1 00:00:02,000 --> 00:00:07,000 Downloaded from YTS.MX 2 00:00:08,000 --> 00:00:13,000 Official YIFY movies site: YTS.MX 3 00:01:07,067 --> 00:01:08,633 MALE REPORTER: ...promise from the authorities 4 00:01:08,677 --> 00:01:11,984 that there would be some change, 5 00:01:12,028 --> 00:01:14,335 the pressure for reform is gathering pace 6 00:01:14,378 --> 00:01:17,207 and is gathering support. 7 00:01:17,251 --> 00:01:20,819 Differences between capitalism and communism is so strong 8 00:01:20,863 --> 00:01:23,431 that only concrete and barbed wire could hold them-- 9 00:01:23,474 --> 00:01:27,826 WOMAN: We want another way to reconstruct our society. 10 00:01:29,393 --> 00:01:32,179 FEMALE REPORTER: On the streets of East German cities, 11 00:01:32,222 --> 00:01:34,616 scores of people demanding democratic reforms 12 00:01:34,659 --> 00:01:36,226 were dragged off by... 13 00:01:36,270 --> 00:01:38,576 MALE REPORTER: Security police dragged individuals 14 00:01:38,620 --> 00:01:41,536 from the crowd, beating them over the head, 15 00:01:41,579 --> 00:01:44,930 and throwing them into the back of waiting lorries. 16 00:03:23,290 --> 00:03:24,421 ♪ Cristal, Maybach 17 00:03:24,465 --> 00:03:25,988 ♪ Diamonds on your timepiece 18 00:03:26,031 --> 00:03:28,599 ♪ Jet planes, islands, tigers on a gold leash ♪ 19 00:03:28,643 --> 00:03:30,906 ♪ We don't care 20 00:03:30,949 --> 00:03:33,430 ♪ We aren't caught up in your love affair ♪ 21 00:03:58,803 --> 00:04:01,371 ♪ We didn't come from money 22 00:04:01,415 --> 00:04:03,721 ♪ But every song's like gold teeth, Grey Goose ♪ 23 00:04:03,765 --> 00:04:05,506 ♪ Trippin' in the bathroom 24 00:04:05,549 --> 00:04:08,160 ♪ Bloodstains, ball gowns, trashing the hotel room ♪ 25 00:04:08,204 --> 00:04:10,206 ♪ We don't care... 26 00:04:23,001 --> 00:04:26,309 - ♪ And we'll never be royals - ♪ Royals 27 00:04:26,353 --> 00:04:28,964 ♪ It don't run in our blood 28 00:04:29,007 --> 00:04:31,749 ♪ That kind of lux just ain't for us ♪ 29 00:04:31,793 --> 00:04:33,969 ♪ We crave a different kind of buzz ♪ 30 00:04:34,012 --> 00:04:36,580 - ♪ Let me be your ruler - ♪ Ruler 31 00:04:37,886 --> 00:04:39,844 ♪ You can call me Queen B 32 00:04:39,888 --> 00:04:41,106 ♪ And, baby, I'll rule 33 00:04:41,150 --> 00:04:44,458 ♪ I'll rule, I'll rule, I'll rule ♪ 34 00:04:44,501 --> 00:04:46,677 ♪ Let me live that fantasy ♪ 35 00:06:11,371 --> 00:06:14,765 WOMAN: In the 18th century, life for the poor is grim. 36 00:06:14,809 --> 00:06:16,854 If you're lucky, you might be a servant. 37 00:06:16,898 --> 00:06:19,204 Everyone else is a hand-to-mouth laborer, 38 00:06:19,248 --> 00:06:22,033 moving from place to place, following the work, 39 00:06:22,077 --> 00:06:26,560 being treated by the landowners exactly as they please. 40 00:06:26,603 --> 00:06:28,257 And of course there were no benefits, 41 00:06:28,300 --> 00:06:31,086 there's no health service, there's no free schooling, 42 00:06:31,129 --> 00:06:33,480 there's absolutely nothing. 43 00:06:35,003 --> 00:06:37,440 So poverty is a death sentence. 44 00:06:39,224 --> 00:06:42,532 And what's very striking is the average life expectancy 45 00:06:42,576 --> 00:06:44,578 in the 18th century is 17. 46 00:06:52,455 --> 00:06:55,502 MAN: At the time, what capital really looks like is 47 00:06:55,545 --> 00:06:59,897 money, money-lending and land-owning. 48 00:06:59,941 --> 00:07:04,554 You have a guy that sits in a fort and basically claims taxes 49 00:07:04,598 --> 00:07:07,122 on all the people that work his land. 50 00:07:07,165 --> 00:07:08,906 And we sort of know what that looks like 51 00:07:08,950 --> 00:07:10,473 from all kinds of movies. 52 00:07:10,517 --> 00:07:12,170 Really, with what I get from these peasants, 53 00:07:12,214 --> 00:07:14,695 I can hardly afford to pay my perfume bills. 54 00:07:14,738 --> 00:07:17,480 What about Roulet? Has he paid his rent? 55 00:07:17,524 --> 00:07:19,439 Roulet died last week. 56 00:07:19,482 --> 00:07:22,311 He died with his rent unpaid. 57 00:07:22,354 --> 00:07:24,748 - What did he die of? - Hunger. 58 00:07:24,792 --> 00:07:27,403 Hunger is an indulgence with these peasants. 59 00:07:27,447 --> 00:07:28,665 Oh, I keep forgetting, Gabelle, 60 00:07:28,709 --> 00:07:30,928 you're a humanitarian, aren't you? 61 00:07:30,972 --> 00:07:33,453 You think that one person is as good as another -- 62 00:07:33,496 --> 00:07:37,021 a naive notion so contradicted by the facts. 63 00:07:42,984 --> 00:07:45,160 WILLIAMS: For the rich, inheritance is the obsession. 64 00:07:45,203 --> 00:07:47,205 It's a very strict code. 65 00:07:47,249 --> 00:07:49,294 The eldest son gets the capital. 66 00:07:49,338 --> 00:07:50,905 He gets everything -- he gets the money, 67 00:07:50,948 --> 00:07:52,950 he gets the house, he gets the land -- 68 00:07:52,994 --> 00:07:55,562 and that makes him incredibly powerful, 69 00:07:55,605 --> 00:07:59,174 just through an accident of birth. 70 00:07:59,217 --> 00:08:02,003 These land-owning men, these first sons, 71 00:08:02,046 --> 00:08:04,527 they also have a huge amount of political power, 72 00:08:04,571 --> 00:08:08,444 because a lot of them are the MPs, they're elites. 73 00:08:08,488 --> 00:08:11,186 And as a consequence, they are driven by a desire 74 00:08:11,229 --> 00:08:14,885 to protect their own income, to protect their own world, 75 00:08:14,929 --> 00:08:17,192 and it simply doesn't occur to them 76 00:08:17,235 --> 00:08:20,151 that poor people deserve some redistribution of wealth. 77 00:08:20,195 --> 00:08:22,893 Taxation, they resist very strongly. 78 00:08:22,937 --> 00:08:25,026 And this is the way that the aristocracy worked, 79 00:08:25,069 --> 00:08:28,377 not just in Britain, but all through Europe, 80 00:08:28,420 --> 00:08:32,424 and the aim is to conserve the aristocratic power. 81 00:08:38,822 --> 00:08:40,694 The examples that Thomas Piketty has 82 00:08:40,737 --> 00:08:43,261 of Jane Austen and Balzac, they're very fitting, 83 00:08:43,305 --> 00:08:45,350 because when you read Jane Austen, 84 00:08:45,394 --> 00:08:47,178 it is all about money, 85 00:08:47,222 --> 00:08:49,703 and this money is not earned through work, 86 00:08:49,746 --> 00:08:52,357 it's not earned through owning businesses, 87 00:08:52,401 --> 00:08:55,012 it's earned through land, it's inherited land. 88 00:09:07,329 --> 00:09:09,897 WILLIAMS: Mr. Darcy, for example, in Pride and Prejudice, 89 00:09:09,940 --> 00:09:11,594 he has this huge estate. 90 00:09:11,638 --> 00:09:13,335 He doesn't even have to be there. 91 00:09:13,378 --> 00:09:16,599 This land just creates money for him. 92 00:09:16,643 --> 00:09:19,254 - How good of you to come. 93 00:09:19,297 --> 00:09:20,647 LIZZIE: He looks miserable, poor sod. 94 00:09:20,690 --> 00:09:21,952 CHARLOTTE: Miserable he may be, 95 00:09:21,996 --> 00:09:24,259 but poor he most certainly is not. 96 00:09:24,302 --> 00:09:26,174 - LIZZIE: Tell me. - CHARLOTTE: 10,000 a year, 97 00:09:26,217 --> 00:09:28,089 and he owns half of Derbyshire. 98 00:09:28,132 --> 00:09:29,656 - The miserable half? 99 00:09:33,442 --> 00:09:34,748 WILLIAMS: Jane Austen created a fantasy 100 00:09:34,791 --> 00:09:36,488 that you could get your hands on this wealth 101 00:09:36,532 --> 00:09:39,404 if you were just a bit fun and a bit witty. 102 00:09:39,448 --> 00:09:42,364 But the reality is there's no way a Mr. Darcy would marry 103 00:09:42,407 --> 00:09:43,844 girls like Lizzie Bennet, 104 00:09:43,887 --> 00:09:47,804 who actually haven't got a penny to their names. 105 00:09:47,848 --> 00:09:51,591 He would marry an heiress, possibly even a cousin, 106 00:09:51,634 --> 00:09:53,897 and create this, sort of, megalopolis estate. 107 00:09:56,857 --> 00:10:01,992 WILLIAMS: Money marries money. There's nothing to do with love. 108 00:10:02,036 --> 00:10:03,907 And what we see now, 109 00:10:03,951 --> 00:10:05,953 almost a cycling back to the 18th century. 110 00:10:08,912 --> 00:10:12,873 In Britain, inherited wealth is everything... again. 111 00:10:12,916 --> 00:10:17,486 Nowadays, 1% of the population owns 70% of our land. 112 00:10:17,529 --> 00:10:19,923 ♪ I've been broke all my life 113 00:10:19,967 --> 00:10:21,272 ♪ Now wonder 114 00:10:21,316 --> 00:10:23,927 ♪ How does it feel to be rich? 115 00:10:23,971 --> 00:10:26,016 ♪ How does it feel to be rich? 116 00:10:26,060 --> 00:10:28,453 ♪ Oh, I done worked all my life ♪ 117 00:10:29,454 --> 00:10:30,978 ♪ Now wonder 118 00:10:31,021 --> 00:10:33,458 ♪ How does it feel to just live? ♪ 119 00:10:33,502 --> 00:10:35,547 ♪ How does it feel to just live? ♪ 120 00:10:35,591 --> 00:10:39,203 WOMAN: There's always been an elite, which is usually adept at 121 00:10:39,247 --> 00:10:41,597 reproducing its privilege through generations, 122 00:10:41,641 --> 00:10:46,820 monopolizing both economic and social and cultural capital. 123 00:10:46,863 --> 00:10:50,084 The way the elite stays in power and passes on their privilege 124 00:10:50,127 --> 00:10:51,607 to the next generation 125 00:10:51,651 --> 00:10:54,218 is also by shaping the way that we think. 126 00:10:54,262 --> 00:10:56,307 ♪ How does it feel to be rich? 127 00:10:56,351 --> 00:10:58,788 ♪ How does it feel to be ri-i-ich? ♪ 128 00:10:58,832 --> 00:11:01,138 ♪ How does it feel to just live? ♪ 129 00:11:01,182 --> 00:11:03,184 ♪ How does it feel to just live? ♪♪ 130 00:11:05,490 --> 00:11:07,362 TETT: Traditionally, economists have argued 131 00:11:07,405 --> 00:11:10,408 that inequality is a very powerful driver 132 00:11:10,452 --> 00:11:12,889 of progress and innovation 133 00:11:12,933 --> 00:11:15,849 because the idea is that competition, essentially, 134 00:11:15,892 --> 00:11:17,894 makes people try harder. 135 00:11:19,766 --> 00:11:23,160 The problem is that extreme inequality 136 00:11:23,204 --> 00:11:27,382 increasingly seems to be a source of great economic stress, 137 00:11:27,425 --> 00:11:30,951 social stress and political stress. 138 00:11:30,994 --> 00:11:34,563 Because if you have a situation where an elite 139 00:11:34,606 --> 00:11:37,261 are so rigidly protective of their ranks 140 00:11:37,305 --> 00:11:39,916 that nobody can ever rise, there's no social mobility, 141 00:11:39,960 --> 00:11:42,136 you tend to end up with a full-blown revolution. 142 00:12:08,292 --> 00:12:10,338 WILLIAMS: In the French Revolution, the banner is 143 00:12:10,381 --> 00:12:13,254 "Liberté, égalité, fraternité." 144 00:12:13,297 --> 00:12:15,560 It's going to be brotherhood, everyone's going to be free. 145 00:12:18,128 --> 00:12:20,914 But yet within a tiny amount of time, 146 00:12:20,957 --> 00:12:23,177 you have this government of bankers, 147 00:12:23,220 --> 00:12:27,094 and what they do is start to create the elites once more. 148 00:12:28,748 --> 00:12:31,054 ♪ This is the land that fought for liberty ♪ 149 00:12:31,098 --> 00:12:33,927 ♪ Now when we fight, we fight for bread ♪ 150 00:12:33,970 --> 00:12:36,712 ♪ Here is the thing about equality ♪ 151 00:12:36,756 --> 00:12:39,759 ♪ Everyone's equal when they're dead ♪ 152 00:12:39,802 --> 00:12:42,413 ♪ Take your place, take your chance ♪ 153 00:12:42,457 --> 00:12:45,286 ♪ Vive la France Vive la France! 154 00:12:45,329 --> 00:12:47,505 - ALL CHANT: Vive la France! 155 00:13:40,907 --> 00:13:42,604 WILLIAMS: What we see in the late 18th 156 00:13:42,647 --> 00:13:45,389 and early 19th centuries is the Industrial Revolution. 157 00:13:45,433 --> 00:13:48,784 It replaces the work of people's hands with machines, 158 00:13:48,828 --> 00:13:51,395 so you bring in machines to make wool, to make cotton, 159 00:13:51,439 --> 00:13:54,050 to make all kinds of commodities. 160 00:13:54,094 --> 00:13:57,358 This makes goods faster, it standardizes them, 161 00:13:57,401 --> 00:14:00,274 and this makes more profit. 162 00:14:00,317 --> 00:14:04,713 Capital's no longer this fixed thing that's your land 163 00:14:04,756 --> 00:14:08,412 or even your ability to lend money. 