WEBVTT

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- I believe that open markets
and free enterprise are the best

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imaginable force for improving
human wealth and happiness.

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- (Protesters): Who protects
the bankers?

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Police protect the bankers!

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- Did you ever have a moment
of doubt about capitalism?

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- Is there some society you know
that doesn\'t run on greed?

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- How would Smith see the
economic world around us?

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- I think Keynes would have said
the problem is the hole

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in the economy.

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- Hayek really wrote
\"The Road to Serfdom\"

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as a warning.
- You always have to be careful

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with Marx about the one-liners.

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- Polanyi, for me, was
an intellectual earthquake.

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- I mean, if I had to stereotype
Ricardo, I would say he would

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look like George Soros.

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- (Narrator): We were told
that capitalism is the product

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of big thinkers and big ideas,
but is it true? How did ideas

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shape our lives? What is
their relation to reality?

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Can they help us understand
today\'s economic crisis,

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let alone the future
of capitalism?

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- Clarion call of industry sounds
\"good morning\" to America\'s

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manpower. In thousands of homes,
vigorous workmen rise to meet

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a new day and a new opportunity.

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- I\'m 44 years old, was born
and raised here in Flint,

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Michigan, a third-generation
GM worker. I\'m an electrician

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and been president of UAW
local 651 for 6 years.

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I\'m married with four children.

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- Since the late 70\'s and early
80\'s, General Motors began

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closing its factories in Flint,
the city of its birth.

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Moving them first to Mexico
and later, to China.

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This is the Dort Highway
Complex, another site where

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10 000 people were working.
It\'s the first time I\'ve been

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on here since they tore
everything down.

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- The economic tornado that
nripped through Flint, uprooting

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GM factories and eliminating
ndozens of thousands of jobs was

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not an act of God,
but a man-made disaster.

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An unavoidable disaster we\'ve
nbeen told, if we want to follow

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the theory of globalized free
market. A market envisioned

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in the 19th century by
two friends: David Ricardo

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and Thomas Malthus.

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This is the story of how
contemporary economic

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and political interests helped
to forge a globalized market

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in the name
of 19th century ideas.

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- We\'re now in the heart
of the City of London, these are

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the streets where David Ricardo
would have walked about,

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done his business. This is where
we are standing now, right

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in front of the Royal Exchange
building, but remember,

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the Royal Exchange was
founded in 1565, almost

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200 years before David Ricardo\'s
time. And stockbrokers,

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particularly in the 17th
century, were banned because

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they were considered rather
rude and uncouth. To trace

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his history, we need to go
down the right hand side

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of the Royal Exchange building
here, down this street to some

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of the back alleys of the City
of London where Ricardo

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and the other stockbrokers met.

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- Ricardo was born in England,
studied in England. His real

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education is from the age
of 14 years old, when he starts

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working with his father
in the stock exchange.

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The stock exchange at this point
is a relatively loose, you know,

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set of people that meet
in coffee shops in Change

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Alley, so it\'s close
to the Bank of England.

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- Jonathan\'s Coffee House was set
up on this spot. And at some

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point in that last quarter
of the 1700\'s, someone carved

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the name \"stock exchange\" over
the doorway to Jonathan\'s

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Coffee house and so, the London
Stock Exchange, I guess was

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really born at that point.

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- You have to remember
that this is the period

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of the 18th century in which
England is involved in several

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global trade wars. It\'s the
mercantile center of the world.

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Although it\'s primitive in many
respects, this is the most

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modern stock exchange
in the world.

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Ricardo does very well.
We know that from an early age,

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15, 16, he\'s already trading
on the side on his own account.

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By the time he\'s 20, he\'s
already a wealthy man.

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In 1796, he\'s well off. He\'s
buying properties, he\'s spending

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time in Bath.

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In one of those stays in Bath,
in a very fancy hotel,

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he reads for the first time
\"The Wealth of Nations\"

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of Adam Smith.

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Adam Smith\'s book gets him
thinking about political economy

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in a broader sense.

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- (Quote): The produce of
the earth, all that is derived

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form its surface by the united
application of labour,

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machinery and capital is
divided among three classes

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of the community, namely:
the proprietor of the land,

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the owner of the stock
of capital necessary for

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its cultivation and the
labourers by whose industry

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it is cultivated.
David Ricardo-The Principles

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of Political Economy
and Taxation.

