRING MUSIC)

1703
01:36:04,884 --> 01:36:08,513
And the problem is this is
coming soon, soon, soon.

1704
01:36:09,847 --> 01:36:13,142
You look at driverless
technologies.

1705
01:36:13,226 --> 01:36:17,730
Driving is, by the way, the
single largest or second largest

1706
01:36:17,814 --> 01:36:21,859
employer of people in every
one of the 50 US states,

1707
01:36:21,943 --> 01:36:25,738
and within 10 years,
most of those jobs are gone.

1708
01:36:28,491 --> 01:36:33,788
So you will address capital,
because if you don't, right,

1709
01:36:33,871 --> 01:36:37,375
you are going to have
very serious problems.

1710
01:36:38,710 --> 01:36:40,712
(OMINOUS MUSIC)

1711
01:36:44,090 --> 01:36:46,175
(TRAFFIC HUMS, DOGS BARK)

1712
01:36:49,470 --> 01:36:51,723
(INDISTINCT CHATTER)

1713
01:36:51,806 --> 01:36:53,766
(VEHICLES WHIRR)

1714
01:36:57,061 --> 01:36:58,813
NAIDU: We're leaving
an industrial economy

1715
01:36:58,896 --> 01:37:02,066
and going to
a post-industrial economy.

1716
01:37:02,150 --> 01:37:04,485
And we have to make choices

1717
01:37:04,569 --> 01:37:07,113
about which future
we wind up in.

1718
01:37:07,196 --> 01:37:09,490
(MAN SHOUTS)

1719
01:37:09,574 --> 01:37:13,619
You can have abundance that
is very unequally distributed,

1720
01:37:13,703 --> 01:37:17,290
where we have the robots
that can do anything,

1721
01:37:17,373 --> 01:37:20,168
but the only people that own
the robots are a very small

1722
01:37:20,251 --> 01:37:22,211
segment of society...

1723
01:37:24,005 --> 01:37:26,799
basically like Elysium,
where a bunch of people

1724
01:37:26,883 --> 01:37:29,302
live in ecologically
protected spaces

1725
01:37:29,385 --> 01:37:33,848
and everyone else is living in,
like, a hot, putrid mess.

1726
01:37:36,684 --> 01:37:39,520
And so it's a political problem.

1727
01:37:40,688 --> 01:37:42,857
(ELECTRONIC MUSIC)

1728
01:37:49,947 --> 01:37:54,577
PIKETTY: The challenges today of
creating a more equal society

1729
01:37:54,660 --> 01:37:57,455
are obviously different
from the 20th century.

1730
01:37:57,538 --> 01:38:01,501
But the important point
I want to stress is that

1731
01:38:02,835 --> 01:38:05,421
it's not technically impossible;

1732
01:38:05,505 --> 01:38:07,625
it's primarily a political
and intellectual challenge.

1733
01:38:11,761 --> 01:38:13,554
And the good news is that

1734
01:38:13,638 --> 01:38:16,391
we can also find reasons
from history to be optimistic.

1735
01:38:17,767 --> 01:38:21,020
(LIGHT MUSIC)

1736
01:38:21,104 --> 01:38:25,358
History shows us that if we
want society to be cohesive

1737
01:38:25,441 --> 01:38:27,610
in a peaceful and
harmonious way,

1738
01:38:27,693 --> 01:38:31,072
we must prevent inequality
from becoming too high.

1739
01:38:35,410 --> 01:38:39,705
I am for controlling capital
to go beyond capitalism,

1740
01:38:42,500 --> 01:38:46,671
with ways that are more
democratic, more inclusive,

1741
01:38:46,754 --> 01:38:51,759
and finally allow us to project
ourselves into the 21st century.

1742
01:38:54,345 --> 01:38:56,347
(REFLECTIVE MUSIC)