164 00:14:08,456 --> 00:14:13,678 You finally figure out that you can expand your own factory 165 00:14:13,722 --> 00:14:17,813 by, kind of, selling stuff, keeping the profits, 166 00:14:17,857 --> 00:14:21,904 then reinvesting those profits in expanding your factory. 167 00:14:21,948 --> 00:14:24,994 And that's kind of what capitalism in its modern form 168 00:14:25,038 --> 00:14:28,128 really lets us do -- is that capital becomes this thing 169 00:14:28,171 --> 00:14:31,131 that can, kind of, perpetually expand. 170 00:14:35,222 --> 00:14:38,834 But the gap between wages and productivity is substantial, 171 00:14:38,878 --> 00:14:41,793 and you have these kind of feudal legacies of labor 172 00:14:41,837 --> 00:14:45,145 persisting very, very late into the game. 173 00:14:45,188 --> 00:14:47,582 British master and servant law meant that it was a crime 174 00:14:47,625 --> 00:14:50,890 for you to quit your employer without permission. 175 00:14:53,022 --> 00:14:55,285 And, you know, this is getting actively used 176 00:14:55,329 --> 00:14:58,898 in the mid-19th century, during, like, the heyday of capitalism 177 00:14:58,941 --> 00:15:01,813 in England -- the most advanced country in the world -- 178 00:15:01,857 --> 00:15:03,946 and they're throwing workers in jail, 179 00:15:03,990 --> 00:15:05,948 and they're being beaten 180 00:15:05,992 --> 00:15:08,864 because it's a crime to go on strike. 181 00:15:36,718 --> 00:15:40,635 MAN: This whole idea developed around escaping the Old World 182 00:15:40,678 --> 00:15:45,205 and setting up a new, more egalitarian society. 183 00:15:45,248 --> 00:15:48,251 When the new world countries were being set up -- 184 00:15:48,295 --> 00:15:50,471 so New Zealand, Australia, Canada -- 185 00:15:50,514 --> 00:15:54,388 these places were being set up by these refugees, essentially, 186 00:15:54,431 --> 00:15:56,085 fleeing Europe 187 00:15:56,129 --> 00:15:59,784 at a time that capitalism was really taking hold. 188 00:16:01,482 --> 00:16:04,398 And that's why a lot of these people wanted to get out 189 00:16:04,441 --> 00:16:09,359 of these countries -- they wanted a flatter society. 190 00:16:09,403 --> 00:16:14,103 It was this idea of moving beyond the class system, 191 00:16:14,147 --> 00:16:17,019 but it was done largely in a laissez-faire way. 192 00:16:17,063 --> 00:16:21,197 It wasn't a political movement, by and large. 193 00:16:21,241 --> 00:16:24,287 And very quickly it was the wealthy that started dominating 194 00:16:24,331 --> 00:16:26,246 right from the start. 195 00:16:27,987 --> 00:16:30,641 NAIDU: If you're a white man in sort of, like, 1800-ish, 196 00:16:30,685 --> 00:16:32,339 Australia and the US -- 197 00:16:32,382 --> 00:16:36,038 these places are, like, the best places for you to go. 198 00:16:36,082 --> 00:16:39,520 You've got this wide-open frontier; it's filled with land. 199 00:16:39,563 --> 00:16:41,609 But the big constraint on your production 200 00:16:41,652 --> 00:16:44,786 is your ability to mobilize labor. 201 00:16:44,829 --> 00:16:46,918 So if you're a small family farmer, 202 00:16:46,962 --> 00:16:49,008 the only labor you can mobilize on to the frontier 203 00:16:49,051 --> 00:16:51,010 is your kids. 204 00:16:53,186 --> 00:16:56,058 But if you're a slave owner, you can basically go to New Orleans, 205 00:16:56,102 --> 00:16:58,234 you can take out a loan, use that loan 206 00:16:58,278 --> 00:17:01,933 to buy a bunch of slaves in the New Orleans slave market, 207 00:17:01,977 --> 00:17:04,893 then take them out to the Alabama frontier 208 00:17:04,936 --> 00:17:07,156 and start clearing land and growing cotton. 209 00:17:19,734 --> 00:17:22,998 And you're again able to take the profits from that 210 00:17:23,042 --> 00:17:26,219 and expand, buy more slaves, buy more land, 211 00:17:26,262 --> 00:17:29,091 and so you can again now think of the slave economy 212 00:17:29,135 --> 00:17:33,226 as participating in this circuit of accumulation. 213 00:17:37,534 --> 00:17:40,668 But also being a slave owner didn't just mean that you had 214 00:17:40,711 --> 00:17:43,323 access to the labor of your slaves, 215 00:17:43,366 --> 00:17:47,457 it also meant you had increased access to capital, 216 00:17:47,501 --> 00:17:51,200 because you can use your slaves as collateral. 217 00:17:58,164 --> 00:18:01,036 So if you, basically, are looking to lend to somebody 218 00:18:01,080 --> 00:18:03,865 and they can offer an equivalent amount of 219 00:18:03,908 --> 00:18:05,780 slave collateral versus land, 220 00:18:05,823 --> 00:18:07,347 you'd prefer the slave collateral 221 00:18:07,390 --> 00:18:10,524 because it's much easier to move them around 222 00:18:10,567 --> 00:18:13,135 or resell them or something like that. 223 00:19:05,100 --> 00:19:06,580 MAN: Attack! 224 00:19:53,801 --> 00:19:55,585 WILLIAMS: It's no good speeding up production 225 00:19:55,629 --> 00:19:58,501 if there's no one to buy the stuff. 226 00:19:58,545 --> 00:20:03,202 So fashion fuels the Industrial Revolution. 227 00:20:03,245 --> 00:20:06,770 By the 19th century, the cult of fashion is all-encompassing. 228 00:20:06,814 --> 00:20:08,990 It's come down even to the working classes. 229 00:20:09,033 --> 00:20:13,951 Even working class women are trying to stay in fashion. 230 00:20:13,995 --> 00:20:17,607 The idea that, "You can't wear that. That's from last season," 231 00:20:17,651 --> 00:20:20,915 that will be very strange to a 16th or 17th century person. 232 00:20:20,958 --> 00:20:23,047 They think, "Well, it's still working, 233 00:20:23,091 --> 00:20:27,226 it's still hard-wearing. I'll wear the same outfit." 234 00:20:32,970 --> 00:20:34,755 And the industry that accelerates the fastest 235 00:20:34,798 --> 00:20:37,627 in the 19th century is the industry about Christmas. 236 00:20:45,853 --> 00:20:47,637 In the 18th and 17th century, 237 00:20:47,681 --> 00:20:49,987 Christmas was a very low-key affair. 238 00:20:50,031 --> 00:20:52,903 It was usually about drinking with your friends and relations. 239 00:20:52,947 --> 00:20:55,036 It wasn't really about present-giving; 240 00:20:55,079 --> 00:20:58,605 that was perhaps in New Year. 241 00:20:58,648 --> 00:21:01,260 But by the mid-19th century, we have the Christmas cracker, 242 00:21:01,303 --> 00:21:03,218 the Christmas card, the Christmas tree. 243 00:21:03,262 --> 00:21:05,089 People are bankrupting themselves 244 00:21:05,133 --> 00:21:08,571 to have a yearly Christmas, and it really was seized upon 245 00:21:08,615 --> 00:21:12,532 by the manufacturers as a way to make a huge amount of money. 246 00:21:16,231 --> 00:21:18,146 NAIDU: Just as you were getting all these new technologies 247 00:21:18,189 --> 00:21:21,367 like the railroad and the telegraph and mass production 248 00:21:21,410 --> 00:21:23,499 and the corporation -- all of these new innovations, 249 00:21:23,543 --> 00:21:24,935 all of this additional production -- 250 00:21:24,979 --> 00:21:28,243 and inequality becomes very, very large. 251 00:21:30,201 --> 00:21:32,595 It's actually this period of enormous conflicts, 252 00:21:32,639 --> 00:21:36,469 where you have open wars in the mines in Colorado 253 00:21:36,512 --> 00:21:41,212 between strikers and armed militia hired by capitalists. 254 00:21:45,391 --> 00:21:49,177 And the overwhelming use of the US Federal Army 255 00:21:49,220 --> 00:21:52,354 in this period is strike-breaking. 256 00:22:19,425 --> 00:22:22,689 And similarly, today, we have this whole 257 00:22:22,732 --> 00:22:24,778 transformation of the economy happening, 258 00:22:26,432 --> 00:22:28,825 both with trade and with technology, 259 00:22:28,869 --> 00:22:31,393 that exactly have the sort of same property of 260 00:22:31,437 --> 00:22:33,830 creating lots of monopolies. 261 00:22:38,357 --> 00:22:40,010 And so it's generating, again, 262 00:22:40,054 --> 00:22:42,796 a small class of very, very wealthy people. 263 00:22:42,839 --> 00:22:43,971 - 22... - 43 million. 264 00:22:44,014 --> 00:22:45,407 - 75 million. 265 00:22:45,451 --> 00:22:48,105 $107 million. Sold. 266 00:24:05,444 --> 00:24:07,837 ARCHIVE: In Berlin, the Germans know the hour 267 00:24:07,881 --> 00:24:10,187 of glory is at hand. 268 00:24:12,059 --> 00:24:14,496 NAIDU: There's like a cultural militarism that's happening 269 00:24:14,540 --> 00:24:17,325 on the Continent, and they're competing with each other 270 00:24:17,368 --> 00:24:20,676 over both imperial territory and trade routes. 271 00:24:20,720 --> 00:24:23,287 ARCHIVE: The warlord is ceaseless, indefatigable, 272 00:24:23,331 --> 00:24:26,421 as he makes the rounds of his armies. 273 00:24:26,465 --> 00:24:28,684 WILLIAMS: The British Empire was so powerful; 274 00:24:28,728 --> 00:24:30,425 they had a quarter of the world's population. 275 00:24:30,469 --> 00:24:32,514 The other countries wanted a piece of the cake. 276 00:24:32,558 --> 00:24:36,562 And Germany, in particular, wanted a piece of the cake. 277 00:24:38,955 --> 00:24:41,567 NAIDU: A lot of these new capitalists 278 00:24:41,610 --> 00:24:44,700 are still, kind of, basically feudal in their outlook. 279 00:24:44,744 --> 00:24:47,921 So particularly in Germany, you have these Junkers 280 00:24:47,964 --> 00:24:49,749 that are these big industrialists, 281 00:24:49,792 --> 00:24:51,707 but they also think there's nothing better for society 282 00:24:51,751 --> 00:24:52,969 than a good fight. 283 00:25:01,630 --> 00:25:04,198 WILLIAMS: Britain and the Allied powers take on Germany 284 00:25:04,241 --> 00:25:07,506 in what they think is going to be a short, sharp shock 285 00:25:07,549 --> 00:25:09,072 over in a few months' time. 286 00:25:22,042 --> 00:25:26,437 Instead, it goes on for years and decimates both populations. 287 00:25:41,714 --> 00:25:45,544 World War I is, at its base, a fight over capital. 288 00:25:47,589 --> 00:25:51,506 And we see this massive post-war economic crash. 289 00:25:53,726 --> 00:25:56,424 So, you have this new idea after World War I, 290 00:25:56,467 --> 00:25:59,383 basically born out of the fact that the government is bankrupt, 291 00:25:59,427 --> 00:26:02,909 that tax is not bad, that it actually could be good. 292 00:26:02,952 --> 00:26:04,563 And the only way you're going to get money 293 00:26:04,606 --> 00:26:06,826 is by taxing the aristocracy. 294 00:26:09,306 --> 00:26:11,744 There is nothing in the working class and the middle class 295 00:26:11,787 --> 00:26:13,746 left to tax. 296 00:26:13,789 --> 00:26:17,445 So you see the beginning of the drop in aristocratic power. 297 00:26:19,099 --> 00:26:22,493 And also what you see in the '20s is the growth of the power 298 00:26:22,537 --> 00:26:24,974 of women and also of the working classes -- 299 00:26:25,018 --> 00:26:27,324 both of them, essentially, are saying to the government, 300 00:26:27,368 --> 00:26:29,936 "Look, we worked really hard for you in this war. 301 00:26:29,979 --> 00:26:32,895 We sacrificed. You need to give us something back." 302 00:26:32,939 --> 00:26:36,333 So suddenly the whole principle that the working classes 303 00:26:36,377 --> 00:26:39,989 and women must sit there and put up with the way that society is, 304 00:26:40,033 --> 00:26:42,383 is completely overturned in the '20s. 305 00:26:45,038 --> 00:26:46,866 ARCHIVE: All of the crowds of the Empire City, 306 00:26:46,909 --> 00:26:49,172 the wonder city, the windy city, the passion city, 307 00:26:49,216 --> 00:26:50,652 the people, yes. 308 00:26:54,003 --> 00:26:58,007 ♪ Gone are my blues, and gone are my tears ♪ 309 00:26:58,051 --> 00:27:02,098 ♪ I've got good news to shout in your ears ♪ 310 00:27:02,142 --> 00:27:05,711 ♪ The long-lost dollar has come back to the fold ♪ 311 00:27:05,754 --> 00:27:09,018 ♪ With silver, you can turn your dreams to gold! ♪ 312 00:27:09,062 --> 00:27:11,064 ♪ Oh, we're in the money 313 00:27:12,108 --> 00:27:13,849 ♪ We're in the money 314 00:27:13,893 --> 00:27:18,680 ♪ Let's lend it, spend it, send it rolling around ♪ 315 00:27:18,724 --> 00:27:20,421 ARCHIVE: All of the crowd get the big money -- 316 00:27:20,464 --> 00:27:22,945 2 million, 5 million -- make a pile and raise a pile. 317 00:27:22,989 --> 00:27:25,513 WOMAN: The '20s was maybe irrational exuberance. 