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-Indeed, a pessimistic vision
of
a stagnant economy, land that
is

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overpriced, unable to feed
a rapidly growing population

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and unproductive landlords
who only collect rent.

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The source of this anxiety
was this man, Thomas Malthus,

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a friend of Ricardo\'s whose
essay on population growth

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deeply influenced English
intellectuals at the time.

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- Malthus is born in 1766. Most
of his education\'s at home.

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He goes to a Unitarian type
school setting before he goes

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off to college for a little
bit of time. Then he goes

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to Cambridge.

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1798 is the famous date, this is
when he publishes his first

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essay. He doesn\'t put his name
on it. His first essay is

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called \"An Essay on Population\".

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-In his essay, Malthus
theorized
in the 19th century, how human

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population growth outpaces
its capacity to produce food.

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- So he says: \"What holds
human numbers in check?\"

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He says: \"misery and vice\".
And by misery, what he\'s talking

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about is all those things
that cause death.

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- Thomas Malthus who fancied
himself something

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of a mathematician, merely
decided that the world would be

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out of food by 1890. He blamed
reduced mortality rates.

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- But David Ricardo had
an antidote to his friend\'s

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nightmare. Like Adam Smith,
he would explore the mechanism

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for economic growth and
expansion. But unlike Smith,

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his was not a vision, but a
series of theoretical models

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meant to liberate the market
and
encourage private initiatives.

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Today, in the 21st century,
it is the World Trade

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Organization that has adapted
David Ricardo\'s ideas.

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- 60-Second Adventures
in Economics.

00:12:19.083 --> 00:12:22.041
Fear of foreign competition once
led countries to try and produce

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everything they needed and
impose heavy taxes to keep out

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foreign goods. However,
economist David Ricardo showed

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that international trade could
actually make everyone better

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off, bringing in one
of the first great economic

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models.

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- Ricardo even gave the theory
a name: \"Comparative

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Advantage\".

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The theory was born out of
a violent debate at the time

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over a high tariff on
the importation of wheat,

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then called corn. Thus keeping
the prices of bread high.

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It was Ricardo\'s way to fight
the power of local landlords,

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encourage competition
and lower the price of bread.

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- Ricardo noticed the following.
He says, look, imagine that

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England and Portugal,
each one produces two goods,

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so he says, cloth and wine.

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You see, you\'re producing two
things, I\'m producing two

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things. I\'m better at producing
this thing here, cloth.

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And you are better at producing
wine. So why should I be

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producing cloth and wine when
I can specialize, get my

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comparative advantage,
my particular advantage

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at producing cloth and produce
more cloth, so I\'ll be producing

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more than if I had specialized
in both things and then you,

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that are better off producing
wine, you specialize

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in producing wine and
you\'ll be better off.

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- By specializing, they can then
export the surpluses to each

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other and both end up better
off. This is the principle

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of comparative advantage.

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- So is Ricardo\'s theory
a magician\'s trick

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or an engine of growth
and prosperity?

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- (Quote): Foreign trade is
highly beneficial to a country.

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As it increases the amount
and variety of the objects

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on which revenue may be expended
and affords by the abundance

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and cheapness of commodities,
incentives to saving and

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to the accumulation of capital.
David Ricardo-The Principles

00:14:58.501 --> 00:15:01.999
of Political Economy
and Taxation.

00:15:52.250 --> 00:15:55.208
- Our investigation into
the theory and its adaptation

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in the 21st century
begins in Flint.

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- When I was working here for
the first time when Division 11

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was at its peak, I was probably
25, 26 years old and I think

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about the enthusiasm, not
thinking about what would happen

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20 years down the road really.
I had a secure job, loved

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my job, loved being an
electrician, loved the people.

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At that point, I was starting
to get involved more and more

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with the union. So talking
with them more and more and

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having more discussions with
management and standing up

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for their rights. So I was
really coming into it

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as things were starting
to decline. But to see weeds

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grow where we used to build
things that were in every

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General Motors vehicle it\'s
just, it\'s just terrible.

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Wow...

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-So if the magic did not work
in
Flint, it supposedly should
work

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in Mexico,
General Motors\' new home.

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But the magic does not work
everywhere. In the Mexican

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countryside, free trade is not
seen as promise, but as

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a threat, with the opening of
nthe country to cheaper US corn.

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But how did Ricardo reconcile
the reality of seeking cheap

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labour and new markets with his
vision of a win-win for all?

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- There are two important causes
that are made explicit in

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Ricardo\'s book. One:
everybody that loses a job

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in the production of cloth
in Portugal has to get a job

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in the production of wine
in Portugal and vice-versa

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in England. So everybody that
was producing wine has to get

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a job producing cloth. So,
there is an intrinsic assumption

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that people can find jobs.

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Ricardo, very explicitly
says no capital mobility.

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So, you have to assume that
the capitalist is deciding

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to produce the cloth because
you\'re good here, because

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you have the technology, doesn\'t
have the following idea.

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Wait a second. They don\'t
produce anything they have very

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low wages. They are willing to
work for peanuts. What if I take

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my technology here and move
it to the other country

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and produce from there
and just sell it here?

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♪ The city of Flint salutes you
To General Motors we raise

00:20:16.334 --> 00:20:17.541
our voices all ♪
- So GM leaving Flint had

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nothing to do with free trade
or David Ricardo, but
everything

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to do with a search
for cheaper labour.

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- The notion of free trade is all
about this favouring certain

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particular groups. Those are
fundamentally big corporations

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that have become financial
conglomerates, so they can

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switch very fast from one area
to another area and whatnot. So,

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from that point of view, it\'s a
certain model of society which

00:21:07.125 --> 00:21:09.958
is sold to the public, not just
with the rhetoric of free and

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freedom and whatnot, but also
with the rhetoric of scientific

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knowledge.

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- So what is the real history
of free trade once we remove

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the rhetoric of science
and the veil of Ricardo\'s

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concept of comparative
advantage?

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- The global free market was
created by imperialism,

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created by gunboats, created
by cannons, British cannons.

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- Without these gunboats and
cannons and colonization,

00:21:43.292 --> 00:21:48.292
Britain couldn\'t create
markets for its own products.

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- No gunboats today, but ships
loaded with goods produced

00:22:03.250 --> 00:22:06.500
in Southern China on their way
to the world\'s markets.

00:22:06.501 --> 00:22:10.501
Testimony to China\'s
growing economic strength.

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But these kids are not here
to see the ships, but the
museum

00:22:14.584 --> 00:22:18.833
that stands nearby
commemorating
the naval battle that took
place

00:22:18.834 --> 00:22:23.416
here only 15 years after
David Ricardo\'s death.

00:22:23.417 --> 00:22:26.709
Free trade by
the power of a gun.

00:22:34.876 --> 00:22:37.625
It was called The Opium War
and for its anniversary,

00:22:37.626 --> 00:22:40.041
the Chinese government
even commissioned a film

00:22:40.042 --> 00:22:42.292
to commemorate it.

00:22:54.667 --> 00:22:57.291
- In the late 18th century,
the British tried to sell cotton

00:22:57.292 --> 00:23:03.292
textile and wool textile
first and both failed.

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First of all, the trading area
in China is relatively warm,

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so the wool doesn\'t work and
then China has more advanced

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textile industry.

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- The only way England could
balance trade with the Chinese

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was fundamentally through guns
and boats and selling them

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opium.

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So it\'s generating a need for
this opium, generating actually

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the enslavement, if you want,
of people in a sense

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with the drug
and so on and so forth.

00:23:46.167 --> 00:23:50.999
So that\'s the history
of how free trade developed.

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- The rapid rise of addiction
in China alarmed the emperor.

00:24:03.999 --> 00:24:08.458
He ordered his commissioner
Lin Zexu to ban opium sale,

00:24:08.459 --> 00:24:12.999
destroy the existing opium
and arrest the merchants.

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The ball was now
in Queen Victoria\'s court.

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- If I were in Lin Zexu\'s
position, I would also burn

00:24:22.626 --> 00:24:25.998
all the opium. But now,
it\'s not the opium issue.

00:24:25.999 --> 00:24:30.998
Nor the issue of the lives and
properties of a few merchants.

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If all nations follow China\'s
example and reject free trade,

00:24:35.083 --> 00:24:39.998
the British Empire will no
longer exist within a year.

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This is the reason
for us to use force.

00:24:47.292 --> 00:24:50.998
- The British Navy went to war,
defeating the technologically

00:24:50.999 --> 00:24:53.918
inferior Chinese army.

00:24:59.584 --> 00:25:02.374
China was forced to open more
trading posts for foreign

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merchants and secede the island
of Hong Kong to Britain.

00:25:06.999 --> 00:25:10.292
All in the name of free trade.