318 00:27:25,556 --> 00:27:27,646 ARCHIVE: Watch us grow! What am I bid? Going up! 319 00:27:27,689 --> 00:27:29,473 WOMAN: There was a boom in stock prices, 320 00:27:29,517 --> 00:27:32,955 but people kept bidding into the stock market, 321 00:27:32,999 --> 00:27:36,829 because people always think there's magic in Wall Street. 322 00:27:36,872 --> 00:27:39,788 You know, we have a mythology in this country, in particular, 323 00:27:39,832 --> 00:27:42,399 that what's good for Wall Street is good for Main Street, 324 00:27:42,443 --> 00:27:44,750 but that's really never been true. 325 00:27:44,793 --> 00:27:47,840 ♪ We're in the money, I'll say we're in the money ♪ 326 00:27:47,883 --> 00:27:51,757 ♪ We've got a lot of what it takes to get along ♪♪ 327 00:27:51,800 --> 00:27:55,325 A lot of banks were selling products that they knew 328 00:27:55,369 --> 00:27:58,154 were absolutely no good. 329 00:27:58,198 --> 00:28:02,855 There were dodgy bankers doing dodgy deals knowingly. 330 00:28:02,898 --> 00:28:04,944 There weren't a lot of regulations in place. 331 00:28:04,987 --> 00:28:08,034 It was a real free-for-all of capital. 332 00:28:09,775 --> 00:28:11,820 MAN: The bubble of the 1920s 333 00:28:11,864 --> 00:28:14,605 was characteristic of many other bubbles -- 334 00:28:14,649 --> 00:28:16,782 a kind of euphoria that happens. 335 00:28:16,825 --> 00:28:19,567 Stocks go up, you can borrow against that stock. 336 00:28:19,610 --> 00:28:21,351 You use that money to buy more stock, 337 00:28:21,395 --> 00:28:26,095 the price goes up even more, and everybody's feeling giddy. 338 00:28:32,841 --> 00:28:34,800 FOROOHAR: At the same time, you've got tremendous 339 00:28:34,843 --> 00:28:37,628 dislocation going on in the job market -- 340 00:28:37,672 --> 00:28:39,195 a lot of people getting very rich, 341 00:28:39,239 --> 00:28:41,023 but a lot of workers at the bottom, 342 00:28:41,067 --> 00:28:43,243 not enough in the middle. 343 00:28:43,286 --> 00:28:48,335 Credit was then being offered to kind of paper over that divide. 344 00:28:53,644 --> 00:28:57,431 STIGLITZ: That credit cycle fed this bubble, 345 00:28:57,474 --> 00:29:00,390 and like every other bubble, 346 00:29:00,434 --> 00:29:01,609 it broke. 347 00:29:03,567 --> 00:29:04,960 FOROOHAR: This time around, 348 00:29:05,004 --> 00:29:08,442 a number of bankers actually went to jail, 349 00:29:08,485 --> 00:29:11,010 and there really were some regulatory changes, you know, 350 00:29:11,053 --> 00:29:13,708 like, in particular the Glass-Steagall Depression-era 351 00:29:13,752 --> 00:29:15,754 legislation that actually fixed the banking system 352 00:29:15,797 --> 00:29:19,845 and made it safer -- until it was overturned in 1989. 353 00:29:30,856 --> 00:29:34,033 After the financial crash, countries all around the world 354 00:29:34,076 --> 00:29:36,818 also ended up getting in a trade war. 355 00:29:36,862 --> 00:29:38,385 There were tariffs that were imposed, 356 00:29:38,428 --> 00:29:40,343 and that created a snowball cycle, 357 00:29:40,387 --> 00:29:42,824 which led to more pain globally, 358 00:29:44,434 --> 00:29:48,351 and that helped to provoke the Great Depression. 359 00:30:02,365 --> 00:30:03,758 They told me to tell you to get off, 360 00:30:03,802 --> 00:30:05,238 and that's what I'm telling ya. 361 00:30:05,281 --> 00:30:07,196 You mean get off of my own land? 362 00:30:07,240 --> 00:30:09,329 Don't go to blaming me, it ain't my fault. 363 00:30:09,372 --> 00:30:10,591 Whose fault is it? 364 00:30:10,634 --> 00:30:11,897 You know who owns the land -- 365 00:30:11,940 --> 00:30:14,029 the Shawnee Land and Cattle Company. 366 00:30:14,073 --> 00:30:15,944 And who's the Shawnee Land and Cattle Company? 367 00:30:15,988 --> 00:30:17,903 It ain't nobody! It's a company. 368 00:30:17,946 --> 00:30:19,730 They got a president, ain't they? 369 00:30:19,774 --> 00:30:22,168 They got somebody knows what a shotgun's for, ain't they?! 370 00:30:22,211 --> 00:30:23,256 What's the use of pickin' on him? 371 00:30:23,299 --> 00:30:25,040 He ain't nothin' but the manager. 372 00:30:25,084 --> 00:30:26,955 And he's half crazy hisself tryin' to keep up 373 00:30:26,999 --> 00:30:28,391 with his orders from the East. 374 00:30:28,435 --> 00:30:31,699 - Then who do we shoot? - Brother, I don't know. 375 00:30:31,742 --> 00:30:33,440 - If I did, I'd tell ya. 376 00:30:33,483 --> 00:30:35,485 I just don't know who's to blame. 377 00:30:35,529 --> 00:30:37,836 I'm right here to tell you, mister, there ain't nobody 378 00:30:37,879 --> 00:30:39,838 gonna push me off my land! 379 00:30:39,881 --> 00:30:43,319 My grandpa took up this land 70 years ago. 380 00:30:43,363 --> 00:30:46,583 My pa was born here. We was all born on it! 381 00:30:46,627 --> 00:30:48,977 And some of us was killed on it! 382 00:32:33,690 --> 00:32:37,477 MAN: The pain in the United States had become so great, 383 00:32:37,520 --> 00:32:43,004 so grave -- absolute poverty -- and as a consequence of that, 384 00:32:43,048 --> 00:32:45,833 the willingness to make political solutions 385 00:32:45,876 --> 00:32:48,488 that were severe. 386 00:32:48,531 --> 00:32:53,101 ROOSEVELT: This nation is asking for action and action now. 387 00:32:54,885 --> 00:32:58,411 BREMMER: Price-fixing, massive change in labor rates -- 388 00:32:58,454 --> 00:33:01,153 all of these things under FDR 389 00:33:01,196 --> 00:33:04,460 was something that Americans hadn't seen before, 390 00:33:04,504 --> 00:33:07,550 and absolutely that led to massive infrastructure build 391 00:33:07,594 --> 00:33:10,423 and it led to extraordinary redistribution. 392 00:33:11,902 --> 00:33:14,035 The existence of a communist alternative 393 00:33:14,079 --> 00:33:18,605 scared the capitalist world into thinking that if it didn't 394 00:33:18,648 --> 00:33:21,912 at least address some of the basic inequality issues, 395 00:33:21,956 --> 00:33:24,828 that they would lose the battle for ideas. 396 00:33:30,921 --> 00:33:33,533 In the New Deal itself, Roosevelt actually borrowed 397 00:33:33,576 --> 00:33:37,058 some ideas -- the heavy state involvement in the economy; 398 00:33:37,102 --> 00:33:39,060 heavy regulation. 399 00:33:41,323 --> 00:33:44,979 There was a clear recognition that unless the state tried to 400 00:33:45,023 --> 00:33:46,763 do something about jobs 401 00:33:46,807 --> 00:33:50,985 and do enough redistribution to keep people from starving, 402 00:33:51,029 --> 00:33:54,510 that you wouldn't have basic social stability. 403 00:34:18,621 --> 00:34:20,797 WILLIAMS: The Wall Street crash creates poverty in America, 404 00:34:20,841 --> 00:34:22,147 it creates poverty in Britain, 405 00:34:22,190 --> 00:34:24,105 but it has a massive effect on Germany, 406 00:34:24,149 --> 00:34:28,196 because Germany is already poor. After World War I, 407 00:34:28,240 --> 00:34:30,851 they were given these very punitive reparations -- 408 00:34:30,894 --> 00:34:33,810 they had to give huge amounts of money to the other countries. 409 00:34:33,854 --> 00:34:36,291 And what you have is this horrific inflation 410 00:34:36,335 --> 00:34:37,684 in the Weimar Republic -- 411 00:34:37,727 --> 00:34:39,642 Germany as it was known in the 1920s -- 412 00:34:39,686 --> 00:34:41,383 in which, basically, at one point, 413 00:34:41,427 --> 00:34:46,040 a whole barrel of banknotes cannot buy you a loaf of bread. 414 00:34:49,174 --> 00:34:52,264 We can absolutely link, as tight as that, the rise of fascism 415 00:34:52,307 --> 00:34:55,745 in Europe in the 1930s and extreme poverty. 416 00:35:12,936 --> 00:35:14,895 And you can see how seductive it is 417 00:35:14,938 --> 00:35:17,419 when someone like Adolf Hitler comes up and says, 418 00:35:17,463 --> 00:35:20,944 "I'll make Germany great again. We'll be powerful again." 419 00:35:20,988 --> 00:35:22,990 And really what he's saying is, 420 00:35:23,033 --> 00:35:26,036 "The reason why we're so poor in Germany is because of Britain, 421 00:35:26,080 --> 00:35:30,650 is because of America, is because of the rest of Europe." 422 00:35:42,923 --> 00:35:46,144 These downtrodden people were so open, so vulnerable 423 00:35:46,187 --> 00:35:49,059 to the rise of fascism and the call of racism, 424 00:35:49,103 --> 00:35:50,496 the call of exclusionism 425 00:35:50,539 --> 00:35:53,629 and the call of invading other countries. 426 00:36:21,353 --> 00:36:26,053 ARCHIVE: One American airplane factory -- one of many. 427 00:36:26,096 --> 00:36:28,969 One bomber -- thousands on the way -- 428 00:36:30,449 --> 00:36:32,886 an angel of death. 429 00:36:32,929 --> 00:36:35,410 NAIDU: What really gets rid of the Depression is transforming 430 00:36:35,454 --> 00:36:37,369 the economy into World War II. 431 00:36:37,412 --> 00:36:39,936 And the scale of this is just something that humanity 432 00:36:39,980 --> 00:36:41,895 had never seen before. 433 00:36:44,724 --> 00:36:46,856 The governments of all the societies involved 434 00:36:46,900 --> 00:36:49,119 just kind of take over production, 435 00:36:49,163 --> 00:36:50,817 and this is an industrial war, 436 00:36:50,860 --> 00:36:54,124 so production is, kind of, the terms under which, 437 00:36:54,168 --> 00:36:57,258 in the long run, this will be won or lost. 438 00:37:03,917 --> 00:37:06,746 The labor movement got a lot of political power. 439 00:37:06,789 --> 00:37:08,574 Like, if you're producing for the war, 440 00:37:08,617 --> 00:37:13,405 you have to automatically recognize a union. 441 00:37:13,448 --> 00:37:15,798 And then just also raising the money to pay for that 442 00:37:15,842 --> 00:37:18,236 just involved raising taxes. 443 00:37:19,541 --> 00:37:22,588 This period was the last gasp of feudalism, 444 00:37:22,631 --> 00:37:25,678 and it took this to finally purge the influence 445 00:37:25,721 --> 00:37:29,159 of the aristocracy in advanced countries. 446 00:39:53,216 --> 00:39:56,176 ♪ Oh, give me land, lots of land ♪ 447 00:39:56,219 --> 00:39:58,874 ♪ Under starry skies above 448 00:39:58,918 --> 00:40:02,138 ♪ Don't fence me in 449 00:40:02,182 --> 00:40:05,403 ♪ Let me ride through the wide open country... ♪ 450 00:40:19,721 --> 00:40:24,422 ♪ Let me be my myself in the evening breeze ♪ 451 00:40:24,465 --> 00:40:28,382 ♪ Listen to the murmur of the cottonwood trees... ♪ 452 00:40:41,482 --> 00:40:50,796 ♪ Don't fence me in ♪ 453 00:40:54,277 --> 00:40:56,932 The social landscape is completely different 454 00:40:56,976 --> 00:40:58,673 in the aftermath of World War II. 455 00:40:58,717 --> 00:41:02,242 You see the biggest shift in attitudes that you ever see. 456 00:41:02,285 --> 00:41:04,636 Bit different from what it used to be, 457 00:41:04,679 --> 00:41:06,159 I can tell ya. 458 00:41:08,640 --> 00:41:11,512 ARCHIVE: There will be sickness and unemployment benefits, 459 00:41:11,556 --> 00:41:14,123 retirement pensions, industrial injuries benefits, 460 00:41:14,167 --> 00:41:16,909 guardians allowances, widows' benefits, maternity grants. 461 00:41:16,952 --> 00:41:19,477 WILLIAMS: It's a move towards creating a benefit system. 462 00:41:19,520 --> 00:41:21,957 We have the idea of sickness pay, holiday pay. 463 00:41:22,001 --> 00:41:24,177 In Britain they created the National Health Service -- 464 00:41:24,220 --> 00:41:26,875 free service from cradle to grave. 465 00:41:34,709 --> 00:41:37,277 It's a move towards nationalization of industry, 466 00:41:37,320 --> 00:41:39,366 it's a move towards taxation of inheritance, 467 00:41:39,409 --> 00:41:41,324 taxation of property and wealth. 468 00:41:41,368 --> 00:41:44,110 I'm telling you, it works out fine. 469 00:41:44,153 --> 00:41:46,025 ARCHIVE: Television, with its promise of endless hours 470 00:41:46,068 --> 00:41:50,290 of enjoyment, entertainment, was part of the peacetime green. 