00:25:11.918 --> 00:25:14.625
- The situation of the creation
of a global free market

00:25:14.626 --> 00:25:18.998
for imperialism through guns,
through cannons, is very similar

00:25:18.999 --> 00:25:24.333
to the globalization that we see
in the last 20, 30 years. Now,

00:25:24.334 --> 00:25:28.666
the standard story of course is
that everybody is dying to get

00:25:28.667 --> 00:25:31.998
the global free market and
then after that, everybody can

00:25:31.999 --> 00:25:34.541
exploit the comparative
advantage and enjoy the free

00:25:34.542 --> 00:25:36.458
market and things like that.
But if you look back to

00:25:36.459 --> 00:25:39.625
the actual history of the rise
of the global free market,

00:25:39.626 --> 00:25:42.709
in the last 20, 30 years,
it is not so.

00:26:06.542 --> 00:26:09.791
-Claire Motel is a refugee
whose
plight was caused by so-called

00:26:09.792 --> 00:26:14.708
free trade. No gunboats were
involved only international

00:26:14.709 --> 00:26:16.709
loans.

00:27:03.334 --> 00:27:06.666
Claire Motel was once a rice
nproducer here in the Artibonite

00:27:06.667 --> 00:27:11.709
region, but was forced
to abandon her land.

00:28:08.000 --> 00:28:11.791
The demand to liberalize
Haiti\'s
market and those of many other

00:28:11.792 --> 00:28:15.918
developing nations came
from Washington.

00:28:16.918 --> 00:28:19.082
It was a condition for a loan
nfrom the International Monetary

00:28:19.083 --> 00:28:22.998
Found, an organization
established after the Second

00:28:22.999 --> 00:28:26.416
World War to promote among
others, Ricardo\'s ideas

00:28:26.417 --> 00:28:30.709
of free trade
to generate growth.

00:28:39.501 --> 00:28:42.583
- The allies have barely landed
at Normandy when the idea

00:28:42.584 --> 00:28:48.709
of a monetary fund began to move
rapidly from concept to reality.

00:28:49.501 --> 00:28:52.500
The idea was that by working
together to increase world

00:28:52.501 --> 00:28:56.625
economic welfare, nations would
also increase the chance

00:28:56.626 --> 00:29:01.416
of political peace. With war
still raging, the foundation was

00:29:01.417 --> 00:29:05.999
laid for an international
monetary fund.

00:29:09.375 --> 00:29:13.583
- From the 1950\'s and
particularly during the 1960\'s,

00:29:13.584 --> 00:29:17.249
many countries became
independent, countries that

00:29:17.250 --> 00:29:20.666
we now call developing countries
or emerging markets, began

00:29:20.667 --> 00:29:24.208
to have stronger growth
prospects. They tried to borrow

00:29:24.209 --> 00:29:27.998
in order to finance
the investments they needed

00:29:27.999 --> 00:29:31.083
and then they started
to run into trouble.

00:29:32.751 --> 00:29:35.791
- When countries face economic
crises or want to prevent them,

00:29:35.792 --> 00:29:39.374
they can turn to the IMF
for advice and loans to help

00:29:39.375 --> 00:29:41.998
put out their fire
and restore stability.

00:29:41.999 --> 00:29:44.998
Any member of the IMF,
be it rich, middle income

00:29:44.999 --> 00:29:49.291
or poor can ring the bell to ask
for a loan. These loans come

00:29:49.292 --> 00:29:52.374
in various shapes and sizes,
they\'re cheaper than other

00:29:52.375 --> 00:29:55.708
sources and are tailored
to specific needs.

00:29:55.709 --> 00:29:56.998
- They came in and said:
\"Alright, we\'ll give you

00:29:56.999 --> 00:30:01.458
bridge loans, we\'ll help you
pay, restructure your debt,

00:30:01.459 --> 00:30:04.709
but there will be conditions.

00:30:06.334 --> 00:30:11.124
The conditions were essentially
those of extreme free market

00:30:11.125 --> 00:30:16.249
ideology and opening
the country to outright pillage

00:30:16.250 --> 00:30:19.918
by transnational corporations.

00:30:20.584 --> 00:30:23.583
- Look, don\'t give me a hard luck
story, I hear them every day,

00:30:23.584 --> 00:30:31.584
and quite frankly, they bore me.
The facts are simple: in 1973,

00:30:33.999 --> 00:30:39.998
this bank gave you a loan and
you still haven\'t paid it back.