471 00:41:50,333 --> 00:41:53,859 Television -- an unparalleled blending of private incentive 472 00:41:53,902 --> 00:41:56,514 and public service. 473 00:41:56,557 --> 00:41:57,863 WILLIAMS: In America in the '50s, 474 00:41:57,906 --> 00:41:59,604 you see capital restrained also. 475 00:41:59,647 --> 00:42:01,910 You have rent controls on apartments, 476 00:42:01,954 --> 00:42:03,738 you have limits on landowners. 477 00:42:03,782 --> 00:42:06,567 Capital can't just roam free, it can't just increase itself. 478 00:42:06,611 --> 00:42:09,788 Capital must be harnessed like some wild horse. 479 00:42:09,831 --> 00:42:12,399 TV: This is the land of the thoroughbred. 480 00:42:12,442 --> 00:42:15,315 WILLIAMS: There is a very clear vision that capital needs to be 481 00:42:15,358 --> 00:42:17,970 helping the people, that actually the whole principle 482 00:42:18,013 --> 00:42:20,538 in which the rich do whatever they want with their capital 483 00:42:20,581 --> 00:42:22,104 and that's good for the nation, 484 00:42:22,148 --> 00:42:24,585 well, that's being challenged across the world. 485 00:42:24,629 --> 00:42:27,240 ♪ I wish I had a castle in the sky ♪ 486 00:42:28,937 --> 00:42:32,767 ♪ A way up high where bluebirds like to fly ♪ 487 00:42:32,811 --> 00:42:36,379 The new vision is that the '50s is going to be the age in which 488 00:42:36,423 --> 00:42:37,859 everyone can have wealth. 489 00:42:37,903 --> 00:42:39,905 ♪ ...with a hundred rooms or more... ♪ 490 00:42:39,948 --> 00:42:41,515 ...some day... 491 00:42:41,559 --> 00:42:44,605 ♪ With stars for windows, clouds for rugs ♪ 492 00:42:44,649 --> 00:42:46,868 ♪ A rainbow for a door ♪ 493 00:42:46,912 --> 00:42:49,871 People who are born just after World War II 494 00:42:49,915 --> 00:42:53,440 had a life that no child before them could ever imagine. 495 00:42:53,483 --> 00:42:56,008 WOMAN: I just wish I had a decent kitchen. 496 00:43:00,055 --> 00:43:01,448 WILLIAMS: For the first time, 497 00:43:01,491 --> 00:43:04,407 hard work and study can get you to the top. 498 00:43:08,063 --> 00:43:09,935 - Hello, Mrs. Thatcher. - Nice to see you. 499 00:43:09,978 --> 00:43:12,938 - Have a seat. 500 00:43:14,853 --> 00:43:18,030 My father left school at 12 or 13, 501 00:43:18,073 --> 00:43:19,814 and didn't have some of the chances 502 00:43:19,858 --> 00:43:22,600 that you and I have to go on to college. 503 00:43:22,643 --> 00:43:24,993 And I think you'll find when you're a parent, 504 00:43:25,037 --> 00:43:28,475 what you're always trying to do is to give your children 505 00:43:28,518 --> 00:43:30,912 the sort of chances you didn't have. 506 00:43:30,956 --> 00:43:33,654 Would you like to see a woman prime minister? 507 00:43:33,698 --> 00:43:36,265 I think it depends upon who the person is. 508 00:43:36,309 --> 00:43:39,268 I don't think that there will be a woman prime minister 509 00:43:39,312 --> 00:43:40,966 in my lifetime. 510 00:43:42,620 --> 00:43:44,317 WILLIAMS: What you see in Margaret Thatcher's life 511 00:43:44,360 --> 00:43:46,885 is incredible social mobility. 512 00:43:46,928 --> 00:43:49,017 An ordinary shopkeeper's daughter from the North, 513 00:43:49,061 --> 00:43:51,672 she went to grammar school, she went to Oxford, 514 00:43:51,716 --> 00:43:53,674 and became the first female prime minister, 515 00:43:53,718 --> 00:43:54,980 and, of course, wealthy. 516 00:43:55,023 --> 00:43:57,678 And that is simply through this new society 517 00:43:57,722 --> 00:44:01,639 in which social mobility was actually possible. 518 00:44:01,682 --> 00:44:04,816 And what you have is this real surge of the middle classes 519 00:44:04,859 --> 00:44:07,470 and the lower middle classes into positions of power. 520 00:45:02,003 --> 00:45:03,613 And we'll have the kitchen right here, 521 00:45:03,657 --> 00:45:05,964 so we can see the children playing in the yard. 522 00:45:06,007 --> 00:45:08,096 Children?! How many you planning on? 523 00:45:08,140 --> 00:45:10,142 Not more than six, I hope. 524 00:46:23,737 --> 00:46:26,174 FUKUYAMA: The decades immediately after World War II 525 00:46:26,218 --> 00:46:28,220 were quite remarkable. 526 00:46:29,569 --> 00:46:32,180 There was a high degree of social consensus 527 00:46:32,224 --> 00:46:35,923 that really sprang out of the whole war effort. 528 00:46:37,620 --> 00:46:40,710 It was so-- You had a solidarity, 529 00:46:40,754 --> 00:46:44,714 but it was on the basis of a pretty stratified society. 530 00:46:46,281 --> 00:46:48,283 There were other forms of inequality that existed 531 00:46:48,327 --> 00:46:50,024 in that period. 532 00:46:50,068 --> 00:46:52,461 But that began to change after the civil rights movement 533 00:46:52,505 --> 00:46:55,987 in the 1960s and then all of the other social movements 534 00:46:56,030 --> 00:46:57,902 that occurred thereafter. 535 00:46:57,945 --> 00:46:59,947 - ♪ You better think - ♪ Think! 536 00:46:59,991 --> 00:47:01,862 ♪ Think about what you're trying to do to me ♪ 537 00:47:01,906 --> 00:47:05,170 The negro still is not free. 538 00:47:05,213 --> 00:47:06,780 ♪ ...let yourself be free 539 00:47:06,824 --> 00:47:09,087 - ♪ Oh, freedom - ♪ Freedom! 540 00:47:09,130 --> 00:47:11,132 - ♪ Some freedom - ♪ Freedom! 541 00:47:11,176 --> 00:47:13,047 ♪ Oh, freedom 542 00:47:13,091 --> 00:47:15,658 ♪ Yeah, freedom! 543 00:47:15,702 --> 00:47:17,704 FUKUYAMA: I think that, politically, 544 00:47:17,747 --> 00:47:20,968 having a broad middle class is quite important. 545 00:47:21,012 --> 00:47:22,970 It's part of what's called modernization 546 00:47:23,014 --> 00:47:25,059 through this idea that as your income rises, 547 00:47:25,103 --> 00:47:28,497 you develop a middle class that are better educated, 548 00:47:28,541 --> 00:47:32,762 and therefore they will demand a higher level of participation. 549 00:47:32,806 --> 00:47:35,461 - ♪ Oh, freedom - ♪ Freedom! 550 00:47:35,504 --> 00:47:37,289 - ♪ Some freedom - ♪ Freedom! 551 00:47:37,332 --> 00:47:40,596 ♪ Oh, freedom! Yeah, freedom! ♪ 552 00:47:40,640 --> 00:47:43,121 WOMEN CHANT: We have been victims for so long. 553 00:47:43,164 --> 00:47:45,210 - ♪ Freedom - ♪ Oh, freedom 554 00:47:45,253 --> 00:47:48,126 - ♪ Freedom - ♪ Give me some freedom 555 00:47:48,169 --> 00:47:51,216 ♪ Oh, freedom! 556 00:47:51,259 --> 00:47:54,480 - ♪ Whoo! To the ball, baby - ♪ To the ball ♪ 557 00:47:55,960 --> 00:47:59,224 Then that kind of all unravels in the '70s. 558 00:47:59,267 --> 00:48:03,054 ANCHOR: This is NBC Nightly News, Wednesday October 17th. 559 00:48:03,097 --> 00:48:05,839 Good evening. The Middle East war produced developments 560 00:48:05,883 --> 00:48:07,754 all over the world today. 561 00:48:07,797 --> 00:48:10,278 The oil-producing countries of the Arab world 562 00:48:10,322 --> 00:48:13,194 decided to use their oil as a political weapon. 563 00:48:13,238 --> 00:48:14,979 REPORTER: There was an announcement in Kuwait 564 00:48:15,022 --> 00:48:17,285 that prices for Arab oil were going up -- 565 00:48:17,329 --> 00:48:20,375 a huge increase voted in an overnight meeting 566 00:48:20,419 --> 00:48:23,988 until Israeli forces leave occupied Arab land. 567 00:48:28,862 --> 00:48:32,344 NAIDU: This oil shock hits all of the advanced economies, 568 00:48:32,387 --> 00:48:34,999 and oil was an input into everything. 569 00:48:36,696 --> 00:48:38,916 REPORTER: It was announced today that gasless Sundays 570 00:48:38,959 --> 00:48:41,919 will go into effect as of next month. 571 00:48:41,962 --> 00:48:43,572 REPORTER: The price of foreign oil 572 00:48:43,616 --> 00:48:46,140 had jumped from $3 to $12 a barrel. 573 00:48:47,925 --> 00:48:51,667 NAIDU: Quadrupling the price of oil translated into this period 574 00:48:51,711 --> 00:48:54,279 where, like, prices started to increase 575 00:48:54,322 --> 00:48:57,456 and wages weren't keeping pace, 576 00:48:57,499 --> 00:48:59,893 but then unions and workers started demanding 577 00:48:59,937 --> 00:49:03,157 even higher wages to keep pace with prices, 578 00:49:03,201 --> 00:49:05,594 and then what firms would do is then increase prices 579 00:49:05,638 --> 00:49:08,902 even further to pass on the effects of wages, 580 00:49:08,946 --> 00:49:12,645 and so you got what's called a wage-price spiral. 581 00:49:12,688 --> 00:49:16,997 And so you had this period of high inflation and low growth, 582 00:49:17,041 --> 00:49:20,305 so that's why it got called stagflation. 583 00:49:28,748 --> 00:49:30,880 FOROOHAR: Globalization is starting to happen. 584 00:49:30,924 --> 00:49:34,188 The emerging markets are coming online in the world. 585 00:49:34,232 --> 00:49:35,755 Europe is back on its feet, 586 00:49:35,798 --> 00:49:37,757 Germany is becoming a producer again, 587 00:49:37,800 --> 00:49:40,412 a number of European nations are becoming more competitive. 588 00:49:44,677 --> 00:49:46,331 FOROOHAR: The global picture is changing. 589 00:49:46,374 --> 00:49:48,594 American capital suddenly doesn't have 590 00:49:48,637 --> 00:49:50,117 the world to itself anymore. 591 00:49:50,161 --> 00:49:52,293 ♪ Tumble outta bed and I stumble to the kitchen ♪ 592 00:49:52,337 --> 00:49:54,730 ♪ Pour myself a cup of ambition... ♪ 593 00:49:54,774 --> 00:49:57,081 FOROOHAR: But another thing that's happening in the 1970s 594 00:49:57,124 --> 00:50:00,736 is you see a very kind of siloed, financialized 595 00:50:00,780 --> 00:50:03,870 way of thinking about how to run a corporate balance sheet -- 596 00:50:03,913 --> 00:50:06,133 cut costs, marshal your capital, 597 00:50:06,177 --> 00:50:08,701 treat labor as a cost, not an asset. 598 00:50:08,744 --> 00:50:10,964 ♪ Working 9 to 5 599 00:50:11,008 --> 00:50:13,445 ♪ What a way to make a living 600 00:50:13,488 --> 00:50:15,577 ♪ Barely gettin' by 601 00:50:15,621 --> 00:50:17,971 ♪ It's all takin' and no givin' ♪ 602 00:50:18,015 --> 00:50:19,973 ♪ They just use your mind 603 00:50:20,017 --> 00:50:22,323 ♪ And you never get the credit 604 00:50:22,367 --> 00:50:26,414 ♪ It's enough to drive you crazy if you let it ♪ 605 00:50:26,458 --> 00:50:28,503 FOROOHAR: Companies are not investing in their workers, 606 00:50:28,547 --> 00:50:29,983 they're not raising wages, 607 00:50:30,027 --> 00:50:32,203 so you start to really get that big 'X' 608 00:50:32,246 --> 00:50:36,120 where Wall Street's going here, Main Street's going down here. 609 00:50:36,163 --> 00:50:38,513 ♪ It's a rich man's game 610 00:50:38,557 --> 00:50:40,515 ♪ No matter what they call it 611 00:50:40,559 --> 00:50:45,564 ♪ And you spend your life puttin' money in his wallet ♪ 612 00:50:45,607 --> 00:50:47,000 ♪ 9 to 5... ♪ 613 00:50:50,177 --> 00:50:52,614 FOROOHAR: Germany and Japan took a different model -- 614 00:50:52,658 --> 00:50:55,095 a model in which workers sat on the boards of companies, 615 00:50:55,139 --> 00:50:57,358 had more of a say. 616 00:50:57,402 --> 00:50:59,665 This actually gave them a big advantage. 617 00:50:59,708 --> 00:51:01,319 They were able to use that expertise 618 00:51:01,362 --> 00:51:02,798 and increase their efficiency, 619 00:51:02,842 --> 00:51:05,540 and eventually gain market share from US companies. 620 00:51:07,238 --> 00:51:10,806 ARCHIVE: When it started, America was unprepared. 621 00:51:10,850 --> 00:51:12,808 From across the ocean, they came -- 622 00:51:12,852 --> 00:51:17,335 little cars determined to change the buying habits of a nation. 623 00:51:17,378 --> 00:51:20,164 It's a great-looking car. What do you call it? 624 00:51:20,207 --> 00:51:22,470 - Isuzu. - Gesundheit. 625 00:51:22,514 --> 00:51:24,472 Road-hugging, heart-pounding, 626 00:51:24,516 --> 00:51:26,605 hood-soaring, deck-sloping... 627 00:51:26,648 --> 00:51:28,998 ♪ We are... 628 00:51:29,042 --> 00:51:31,871 ♪ Cadillacs drive Subaru 629 00:51:31,914 --> 00:51:34,091 MAN: Reagan for president. 630 00:51:35,483 --> 00:51:37,920 Japanese production of automobiles is almost 631 00:51:37,964 --> 00:51:41,881 twice as great per worker as it is in America. 632 00:51:41,924 --> 00:51:44,275 We were once the greatest producer of automobiles, 633 00:51:44,318 --> 00:51:48,061 producing more than all the rest of the world combined. 634 00:51:48,105 --> 00:51:49,802 That is no longer true. 635 00:52:06,123 --> 00:52:08,647 - Thank you very much. 636 00:52:10,779 --> 00:52:14,043 Can anyone look at our reduced standing in the world today 637 00:52:14,087 --> 00:52:17,438 and say, "Let's have four more years of this"? 638 00:52:17,482 --> 00:52:20,267 CROWD: No! 639 00:52:20,311 --> 00:52:23,662 For those who've abandoned hope, we'll restore hope 640 00:52:23,705 --> 00:52:26,317 and we'll welcome them into a great national crusade 641 00:52:26,360 --> 00:52:30,669 - to make America great again. 642 00:53:12,885 --> 00:53:15,235 BRITISH REPORTER: Here comes the Prime Ministerial Rover, 643 00:53:15,279 --> 00:53:17,324 bearing now Mrs. Thatcher. 644 00:53:17,368 --> 00:53:19,065 AMERICAN REPORTER: Enter Margaret Thatcher, 645 00:53:19,108 --> 00:53:22,199 a grocer's daughter educated among the privileged classes 646 00:53:22,242 --> 00:53:23,504 at Oxford University. 647 00:53:26,115 --> 00:53:29,249 There is now work to be done. 648 00:53:29,293 --> 00:53:31,599 In deciding that, actually, what we need to do 649 00:53:31,643 --> 00:53:36,125 is increase the value of assets in order to increase investment, 650 00:53:36,169 --> 00:53:38,650 some of the thinking behind what would happen 651 00:53:38,693 --> 00:53:42,001 when you let capital free, 652 00:53:42,044 --> 00:53:45,091 you had to suppress the power of labor. 653 00:53:49,051 --> 00:53:52,272 REPORTER: This 12-foot-high pile is part of two weeks' rubbish 654 00:53:52,316 --> 00:53:54,535 piled outside the local refuse depot. 655 00:53:54,579 --> 00:53:55,928 Like others in Central London, 656 00:53:55,971 --> 00:53:57,669 it's been closed now for two weeks 657 00:53:57,712 --> 00:53:59,453 because of the dustmen's indefinite strike. 658 00:53:59,497 --> 00:54:01,455 REPORTER: The teachers' union are today putting forward 659 00:54:01,499 --> 00:54:04,893 a pay claim. 33,000 school children are out of school 660 00:54:04,937 --> 00:54:07,244 in the worst-affected London borough of Haringey. 661 00:54:07,287 --> 00:54:08,506 REPORTER: Cancelled operations 662 00:54:08,549 --> 00:54:10,595 meant empty beds up on the wards, 663 00:54:10,638 --> 00:54:12,988 which would otherwise have been used. 664 00:54:13,032 --> 00:54:14,816 SHAHEEN: You have to remember, at those times, 665 00:54:14,860 --> 00:54:19,038 there were issues about strikes; the public were upset about 666 00:54:19,081 --> 00:54:23,042 the way some labor unions were acting in that time. 667 00:54:23,085 --> 00:54:25,566 I'm going to boil everything because the sewage men, 668 00:54:25,610 --> 00:54:28,134 I understand, are still on strike, 669 00:54:28,177 --> 00:54:32,094 and so it'll be polluted, so you can get typhoid, 670 00:54:32,138 --> 00:54:33,966 can't you? 671 00:54:34,009 --> 00:54:36,055 SHAHEEN: There was a mandate to do something about 672 00:54:36,098 --> 00:54:38,318 the power of labor against capital. 673 00:54:38,362 --> 00:54:41,147 And it certainly is a tricky job trying to get that right. 674 00:54:41,190 --> 00:54:44,846 This government has rolled back the frontiers of the state 675 00:54:44,890 --> 00:54:48,154 and will roll them back still further. 676 00:54:48,197 --> 00:54:50,896 Millions have already become shareholders 677 00:54:50,939 --> 00:54:55,161 in British Gas, British Airways, British airports. 678 00:55:05,911 --> 00:55:07,260 WOMAN: Attention, all passengers. 679 00:55:07,304 --> 00:55:10,916 Flight 307 is cancelled until further notice. 680 00:55:10,959 --> 00:55:13,135 NAIDU: This incredible hostility to unions 681 00:55:13,179 --> 00:55:16,182 starts in the '80s and is really crystallized 682 00:55:16,225 --> 00:55:21,100 when Reagan fires all these air traffic controllers. 683 00:55:21,143 --> 00:55:23,494 REAGAN: I must tell those who fail to report for duty 684 00:55:23,537 --> 00:55:28,237 this morning, if they do not report for work within 48 hours, 685 00:55:28,281 --> 00:55:33,025 they have forfeited their jobs and will be terminated. 686 00:55:33,068 --> 00:55:34,722 End of statement. 687 00:55:34,766 --> 00:55:37,334 NAIDU: That's kind of seen as like a greenlight 688 00:55:37,377 --> 00:55:39,161 to a whole industry. 689 00:55:41,033 --> 00:55:43,905 Good evening. This afternoon, President Reagan started firing 690 00:55:43,949 --> 00:55:46,778 the strikers, and the government claimed it was ready to rebuild 691 00:55:46,821 --> 00:55:48,606 the whole system without them. 692 00:55:53,350 --> 00:55:55,090 By this evening, federal judges had sent 693 00:55:55,134 --> 00:55:57,658 five local union leaders to jail. 694 00:56:04,926 --> 00:56:07,538 SHAHEEN: What we've seen over time -- and this is fundamental 695 00:56:07,581 --> 00:56:10,758 to understanding why inequality has worsened -- 696 00:56:10,802 --> 00:56:14,806 is that the share of all the money that's made in the economy 697 00:56:14,849 --> 00:56:17,635 is going less and less to the workers, so that is declining -- 698 00:56:17,678 --> 00:56:19,985 the wage share -- 699 00:56:20,028 --> 00:56:23,510 and the profit share, essentially what those that own 700 00:56:23,554 --> 00:56:26,252 the capital will get, is growing. 701 00:56:28,515 --> 00:56:32,476 And that is essentially about power. 702 00:56:34,608 --> 00:56:37,437 Well, I, uh -- I appreciate the opportunity you're giving me, 703 00:56:37,481 --> 00:56:40,919 Mr. Cromwell, as the single largest shareholder 704 00:56:40,962 --> 00:56:43,051 in Teldar Paper, to speak. 705 00:56:45,532 --> 00:56:48,405 America has become a second-rate power. 706 00:56:49,667 --> 00:56:51,277 Now, in the days of the free market, 707 00:56:51,320 --> 00:56:54,454 when our country was a top industrial power, 708 00:56:54,498 --> 00:56:58,327 there was accountability to the stockholder. 709 00:56:58,371 --> 00:56:59,894 The Carnegies, the Mellons, 710 00:56:59,938 --> 00:57:02,636 the men that built this great industrial empire, 711 00:57:02,680 --> 00:57:06,423 made sure of it because it was their money at stake. 712 00:57:07,772 --> 00:57:09,861 The point is, ladies and gentlemen, 713 00:57:09,904 --> 00:57:14,039 that greed -- for lack of a better word -- 714 00:57:14,082 --> 00:57:15,910 is good. 715 00:57:15,954 --> 00:57:17,782 Greed is right. 716 00:57:17,825 --> 00:57:19,914 Greed works. 717 00:57:19,958 --> 00:57:21,655 And greed -- 718 00:57:22,526 --> 00:57:24,528 you mark my words -- 719 00:57:24,571 --> 00:57:26,965 will not only save Teldar Paper, 720 00:57:27,008 --> 00:57:31,056 but that other malfunctioning corporation called the USA. 721 00:57:31,099 --> 00:57:33,667 - Thank you very much. 722 00:57:33,711 --> 00:57:36,017 TETT: When Gordon Gekko was seen on film saying, 723 00:57:36,061 --> 00:57:40,631 "Greed is good," that was intended to be a howl of protest 724 00:57:40,674 --> 00:57:42,371 against the system. 725 00:57:42,415 --> 00:57:45,374 But such had the cultural fabric changed, 726 00:57:45,418 --> 00:57:47,899 that actually for some people coming through universities 727 00:57:47,942 --> 00:57:50,031 applying to join investment banks, 728 00:57:50,075 --> 00:57:52,860 that phrase "Greed is good" actually became a license 729 00:57:52,904 --> 00:57:54,775 to pursue riches. 730 00:58:03,784 --> 00:58:06,657 TETT: The era of the yuppie came to rule. 731 00:58:06,700 --> 00:58:09,573 ♪ Friday night and everyone's moving ♪ 732 00:58:09,616 --> 00:58:14,186 ♪ I can feel the heat, but it's soothing, heading down ♪ 733 00:58:14,229 --> 00:58:16,667 TETT: It began to become very cool to be an entrepreneur, 734 00:58:16,710 --> 00:58:18,495 to be riding that boom, 735 00:58:18,538 --> 00:58:22,673 and the idea of arguing for high taxes and redistribution 736 00:58:22,716 --> 00:58:24,892 began to seem very out of fashion. 737 00:58:24,936 --> 00:58:27,721 - ♪ We're the kids in America - ♪ Whoa 738 00:58:27,765 --> 00:58:30,637 - ♪ We're the kids in America - ♪ Whoa 739 00:58:30,681 --> 00:58:34,032 ♪ Everybody live for the music-go-round ♪ 740 00:58:36,513 --> 00:58:39,298 The new mantra of deregulation took hold, 741 00:58:39,341 --> 00:58:43,345 and so financial services were deregulated dramatically, 742 00:58:43,389 --> 00:58:45,260 bankers began to get paid a lot more, 743 00:58:45,304 --> 00:58:46,914 and then market forces were unleashed, 744 00:58:46,958 --> 00:58:50,222 which made capitalists a lot richer. 745 00:58:51,615 --> 00:58:53,617 ♪ Hot-shot... ♪ 746 00:59:02,103 --> 00:59:05,585 STIGLITZ: The big reforms of the Reagan-Thatcher era 747 00:59:05,629 --> 00:59:09,937 were lower the tax rates on the rich 748 00:59:09,981 --> 00:59:13,811 on the assumption it would trickle down. Didn't happen. 749 00:59:15,160 --> 00:59:17,466 When they adopted these kinds of policies, 750 00:59:17,510 --> 00:59:21,427 it was very clear that they would increase inequality. 751 00:59:21,470 --> 00:59:24,952 The promise was that the pie would be bigger, 752 00:59:24,996 --> 00:59:28,956 you would be getting a smaller percentage 753 00:59:29,000 --> 00:59:32,830 of a bigger pie, and your slice would get bigger. 754 00:59:34,222 --> 00:59:36,224 So in some sense, 755 00:59:37,661 --> 00:59:39,837 there was no surprise 756 00:59:39,880 --> 00:59:42,013 that there was a growth in inequality. 757 00:59:42,056 --> 00:59:45,016 But the magnitude of the increase in inequality 758 00:59:45,059 --> 00:59:46,757 was much larger. 759 00:59:46,800 --> 00:59:50,238 When we look at the numbers, we can see it very vividly. 760 00:59:50,282 --> 00:59:54,852 The bottom 90% have experienced near-stagnation. 761 00:59:54,895 --> 00:59:59,160 Most of the growth has gone to the top 10%. 762 00:59:59,204 --> 01:00:03,338 Median income for a typical American household is roughly 763 01:00:03,382 --> 01:00:05,993 at the level it was a quarter century ago. 764 01:00:06,037 --> 01:00:09,518 Real wages, adjusted for inflation, at the bottom 765 01:00:09,562 --> 01:00:12,652 are at the level they were 60 years ago. 766 01:00:16,438 --> 01:00:19,920 In fact, life expectancy has been declining. 767 01:00:21,618 --> 01:00:25,099 These are dramatic statistics that shows the economy 768 01:00:25,143 --> 01:00:28,494 has not been working for most Americans. 769 01:00:37,111 --> 01:00:40,375 By the 1990s, American banks really became the exporters 770 01:00:40,419 --> 01:00:42,813 of American capitalism, and they went everywhere -- 771 01:00:42,856 --> 01:00:45,467 they went to Europe, they went to Asia. 772 01:00:47,121 --> 01:00:51,082 And everyone was sold our version of a trickle-down, 773 01:00:51,125 --> 01:00:54,389 laissez-faire deregulate capitalism. 774 01:01:00,874 --> 01:01:04,835 Life seemed to get better in the 1990s, 775 01:01:04,878 --> 01:01:07,620 because the globalization of the system 776 01:01:07,664 --> 01:01:11,668 made things for ordinary people for a while cheaper, 777 01:01:11,711 --> 01:01:14,018 but then on top of that, you get credit. 778 01:01:17,412 --> 01:01:19,458 When the credit boom took off, 779 01:01:19,501 --> 01:01:21,982 suddenly ordinary people could get credit. 780 01:01:22,026 --> 01:01:23,723 MAN: Master the moment. 781 01:01:23,767 --> 01:01:27,422 Suddenly, extraordinarily poor people could get credit. 782 01:01:27,466 --> 01:01:29,511 - You can apply... - ...right over the phone. 783 01:01:29,555 --> 01:01:32,427 People with terrible credit histories could get credit. 784 01:01:32,471 --> 01:01:34,342 MAN: There is absolutely no risk. 785 01:01:34,386 --> 01:01:37,650 People who in no way should be given a mortgage 786 01:01:37,694 --> 01:01:40,522 could get a mortgage. 