00:30:39.999 --> 00:30:42.124
- If these countries get into
trouble and can\'t make their

00:30:42.125 --> 00:30:46.625
payments to the external
creditors, should you let them

00:30:46.626 --> 00:30:50.124
fall, which is what they did
in the interwar period between

00:30:50.125 --> 00:30:52.708
World War I and World War II,
and that was very bad,

00:30:52.709 --> 00:30:57.208
or do you bring in a more
multinational body based on a

00:30:57.209 --> 00:31:02.998
ideally rules-based system to
manage the renegotiation of

00:31:02.999 --> 00:31:05.998
debts and to help put the
country on a more sustainable

00:31:05.999 --> 00:31:08.917
path?
- Times are tough and we\'re all

00:31:08.918 --> 00:31:15.249
having to clamp down.
And don\'t look at me like that,

00:31:15.250 --> 00:31:20.709
this is a bank, not a charity.

00:31:27.999 --> 00:31:30.998
- In Ghana, as in Haiti, loans
to alleviate the country\'s

00:31:30.999 --> 00:31:33.917
debt were given on condition
of opening up the country\'s

00:31:33.918 --> 00:31:37.833
economy to foreign investment.
The program even has a neutral

00:31:37.834 --> 00:31:42.292
name: Structural
Adjustment Program.

00:31:44.584 --> 00:31:48.917
- This market shows to you the
mass unemployment that exists

00:31:48.918 --> 00:31:50.958
in Ghana. You see it across
the street, everywhere.

00:31:50.959 --> 00:31:55.374
People are selling goods
and services, it becomes part

00:31:55.375 --> 00:31:57.918
of the informal sector.

00:32:03.999 --> 00:32:09.208
Rice of Thailand, American rice,
Vietnamese rice... this is rice

00:32:09.209 --> 00:32:13.583
that we are now importing.
So, this is what happens

00:32:13.584 --> 00:32:16.875
when you liberalize the economy.
Cheap importation of these goods

00:32:16.876 --> 00:32:20.998
and services coming in
at the expense of local

00:32:20.999 --> 00:32:23.292
manufacturing business.

00:33:17.709 --> 00:33:22.416
- Liberalizing your economy
meant to open up your market

00:33:22.417 --> 00:33:25.708
to foreign interest. Therefore,
most of the industries

00:33:25.709 --> 00:33:29.875
that you see around us were
either sold off to foreign

00:33:29.876 --> 00:33:32.249
private investors
or were knocked down

00:33:32.250 --> 00:33:34.999
and new buildings were built.

00:34:56.626 --> 00:34:58.998
- When you live through it,
you don\'t realize it,

00:34:58.999 --> 00:35:03.374
but later, looking back,
you know I\'ve lived through

00:35:03.375 --> 00:35:08.958
one of the most rapid social
economic transformations

00:35:08.959 --> 00:35:10.999
in human history.

00:35:20.834 --> 00:35:24.998
I\'ve realized that the economic
transformation that I have

00:35:24.999 --> 00:35:31.998
seen in my 40-odd years of life
is equivalent to what happened

00:35:31.999 --> 00:35:36.583
in England between now
and the time of George III.

00:35:36.584 --> 00:35:42.501
That was when the United States
were still a British colony.

00:35:54.083 --> 00:35:58.998
This transformation was
achieved through what is known

00:35:58.999 --> 00:36:03.292
as \"Infant Industry Protection\".

00:36:08.584 --> 00:36:10.708
- Visitors in the museum pass
in front of life-size wax

00:36:10.709 --> 00:36:14.791
figures of South Korea\'s
architects of
industrialization.

00:36:14.792 --> 00:36:18.249
All military figures who built
nthe country\'s first steel mill,

00:36:18.250 --> 00:36:21.918
the key to its
industrialization.

00:36:34.375 --> 00:36:37.291
The project was rejected by
the World Bank and
international

00:36:37.292 --> 00:36:40.999
investors as overly ambitious
and impossible for a poor

00:36:41.000 --> 00:36:44.083
ncountry like Korea at the time.

00:36:46.667 --> 00:36:50.998
Yet Korea found alternative
financing. The company was

00:36:50.999 --> 00:36:55.918
established as state-owned and
was headed by an army general.

00:36:57.417 --> 00:37:02.501
Today, Posco is the world\'s
third largest steel mill.

00:37:04.999 --> 00:37:08.583
- This is a direct affront
to standard economic theory.

00:37:08.584 --> 00:37:13.833
I mean, this project went
against almost every known

00:37:13.834 --> 00:37:18.918
doctrine in standard economics.

00:37:30.292 --> 00:37:35.708
Not a single case in history
in which countries achieve

00:37:35.709 --> 00:37:38.292
development through
that process.

00:37:41.792 --> 00:37:43.583
- I\'m Amy Goodman here
with Juan Gonzales.

00:37:43.584 --> 00:37:46.917
- As people around the world
continue to protest the soaring

00:37:46.918 --> 00:37:49.958
prices of basic food items,
the World Food Program has

00:37:49.959 --> 00:37:52.416
described the crisis
as a \"silent tsunami\".

00:37:52.417 --> 00:37:56.041
- In its report, the UN faulted
the so-called liberalization

00:37:56.042 --> 00:37:59.999
program for gutting
agricultural production.

00:38:00.375 --> 00:38:02.998
Developing countries did not
only fail to industrialize,

00:38:02.999 --> 00:38:07.918
they lost their capacity
to feed their people.

00:38:08.167 --> 00:38:11.583
- Nowhere is this perhaps more
clear than in the case of Haiti.

00:38:11.584 --> 00:38:15.583
30 years ago, Haiti had all
the rice it needed, then

00:38:15.584 --> 00:38:18.998
in 1986, Haiti turned to the IMF
for a loan. Now after cutting

00:38:18.999 --> 00:38:22.625
tariff protection on local
rice, Haiti imports most

00:38:22.626 --> 00:38:24.458
of its rice from
the United States, which

00:38:24.459 --> 00:38:27.292
in turn remains
heavily subsidized.

00:38:31.042 --> 00:38:35.998
- Since 1981, the United States
has followed a policy that

00:38:35.999 --> 00:38:38.541
we rich countries who produce
a lot of food should sell it

00:38:38.542 --> 00:38:42.124
to poor countries and relieve
them of the burden of producing

00:38:42.125 --> 00:38:44.998
their own food. So thank
goodness, they can leap directly

00:38:44.999 --> 00:38:48.918
into the industrial era.
It has not worked.

00:38:51.626 --> 00:38:54.208
It may have been good for some
of our farmers in Arkansas,

00:38:54.209 --> 00:38:55.998
but it has not worked.

00:38:55.999 --> 00:38:59.998
It was a mistake. It was
a mistake that I was a party to.

00:38:59.999 --> 00:39:03.166
I am not pointing the finger
at anybody. I did that, I have

00:39:03.167 --> 00:39:05.958
to live every day with
the consequences of the loss

00:39:05.959 --> 00:39:11.292
capacity to produce a rice crop
in Haiti to feed those people.

00:39:25.709 --> 00:39:29.416
- His theory has been used and
abused over centuries, so why

00:39:29.417 --> 00:39:32.374
did David Ricardo come up
with an economic assumption,

00:39:32.375 --> 00:39:35.999
which can hardly
if ever be fulfilled?

00:39:37.000 --> 00:39:40.082
- In every economy for the last
1000 years, you have had one

00:39:40.083 --> 00:39:44.333
set of economists representing
the financial sector and one

00:39:44.334 --> 00:39:48.998
set representing the national
interests of industry

00:39:48.999 --> 00:39:50.999
and agriculture.

00:39:52.042 --> 00:39:55.666
Ricardo was the spokesmen
for British bankers. Today,

00:39:55.667 --> 00:39:58.083
we\'d call him a bank lobbyist.

00:40:02.501 --> 00:40:04.998
He had the following problem:
in his day, people were

00:40:04.999 --> 00:40:08.998
pointing to the fact that three
quarters of Britain\'s budget,

00:40:08.999 --> 00:40:13.291
after the Napoleonic wars went
to pay interest to bondholders.

00:40:13.292 --> 00:40:16.583
And there were arguments
against foreign loans.