787 01:01:40,566 --> 01:01:43,482 And the investment banks created ever more exotic 788 01:01:43,525 --> 01:01:48,226 credit derivatives -- ways of parceling up your bad debt 789 01:01:48,269 --> 01:01:50,794 and disguising its badness. 790 01:01:50,837 --> 01:01:54,972 That's what kept the system going for as long as it did. 791 01:01:55,015 --> 01:01:57,017 And 2008 was where that blew up. 792 01:01:58,671 --> 01:02:00,978 Wall Street in panic mode this morning. 793 01:02:01,021 --> 01:02:02,501 How did this happen? 794 01:02:02,544 --> 01:02:05,112 22% of homeowners are underwater on their mortgage... 795 01:02:05,156 --> 01:02:06,505 Millions of American homeowners... 796 01:02:06,548 --> 01:02:08,202 - Homeowners defaulting... - Greed. 797 01:02:08,246 --> 01:02:10,770 The essence of the American Dream could be threatened. 798 01:02:10,814 --> 01:02:13,468 - Sub-prime lending... - Higher interest rates... 799 01:02:13,512 --> 01:02:16,210 Let's see here, uh, balloon payment, 800 01:02:16,254 --> 01:02:19,039 37% interest compounded every minute, 801 01:02:19,083 --> 01:02:21,259 not understanding the contract fee, 802 01:02:21,302 --> 01:02:23,522 da, da, ba, da, ba, ba-da, bow. 803 01:02:23,565 --> 01:02:25,219 And here's your new monthly payment. 804 01:02:26,568 --> 01:02:28,396 Listen, you, when you gave me that money, 805 01:02:28,440 --> 01:02:31,399 you said I wouldn't have to repay it till the future. 806 01:02:31,443 --> 01:02:34,402 This isn't the future! It's the lousy, stinkin' now! 807 01:02:34,446 --> 01:02:39,538 Now, calm down. This country takes care of its middle class. 808 01:02:43,194 --> 01:02:44,848 Ah, don't be sore at the banks. 809 01:02:44,891 --> 01:02:48,590 Hell, we fired our CEO and he barely got out with $50 million. 810 01:02:50,331 --> 01:02:52,420 REPORTER: Banks are afraid to lend money to each other. 811 01:02:52,464 --> 01:02:54,379 We're seeing a freezing of the credit market. 812 01:02:54,422 --> 01:02:55,641 - ...credit markets. - ...credit markets. 813 01:02:55,684 --> 01:02:57,121 REPORTER: The fear is rising. 814 01:02:57,164 --> 01:03:00,689 The fear was, and I think it was a well-founded fear, 815 01:03:00,733 --> 01:03:03,910 that the availability of credit would disappear, 816 01:03:03,954 --> 01:03:06,130 and perhaps our ability to even transact, 817 01:03:06,173 --> 01:03:08,349 to even be able to access cash to make payments, 818 01:03:08,393 --> 01:03:10,221 use a credit card, use a debit card. 819 01:03:10,264 --> 01:03:12,832 Perhaps that would break down also. 820 01:03:12,876 --> 01:03:15,356 REPORTER: Worst week since the crash of 1929. 821 01:03:15,400 --> 01:03:17,141 - ...global sell-off. - ...the Dow tumbled... 822 01:03:17,184 --> 01:03:19,621 - ...hoarding cash. - Japan down nearly 10%. 823 01:03:19,665 --> 01:03:23,364 REPORTER: The British government blamed American bankers. 824 01:03:23,408 --> 01:03:25,366 When it starts to unravel, then you start to worry -- 825 01:03:25,410 --> 01:03:27,847 how broadly will this spread around the world 826 01:03:27,891 --> 01:03:30,763 and are we on the verge of another Great Depression? 827 01:03:30,807 --> 01:03:34,854 American taxpayers woke up this morning to learn their money 828 01:03:34,898 --> 01:03:36,334 makes up most of a... 829 01:03:36,377 --> 01:03:38,771 Big package, because it was a big problem. 830 01:03:38,815 --> 01:03:40,468 Too big to fail. 831 01:03:40,512 --> 01:03:44,472 REPORTER: The Fed loaned the banks some $7.7 trillion. 832 01:03:44,516 --> 01:03:47,214 Global markets soared at the news of the US rescue plan. 833 01:03:47,258 --> 01:03:50,391 With the bail-out news, the stock rebounded nearly 60%. 834 01:03:50,435 --> 01:03:52,785 ...Hong Kong more than 8%. London's FTSE... 835 01:03:52,829 --> 01:03:54,221 REPORTER: Stokes rose 15% in one hour -- 836 01:03:54,265 --> 01:03:55,875 the largest single bounce in FTSE history. 837 01:03:55,919 --> 01:03:58,051 Those companies came to us and said, 838 01:03:58,095 --> 01:04:00,010 "Uh, if you don't give us $700 billion, 839 01:04:00,053 --> 01:04:01,750 everything you love and hold dear in this world 840 01:04:01,794 --> 01:04:03,927 - will turn to ." 841 01:04:03,970 --> 01:04:07,931 And in return for this in no way ransom money... 842 01:04:09,454 --> 01:04:12,370 ...the American people would now be the proud owner 843 01:04:12,413 --> 01:04:14,502 of these bales of . 844 01:04:16,983 --> 01:04:20,639 JOHNSON: The collapse didn't occur. The system was preserved 845 01:04:20,682 --> 01:04:23,903 and the opportunity to substantially reform the system 846 01:04:23,947 --> 01:04:26,340 was set aside. The stock market went down sharply, 847 01:04:26,384 --> 01:04:30,431 and then it came back up sharply as a result of these measures. 848 01:04:30,475 --> 01:04:32,912 In addition, wealthy people, rich people, 849 01:04:32,956 --> 01:04:34,827 have a lot of exposure to the stock market, 850 01:04:34,871 --> 01:04:37,264 so they kept their jobs, they kept their bonuses, 851 01:04:37,308 --> 01:04:39,005 the businesses they were in were not 852 01:04:39,049 --> 01:04:42,313 substantially disrupted, and they made more money 853 01:04:42,356 --> 01:04:43,967 through stock appreciation 854 01:04:44,010 --> 01:04:45,969 and through dividends and through expected dividends 855 01:04:46,012 --> 01:04:48,362 than they had in the last couple of years. 856 01:04:48,406 --> 01:04:50,364 REPORTER: Bloomberg estimates the banks made 857 01:04:50,408 --> 01:04:53,193 a $13 billion profit on the spread. 858 01:04:53,237 --> 01:04:56,022 REPORTER: 73 executives from the unit that engineered 859 01:04:56,066 --> 01:04:59,417 the company's downfall all just got bonus checks 860 01:04:59,460 --> 01:05:03,595 - worth a million or more. - ...$1.6 billion in bonuses. 861 01:05:04,988 --> 01:05:07,555 JOHNSON: Wall Street and the views of Wall Street 862 01:05:07,599 --> 01:05:09,601 had taken over policy. 863 01:05:11,211 --> 01:05:13,213 That's the quiet coup. 864 01:05:20,438 --> 01:05:23,571 FUKUYAMA: Democracies in general are susceptible to this 865 01:05:23,615 --> 01:05:25,617 capture by elites. 866 01:05:27,880 --> 01:05:31,971 And unless the democracy is renewed by the non-elites 867 01:05:32,015 --> 01:05:34,234 every now and then rising up, 868 01:05:34,278 --> 01:05:37,977 the democracy will continue to move in this direction 869 01:05:38,021 --> 01:05:43,504 where power and wealth are more and more concentrated. 870 01:05:43,548 --> 01:05:47,508 All across the world, you now have this layer of oligarchs 871 01:05:47,552 --> 01:05:51,469 that use their money to buy political influence. 872 01:06:34,555 --> 01:06:37,167 MAN: Rationally speaking, it would make sense that 873 01:06:37,210 --> 01:06:39,865 the more of something you have, maybe the more inclined 874 01:06:39,908 --> 01:06:42,781 you would be to share it with other people. 875 01:06:42,824 --> 01:06:46,132 But that's not what our research and what a lot of other research 876 01:06:46,176 --> 01:06:48,265 seems to find. 877 01:06:48,308 --> 01:06:51,964 We brought strangers into the lab in pairs of two; 878 01:06:52,008 --> 01:06:53,748 with a flip of a coin determined 879 01:06:53,792 --> 01:06:55,359 who was going to be a rich player 880 01:06:55,402 --> 01:06:57,926 and was going to be a poor player. 881 01:07:01,539 --> 01:07:05,151 The rich player got two times as much money to play the game, 882 01:07:05,195 --> 01:07:07,414 they got to roll both dice instead of one, 883 01:07:07,458 --> 01:07:09,503 so they got to move around the board a lot quicker, 884 01:07:09,547 --> 01:07:12,028 and that mattered because when they moved around the board 885 01:07:12,071 --> 01:07:13,681 and passed 'Go,' 886 01:07:13,725 --> 01:07:17,163 they would collect $200, whereas the poor person, 887 01:07:17,207 --> 01:07:19,948 they'd collect $100. 888 01:07:19,992 --> 01:07:22,081 The inequality's almost immediately apparent 889 01:07:22,125 --> 01:07:23,909 to the players. How couldn't it be? 890 01:07:23,952 --> 01:07:27,782 But within a couple of minutes, dynamics start to crystallize. 891 01:07:33,571 --> 01:07:36,748 And the rich player started to behave a little differently. 892 01:07:36,791 --> 01:07:38,532 Rich players become more dominant. 893 01:07:40,099 --> 01:07:43,233 Rich players eat more pretzels. 894 01:07:43,276 --> 01:07:48,151 When moving their piece around the board, they become louder. 895 01:07:48,194 --> 01:07:51,980 They start smacking the board with their piece. 896 01:07:53,808 --> 01:07:56,376 And the rich players were significantly ruder. 897 01:07:58,596 --> 01:08:02,121 They were far more likely to showcase and talk about 898 01:08:02,165 --> 01:08:05,081 how well they're doing 899 01:08:05,124 --> 01:08:09,041 and to belittle the plight of those poor players. 900 01:08:10,956 --> 01:08:14,002 So they became less compassionate. 901 01:08:14,046 --> 01:08:17,005 These are patterns that we're observing consistently over 902 01:08:17,049 --> 01:08:18,833 hundreds of different individuals. 903 01:08:20,835 --> 01:08:24,361 You see people who are winning because of the flip of a coin 904 01:08:24,404 --> 01:08:27,277 start to act as if they actually deserve to win. 905 01:08:30,497 --> 01:08:34,806 One of the questions we ask is "Why did you win the game?" 906 01:08:34,849 --> 01:08:36,938 And you can imagine the rich players would say, 907 01:08:36,982 --> 01:08:38,940 "Well, I won the game because of that flip of the coin 908 01:08:38,984 --> 01:08:42,292 and I had two times the advantage." 909 01:08:42,335 --> 01:08:46,600 But none -- not one -- of the rich players 910 01:08:46,644 --> 01:08:50,909 attributed their inevitable success in this game 911 01:08:50,952 --> 01:08:56,132 to that force of luck that randomly got them 912 01:08:56,175 --> 01:08:59,787 that privileged position in the first place. 913 01:09:01,354 --> 01:09:04,836 And when we watch patterns of human interactions, 914 01:09:04,879 --> 01:09:08,579 people who feel entitled and deserving of their own success 915 01:09:08,622 --> 01:09:11,886 are more willing to privilege their own interests 916 01:09:11,930 --> 01:09:13,714 above the interests of other people 917 01:09:13,758 --> 01:09:16,195 and often engage in ways that undermine 918 01:09:16,239 --> 01:09:19,894 other people's welfare so that they can get ahead. 919 01:09:19,938 --> 01:09:24,160 And that's a fairly pernicious social consequence. 920 01:09:25,900 --> 01:09:28,686 But it's not about people who are rich, 921 01:09:28,729 --> 01:09:32,342 but rather that the experience of being relatively better off 922 01:09:32,385 --> 01:09:35,432 than someone seems to affect everyone, 923 01:09:35,475 --> 01:09:38,174 or would affect everyone, in the same way. 924 01:09:39,479 --> 01:09:41,220 Yes, we won the lottery! 925 01:09:47,095 --> 01:09:49,881 Peter, my God, what the hell are you wearing?! 926 01:09:49,924 --> 01:09:53,101 It's a solid gold tuxedo, Lois. I had to fight three rappers 927 01:09:53,145 --> 01:09:55,060 down at the Nonsense Store for this. 928 01:09:55,103 --> 01:09:56,931 Look, Peter, this is not who we are. 929 01:09:56,975 --> 01:09:58,977 I'm worried the money is changing this family, 930 01:09:59,020 --> 01:10:00,674 and not the way you hoped. 931 01:10:00,718 --> 01:10:03,024 Well, I was hoping it would make you shut up, so you're right. 932 01:10:03,068 --> 01:10:06,114 PIFF: When we, in experiments, get actually poor people 933 01:10:06,158 --> 01:10:08,508 or we make poor people feel rich, 934 01:10:08,552 --> 01:10:10,641 again, same pattern of results. 935 01:10:10,684 --> 01:10:12,120 Lois, don't you understand? 936 01:10:12,164 --> 01:10:14,122 We don't got any of our old problems anymore. 937 01:10:14,166 --> 01:10:15,733 We don't have to worry about paying bills, 938 01:10:15,776 --> 01:10:18,170 we don't have to worry about saving dough. 939 01:10:18,214 --> 01:10:20,564 All we gotta do is enjoy ourselves. 940 01:10:20,607 --> 01:10:22,522 Interested? 941 01:10:24,263 --> 01:10:26,309 Oh my God! 942 01:10:28,006 --> 01:10:31,139 Peter, it's beautiful. Is it a blood diamond? 943 01:10:31,183 --> 01:10:32,924 Ah, the bloodiest. 944 01:10:32,967 --> 01:10:35,318 The two kids who found it were forced to murder each other. 945 01:10:35,361 --> 01:10:37,320 Oh, Peter, I love it! 946 01:10:37,363 --> 01:10:40,888 We translate perceptions and experiences 947 01:10:40,932 --> 01:10:43,935 of being better off than others materially 948 01:10:43,978 --> 01:10:46,764 to being better than others. 949 01:10:46,807 --> 01:10:49,114 The mind makes that translation, it seems. 950 01:11:04,521 --> 01:11:07,088 MASON: Once you get people whose entire life is lived 951 01:11:07,132 --> 01:11:10,396 on a kind of plane, you know, in First Class, 952 01:11:10,440 --> 01:11:12,877 in the bubble of the security system, 953 01:11:12,920 --> 01:11:15,314 and your villa in three or four different countries 954 01:11:15,358 --> 01:11:18,404 you can move to if things get a bit unpleasant, 955 01:11:18,448 --> 01:11:20,754 what happens to taxation? 956 01:11:20,798 --> 01:11:25,019 What happens is large amounts of wealth are moved offshore. 957 01:11:29,807 --> 01:11:33,593 For decades, individuals and companies have moved 958 01:11:33,637 --> 01:11:37,815 their legal selves in order to avoid paying tax 959 01:11:37,858 --> 01:11:40,992 that benefits the people who work for them. 960 01:11:42,646 --> 01:11:45,257 So that when you come out of the HQ of one of these 961 01:11:45,301 --> 01:11:48,042 giant trendy IT companies, 962 01:11:48,086 --> 01:11:50,828 you fall over, you hit your head, 963 01:11:50,871 --> 01:11:53,352 and you're lying on the pavement in a pool of blood, 964 01:11:53,396 --> 01:11:55,659 an ambulance arrives 965 01:11:55,702 --> 01:11:58,444 that has not been paid for in any way, shape or form 966 01:11:58,488 --> 01:12:00,533 by the taxes of that company. 967 01:12:02,622 --> 01:12:05,756 That's a very new system in capitalism. 968 01:12:07,627 --> 01:12:10,238 And it is unsustainable 969 01:12:10,282 --> 01:12:12,415 because to make it work, 970 01:12:12,458 --> 01:12:15,548 the state must have access via taxation 971 01:12:15,592 --> 01:12:18,072 to the incomes of the rich. 972 01:12:21,946 --> 01:12:24,078 REPORTER: The EU has ordered the Irish government 973 01:12:24,122 --> 01:12:28,039 to recover almost $15 billion of unpaid taxes from Apple. 974 01:12:28,082 --> 01:12:30,824 REPORTER: $15 billion is more than the four years 975 01:12:30,868 --> 01:12:33,958 of annual austerity cuts imposed by the Irish government. 976 01:12:34,001 --> 01:12:36,700 WOMAN: Amazon's tax benefits are illegal. 977 01:12:36,743 --> 01:12:39,224 REPORTER: Facebook paid less UK corporation tax 978 01:12:39,267 --> 01:12:40,704 than your average teacher. 979 01:12:40,747 --> 01:12:43,054 90,000 come from zero corporation tax. 980 01:12:43,097 --> 01:12:45,186 - Scrutinize... - ...the rich avoiding taxes. 981 01:12:45,230 --> 01:12:46,753 Google, Microsoft... 982 01:12:46,797 --> 01:12:48,059 - McDonald's... - Facebook... 983 01:12:52,977 --> 01:12:55,327 FOROOHAR: It just works much better for the holders 984 01:12:55,371 --> 01:13:00,071 of capital than it does for people on the ground. 985 01:13:00,114 --> 01:13:02,943 In particular, the giant cash-rich tech firms 986 01:13:02,987 --> 01:13:06,251 can put people and money wherever they want to put them. 987 01:13:06,294 --> 01:13:11,038 They just fly 35,000 feet above national concerns. 988 01:13:11,082 --> 01:13:14,433 They create far fewer jobs than big industrial companies 989 01:13:14,477 --> 01:13:18,176 of the past, yet they make vastly more money. 990 01:13:25,749 --> 01:13:28,186 The great irony here is that everything that makes 991 01:13:28,229 --> 01:13:30,493 a smart phone smart -- 992 01:13:30,536 --> 01:13:33,147 the internet, GPS, touchscreen technology -- 993 01:13:33,191 --> 01:13:36,934 all that was our taxpayer money going into federal agencies 994 01:13:36,977 --> 01:13:39,589 like DARPA that created this stuff, 995 01:13:39,632 --> 01:13:43,506 and yet the wealth doesn't flow back into the ecosystem. 996 01:13:43,549 --> 01:13:48,467 Irish guys pay a fee to Google Netherlands Holding BV. 997 01:13:48,511 --> 01:13:50,338 Is that to save withholding tax? 998 01:13:50,382 --> 01:13:51,644 That's my understanding. 999 01:13:51,688 --> 01:13:53,907 It therefore goes to Google Holdings Ireland? 1000 01:13:53,951 --> 01:13:55,735 -That's correct. -Which is registered in Ireland 1001 01:13:55,779 --> 01:13:57,607 but administered from Bermuda? 1002 01:13:57,650 --> 01:14:00,305 -That's correct. -So if that happens, 1003 01:14:00,348 --> 01:14:02,176 your profits actually go to Bermuda? 1004 01:14:03,787 --> 01:14:07,443 ♪ All that money, the money is the motive ♪ 1005 01:14:07,486 --> 01:14:11,447 ♪ All that money, the money is the motive ♪ 1006 01:14:11,490 --> 01:14:15,407 ♪ All that money, the money she be folding ♪ 1007 01:14:15,451 --> 01:14:17,191 ♪ Girl put in work 1008 01:14:17,235 --> 01:14:19,411 ♪ Girl, girl, put in work 1009 01:14:19,455 --> 01:14:21,108 ♪ Girl put in work 1010 01:14:21,152 --> 01:14:23,415 ♪ Girl, girl, put in work 1011 01:14:23,459 --> 01:14:24,764 ♪ Girl put in work... 1012 01:15:01,540 --> 01:15:03,542 ♪ All that money 1013 01:15:03,586 --> 01:15:05,718 - ♪ The money is the motive - ♪ The money is the motive 1014 01:15:05,762 --> 01:15:09,417 ♪ All that money, the money she be folding ♪ 1015 01:15:09,461 --> 01:15:10,723 ♪ Girl, put in work... 1016 01:15:13,900 --> 01:15:15,162 ♪ Girl put in work 1017 01:15:15,206 --> 01:15:17,208 ♪ Girl, girl, put in work ♪ 1018 01:17:06,099 --> 01:17:09,102 BREMMER: Globalization has opened a global community up 1019 01:17:09,146 --> 01:17:10,582 to each other, 1020 01:17:10,626 --> 01:17:13,933 but it's also meant that in the developed world, 1021 01:17:13,977 --> 01:17:18,285 corporations were able to take jobs and move them 1022 01:17:18,329 --> 01:17:20,853 and make a lot of money out of it. 1023 01:17:23,073 --> 01:17:26,076 And on the other hand, the working and middle classes 1024 01:17:26,119 --> 01:17:29,688 that were doing quite well have lost quality of life 1025 01:17:29,732 --> 01:17:31,559 and opportunities. 1026 01:17:33,039 --> 01:17:37,000 And their governments and their corporations 1027 01:17:37,043 --> 01:17:41,482 have done very little -- in some cases, really nothing at all -- 1028 01:17:41,526 --> 01:17:43,528 to address that. 1029 01:17:46,966 --> 01:17:50,143 The United States and Europe are vastly more divided 1030 01:17:50,187 --> 01:17:51,710 because of globalization. 1031 01:17:51,754 --> 01:17:55,192 India, The Philippines, China are not. 1032 01:18:01,807 --> 01:18:06,116 Chinese people, they believe that if they work hard, 1033 01:18:06,159 --> 01:18:07,944 their kids are gonna have better lives, 1034 01:18:07,987 --> 01:18:09,728 and that's probably true. 1035 01:18:09,772 --> 01:18:12,688 But in the United States, that's just not true anymore. 1036 01:18:19,390 --> 01:18:24,134 If you go to Beijing or Shenzhen or Shanghai 1037 01:18:24,177 --> 01:18:26,832 or Guangzhou or any of these sort of 1038 01:18:26,876 --> 01:18:29,705 wealthier cities in China that have made it -- 1039 01:18:29,748 --> 01:18:32,316 Shanghai, where per capita income 1040 01:18:32,359 --> 01:18:36,363 is higher than Portugal -- you will meet middle class Chinese, 1041 01:18:36,407 --> 01:18:38,409 and I mean global middle class Chinese; 1042 01:18:38,452 --> 01:18:41,194 I don't mean middle class from the Chinese context. 1043 01:18:41,238 --> 01:18:44,807 And that is a very different China from what you saw 1044 01:18:44,850 --> 01:18:46,852 even 10 years ago. 1045 01:18:50,551 --> 01:18:53,163 China's now almost the largest economy in the world; 1046 01:18:53,206 --> 01:18:55,643 within the next decade it will be, 1047 01:18:55,687 --> 01:18:58,734 but it will still be state capitalist. 1048 01:19:04,435 --> 01:19:08,700 State capitalism is where state-owned enterprises 1049 01:19:08,744 --> 01:19:12,835 are the most important actors in the economy. 1050 01:19:12,878 --> 01:19:15,228 These corporations are, in principle, 1051 01:19:15,272 --> 01:19:17,927 trying to make money and build themselves, 1052 01:19:17,970 --> 01:19:20,103 and sometimes they do compete against each other 1053 01:19:20,146 --> 01:19:22,845 in a fairly controlled fashion. 1054 01:19:22,888 --> 01:19:26,805 But the other important Chinese actors are what you'd call 1055 01:19:26,849 --> 01:19:29,112 privately owned national champions. 1056 01:19:29,155 --> 01:19:32,550 So, in other words, they are actively supported by the state, 1057 01:19:32,593 --> 01:19:34,421 even though they're privately held, 1058 01:19:34,465 --> 01:19:36,554 and they benefit accordingly. 1059 01:19:40,732 --> 01:19:43,430 Also you have hundreds of millions of people 1060 01:19:43,474 --> 01:19:45,693 who are quite poor, 1061 01:19:45,737 --> 01:19:47,434 but they want state capitalism. 1062 01:19:47,478 --> 01:19:50,829 It's fine for them, as long as they can make enough money 1063 01:19:50,873 --> 01:19:54,137 to ensure that their kids will do better. 1064 01:20:34,438 --> 01:20:37,702 FUKUYAMA: China does show what freeing up capital will do to 1065 01:20:37,745 --> 01:20:40,052 income distribution. 1066 01:20:40,096 --> 01:20:43,621 Capital really has to be regulated much, much more 1067 01:20:43,664 --> 01:20:46,972 strictly than things in the real economy. 1068 01:20:50,019 --> 01:20:53,718 There's a fundamental difference between liberalization 1069 01:20:53,761 --> 01:20:55,459 of capital markets 1070 01:20:55,502 --> 01:20:59,767 and liberalization of trade and goods and services. 1071 01:20:59,811 --> 01:21:04,163 This was one of the big lessons of the Great Depression. 1072 01:21:06,252 --> 01:21:09,647 FOROOHAR: Modern capitalism is all about the free movement 1073 01:21:09,690 --> 01:21:11,779 of global capital, 1074 01:21:11,823 --> 01:21:14,826 and the financial system itself has changed 1075 01:21:14,870 --> 01:21:16,654 over the last 40 years. 1076 01:21:16,697 --> 01:21:19,787 The financial industry has about doubled in size as a percentage 1077 01:21:19,831 --> 01:21:22,921 of the economy, and that's actually created slower growth, 1078 01:21:22,965 --> 01:21:25,793 not faster growth. 1079 01:21:25,837 --> 01:21:28,535 When Adam Smith, the father of modern capitalism, 1080 01:21:28,579 --> 01:21:31,582 was thinking up the idea of the free market system, 1081 01:21:31,625 --> 01:21:33,366 he was living in a very different world. 1082 01:21:33,410 --> 01:21:35,629 Hey, why not? My own business. 1083 01:21:35,673 --> 01:21:39,024 All you need's a little capital, a little push and an idea. 1084 01:21:39,068 --> 01:21:41,592 FOROOHAR: Small and mid-sized family-owned businesses 1085 01:21:41,635 --> 01:21:42,854 were the norm. 1086 01:21:42,898 --> 01:21:44,595 I wouldn't wear that hat to a dog fight. 1087 01:21:44,638 --> 01:21:46,902 WOMAN: Why, there isn't a decent hat in the entire village. 1088 01:21:46,945 --> 01:21:50,818 Why not? Women's hats! My own business! 1089 01:21:50,862 --> 01:21:52,690 FOROOHAR: He believed that the financial markets 1090 01:21:52,733 --> 01:21:55,432 were just an intermediary -- they were supposed to take 1091 01:21:55,475 --> 01:21:58,261 everyone's savings, hold them as bank deposits, 1092 01:21:58,304 --> 01:22:03,092 and then lend them out to the hairdresser down the street. 1093 01:22:03,135 --> 01:22:05,311 Not to be too cliché, but it's kind of the 1094 01:22:05,355 --> 01:22:08,706 "It's a Wonderful Life" model of banking. 1095 01:22:10,229 --> 01:22:12,188 I think if Adam Smith time-warped, 1096 01:22:12,231 --> 01:22:16,453 he would have no idea what to make of a "too big to fail" bank 1097 01:22:16,496 --> 01:22:19,108 or a giant multinational company that's doing business 1098 01:22:19,151 --> 01:22:20,805 in 120 different countries, 1099 01:22:20,848 --> 01:22:23,460 all of which have different regulatory systems. 1100 01:22:23,503 --> 01:22:25,462 It's a completely different world. 1101 01:22:35,341 --> 01:22:40,607 Statistics today show that only 15% of money 1102 01:22:40,651 --> 01:22:43,132 coming out of the largest financial institutions 1103 01:22:43,175 --> 01:22:46,178 is actually going to that kind of productive lending. 1104 01:22:46,222 --> 01:22:48,876 So what's the other 85% doing? 1105 01:22:48,920 --> 01:22:51,531 It's just moving around this closed loop 1106 01:22:51,575 --> 01:22:53,185 of the financial system -- 1107 01:22:53,229 --> 01:22:56,972 its assets being bought and sold by the same people; 1108 01:22:57,015 --> 01:22:59,887 their value going up, up, up, up, up. 1109 01:23:02,499 --> 01:23:06,894 MASON: For the rich, it's easier to keep your wealth away 1110 01:23:06,938 --> 01:23:09,245 from productive, risky activity, 1111 01:23:09,288 --> 01:23:12,552 and this is producing a new social story. 1112 01:23:15,120 --> 01:23:18,515 It's easier to build a property, 1113 01:23:18,558 --> 01:23:20,517 and maybe you don't fill that property, 1114 01:23:20,560 --> 01:23:23,433 maybe all the apartments in the property aren't filled, 1115 01:23:23,476 --> 01:23:25,913 but you know in five years' time that property will be worth 1116 01:23:25,957 --> 01:23:30,527 so much more, that your business is really to sit on assets 1117 01:23:30,570 --> 01:23:33,095 and hope their value rises, 1118 01:23:33,138 --> 01:23:36,054 rather than to try and make money by risking your money 1119 01:23:36,098 --> 01:23:40,798 in activities like open a factory or invent something new. 1120 01:23:43,888 --> 01:23:46,151 EDWARDS: If you own a house, you're making capital gains 1121 01:23:46,195 --> 01:23:49,633 out of that far in excess of what people get 1122 01:23:49,676 --> 01:23:51,678 through just regular jobs. 1123 01:23:51,722 --> 01:23:54,377 Therefore, people have become property speculators. 1124 01:23:54,420 --> 01:23:58,468 And this changes the whole way the housing situation operates. 1125 01:23:59,860 --> 01:24:02,211 And, essentially, it starts dividing. 1126 01:24:03,734 --> 01:24:05,431 This housing crisis that's happening 1127 01:24:05,475 --> 01:24:07,129 really throughout the West is something 1128 01:24:07,172 --> 01:24:11,524 that particularly affects the young. 1129 01:24:11,568 --> 01:24:15,963 Most people view this as some sort of generational fight. 1130 01:24:16,007 --> 01:24:18,444 The baby boomers benefited from buying houses 1131 01:24:18,488 --> 01:24:20,359 when they were relatively cheap, 1132 01:24:20,403 --> 01:24:23,797 and therefore have a very nice nest egg for their retirement, 1133 01:24:23,841 --> 01:24:28,672 and it's the young people that can't even rent cheaply. 1134 01:24:28,715 --> 01:24:31,588 Those at the bottom, I think, are quite polarized -- 1135 01:24:31,631 --> 01:24:34,243 angry, in fact. 1136 01:24:34,286 --> 01:24:37,463 These houses, essentially, earn more money than they do, 1137 01:24:37,507 --> 01:24:39,596 and they have to rent them. 1138 01:24:48,953 --> 01:24:51,434 MASON: It transmits to the poor or middle class person 1139 01:24:51,477 --> 01:24:55,220 that the best thing they can do is to hope that their home 1140 01:24:55,264 --> 01:24:57,048 rises so much in value 1141 01:24:57,092 --> 01:24:59,268 that it offsets all the other problems in their life, 1142 01:24:59,311 --> 01:25:01,052 like that their pension was destroyed 1143 01:25:01,096 --> 01:25:02,445 or that they lost their job 1144 01:25:02,488 --> 01:25:05,404 or that their kids are gonna be poor. 1145 01:25:15,371 --> 01:25:19,201 SHAHEEN: Young people are naturally more hopeful. 1146 01:25:19,244 --> 01:25:22,160 But they are aware, they are acutely aware, 1147 01:25:22,204 --> 01:25:24,989 that they've been given a raw deal. 1148 01:25:26,947 --> 01:25:29,080 You know, why is it, to educate yourself, 1149 01:25:29,124 --> 01:25:33,476 you have to get yourself into £50,000 of debt? 1150 01:25:33,519 --> 01:25:37,175 And a lot of young people feel infantiled. 1151 01:25:37,219 --> 01:25:41,136 Why does my incredibly smart 26-year-old brother-in-law 1152 01:25:41,179 --> 01:25:42,833 still have to live at home? 1153 01:25:42,876 --> 01:25:46,489 He's asking that, my in-laws are asking that. 1154 01:26:01,547 --> 01:26:05,247 What we've told people is that, "You're not poor; 1155 01:26:05,290 --> 01:26:07,031 you're a millionaire-in-waiting. 1156 01:26:07,074 --> 01:26:09,512 And because of that, don't worry about inequality, 1157 01:26:09,555 --> 01:26:11,383 just focus on how hard you're working 1158 01:26:11,427 --> 01:26:15,170 and trying to run, run, run, run up that hill," 1159 01:26:17,650 --> 01:26:22,916 which is ironic, because societies that are more unequal 1160 01:26:22,960 --> 01:26:25,136 have less social mobility. 1161 01:26:27,573 --> 01:26:30,141 The rungs of the ladder grow apart, 1162 01:26:30,185 --> 01:26:34,841 people have the money to make sure they stay at the top, 1163 01:26:34,885 --> 01:26:38,410 and it means it's harder for people to climb. 1164 01:26:38,454 --> 01:26:43,067 That's something that you find again and again in the data. 1165 01:26:43,894 --> 01:26:46,505 The system is rigged. 1166 01:26:46,549 --> 01:26:50,466 And people aren't stupid -- they recognize that. 1167 01:27:05,655 --> 01:27:07,787 TETT: Essentially, what's happening is that you're 1168 01:27:07,831 --> 01:27:10,573 getting an economy which is more and more productive, 1169 01:27:10,616 --> 01:27:14,185 but where the gains of those productivity increases 1170 01:27:14,229 --> 01:27:18,668 are going into the hands of a very small number of people. 1171 01:27:18,711 --> 01:27:20,365 And where there is job growth 1172 01:27:20,409 --> 01:27:22,280 is at the lower end of the spectrum, 1173 01:27:22,324 --> 01:27:25,762 which is often low-paid, fairly unsatisfactory work. 1174 01:27:32,508 --> 01:27:35,467 Our labor market is shifting. 1175 01:27:35,511 --> 01:27:39,776 More and more, it classifies people as "self-employed." 1176 01:27:39,819 --> 01:27:42,257 And what that means is that companies won't owe them 1177 01:27:42,300 --> 01:27:46,043 holiday pay, won't owe them a pension, 1178 01:27:46,086 --> 01:27:49,220 and those individual workers have to make sure 1179 01:27:49,264 --> 01:27:52,136 that they can look after themselves if they're sick, 1180 01:27:52,179 --> 01:27:54,530 if they want to take a holiday. 1181 01:27:59,186 --> 01:28:01,319 MASON: You know what, when Piketty says 1182 01:28:01,363 --> 01:28:04,670 that the future for capitalism is this highly illegal, 1183 01:28:04,714 --> 01:28:09,501 highly socially immobile future, it's already happening. 1184 01:28:15,551 --> 01:28:17,857 TETT: America's about to see the biggest wealth transfer 1185 01:28:17,901 --> 01:28:21,948 in history take place, as the generation which made money 1186 01:28:21,992 --> 01:28:23,733 after World War II 1187 01:28:23,776 --> 01:28:27,345 is passing that wealth on to their children. 1188 01:28:36,702 --> 01:28:39,139 Something in the order of $12 trillion or more 1189 01:28:39,183 --> 01:28:41,228 is going to be passed on to the next generation 1190 01:28:41,272 --> 01:28:44,144 in the next 10 to 15 years. 1191 01:28:44,188 --> 01:28:47,800 And that will be invested in a way that it creates more wealth. 1192 01:30:47,529 --> 01:30:50,836 There's now research showing that in advanced economies, 1193 01:30:50,880 --> 01:30:54,492 that two-thirds of the population is now on track 1194 01:30:54,536 --> 01:30:56,712 to be poorer than their parents, 1195 01:30:56,755 --> 01:30:59,628 which is a huge, huge mega political trend. 1196 01:31:13,250 --> 01:31:16,253 MASON: People on the streets are starting to say, "Enough" -- 1197 01:31:21,737 --> 01:31:25,175 ...enough of the inequality and enough of not having a story 1198 01:31:25,218 --> 01:31:28,047 about how this ever gets better. 1199 01:31:28,091 --> 01:31:29,614 And people are reaching out 1200 01:31:29,658 --> 01:31:31,573 for the nearest thing they can cling to, 1201 01:31:31,616 --> 01:31:33,923 and often that is their identity, their ethnicity, 1202 01:31:33,966 --> 01:31:36,186 their religion. 1203 01:31:43,062 --> 01:31:46,457 And they lash out against the nearest enemy they can find. 1204 01:31:46,501 --> 01:31:48,720 BORIS JOHNSON: Vast amounts of unskilled labor 1205 01:31:48,764 --> 01:31:50,548 coming into this country. 1206 01:31:50,592 --> 01:31:53,116 DONALD TRUMP: They're bringing drugs, they're bringing crime, 1207 01:31:53,159 --> 01:31:54,334 they're rapists. 1208 01:32:00,602 --> 01:32:03,082 But ultimately, none of that will work. 1209 01:32:03,126 --> 01:32:07,130 Blaming your neighbor doesn't make you any richer. 1210 01:34:37,193 --> 01:34:39,238 BREMMER: You know, if you wanna think about what the longer term 1211 01:34:39,282 --> 01:34:43,025 implications are, I mean, the truly dystopian implications, 1212 01:34:43,068 --> 01:34:44,809 you think about horses. 1213 01:34:46,245 --> 01:34:49,118 I mean, we used to have a lot of horses. 1214 01:34:50,119 --> 01:34:51,729 End of the 19th century, right, 1215 01:34:51,773 --> 01:34:55,515 I mean, horses were critical for industrialization. 1216 01:34:55,559 --> 01:34:57,779 And then they weren't, 1217 01:34:57,822 --> 01:35:00,346 because you have all these industrial processes 1218 01:35:00,390 --> 01:35:04,002 that are much more efficient than horses are. 1219 01:35:05,656 --> 01:35:08,659 And, you know, for all of the technophiles 1220 01:35:08,703 --> 01:35:12,881 that are saying, "Technology has always created more jobs, 1221 01:35:12,924 --> 01:35:14,839 and so it will continue to," 1222 01:35:14,883 --> 01:35:18,103 I say, "Technology has always created more jobs, 1223 01:35:18,147 --> 01:35:22,978 as long as you had things that human beings could do." 1224 01:35:28,810 --> 01:35:32,074 But when technology starts actually getting at 1225 01:35:32,117 --> 01:35:35,468 the basic functionality of a human being, 1226 01:35:38,210 --> 01:35:42,998 then human beings start becoming the equivalent of horses. 1227 01:35:45,130 --> 01:35:46,871 And that doesn't mean 1228 01:35:46,915 --> 01:35:50,179 that we can no longer have meaningful lives, 1229 01:35:50,222 --> 01:35:52,355 but it means that you have to change your model 1230 01:35:52,398 --> 01:35:56,098 because capitalism is no longer about labor. 1231 01:36:00,885 --> 01:36:04,541 And the problem is this is coming soon, soon, soon. 1232 01:36:05,847 --> 01:36:09,154 You look at driverless technologies. 1233 01:36:09,198 --> 01:36:13,768 Driving is, by the way, the single largest or second largest 1234 01:36:13,811 --> 01:36:17,859 employer of people in every one of the 50 US states, 1235 01:36:17,902 --> 01:36:21,776 and within 10 years, most of those jobs are gone. 1236 01:36:24,474 --> 01:36:29,784 So you will address capital, because if you don't, right, 1237 01:36:29,827 --> 01:36:33,352 you are going to have very serious problems. 1238 01:36:53,024 --> 01:36:54,809 NAIDU: We're leaving an industrial economy 1239 01:36:54,852 --> 01:36:58,029 and going to a post-industrial economy. 1240 01:36:58,073 --> 01:37:00,466 And we have to make choices 1241 01:37:00,510 --> 01:37:03,078 about which future we wind up in. 1242 01:37:05,515 --> 01:37:09,562 You can have abundance that is very unequally distributed, 1243 01:37:09,606 --> 01:37:13,218 where we have the robots that can do anything, 1244 01:37:13,262 --> 01:37:16,091 but the only people that own the robots are a very small 1245 01:37:16,134 --> 01:37:18,136 segment of society,... 1246 01:37:19,921 --> 01:37:22,749 basically like Elysium, where a bunch of people 1247 01:37:22,793 --> 01:37:25,230 live in ecologically protected spaces 1248 01:37:25,274 --> 01:37:29,800 and everyone else is living in, like, a hot, putrid mess. 1249 01:37:32,629 --> 01:37:35,458 And so it's a political problem.