00:40:16.584 --> 00:40:19.998
So, Ricardo had the same
argument that the subsequent

00:40:19.999 --> 00:40:23.666
post-classical economists had.
He said: \"Let\'s not look

00:40:23.667 --> 00:40:27.416
at that at all. I\'m going
to create a view of the economy

00:40:27.417 --> 00:40:30.998
as if the whole economy worked
on barter, without any debt

00:40:30.999 --> 00:40:37.083
at all, as if there was no money
and money is only a veil.\"

00:41:36.167 --> 00:41:38.998
-The impact of free trade in
the 21st century might have
been

00:41:38.999 --> 00:41:43.333
less dramatic had it not been
for David Ricardo\'s fight

00:41:43.334 --> 00:41:44.750
to free labour.

00:41:44.751 --> 00:41:47.750
Until the early 19th century,
workers could not move from

00:41:47.751 --> 00:41:51.333
place to place searching for
work and selling their labour.

00:41:51.334 --> 00:41:55.500
David Ricardo was determined to
change all that. For this
fight,

00:41:55.501 --> 00:41:59.999
he was joined by his friend
Thomas Robert Malthus.

00:42:07.542 --> 00:42:10.541
Port-au-Prince, the Haitian
capital could be described as

00:42:10.542 --> 00:42:15.999
Malthusian nightmare, very much
like English cities of his
time.

00:42:17.751 --> 00:42:20.833
But on the 18th century,
impoverished former peasants

00:42:20.834 --> 00:42:24.041
could get state assistance
through their local parish.

00:42:24.042 --> 00:42:27.292
Thomas Malthus was furious.

00:42:28.292 --> 00:42:32.291
- What it\'s doing, it\'s allowing
people who can\'t provide

00:42:32.292 --> 00:42:35.998
for themselves and their
children to actually get

00:42:35.999 --> 00:42:41.458
married and have children.
It\'s also ruining their

00:42:41.459 --> 00:42:43.709
motivation to work.

00:42:47.083 --> 00:42:52.292
- David Ricardo, who was by now
a member of Parliament agreed.

00:42:53.959 --> 00:42:57.333
He demanded that wages, like
all
other contracts should be left

00:42:57.334 --> 00:43:00.833
to the fair and free
competition
of the market and should never

00:43:00.834 --> 00:43:02.958
be controlled
by the interference

00:43:02.959 --> 00:43:05.292
of the legislature.

00:43:06.751 --> 00:43:11.083
In other words, subsidies to
the poor corrupt market laws.

00:43:15.292 --> 00:43:17.583
- In 1832, they have a commission
to come up with a new set

00:43:17.584 --> 00:43:19.998
of poor laws, a national
commission and the poor law

00:43:19.999 --> 00:43:26.875
amendment takes place in 1834.
And it does take into

00:43:26.876 --> 00:43:29.791
consideration the criticisms
of both Malthus and Ricardo.

00:43:29.792 --> 00:43:35.998
And the idea is: \"We\'ll build
workhouses and the conditions

00:43:35.999 --> 00:43:40.458
in the workhouse ought to be
poorer than the conditions

00:43:40.459 --> 00:43:45.083
for the poorest worker
who isn\'t in a workhouse.

00:43:54.626 --> 00:43:57.374
- Paupers entering the workhouse
really was the last resort

00:43:57.375 --> 00:44:01.917
for them. Previously, prior to
the 1834 poor law amendment act,

00:44:01.918 --> 00:44:06.998
those in need would have had
outdoor relief and they resided

00:44:06.999 --> 00:44:09.541
in their homes. Now they were
compelled to come

00:44:09.542 --> 00:44:12.918
to the workhouse and
work for their living.

00:44:16.375 --> 00:44:20.501
- Step still and listen
to what I have to tell you.

00:44:20.999 --> 00:44:24.708
First off, you\'re all going
to your admittance process.

00:44:24.709 --> 00:44:28.998
Anything you brought with you
will be taken away. Then,

00:44:28.999 --> 00:44:32.958
you will be stripped and washed.
Once you\'re clean, you\'ll be

00:44:32.959 --> 00:44:38.999
given your workhouse uniform.
It is not your property.

00:44:46.375 --> 00:44:48.998
- Charles Dickens, in the middle
part of the 19th century, is

00:44:48.999 --> 00:44:52.291
writing about workhouses.
And the workhouses he has

00:44:52.292 --> 00:44:58.249
in mind are the ones that came
into play after that 1834

00:44:58.250 --> 00:45:00.501
revision of the law.

00:45:04.709 --> 00:45:09.666
- Gentlemen, it is my considered
opinion that our charity

00:45:09.667 --> 00:45:13.041
is being presumed upon.
- Hear, hear.

00:45:13.042 --> 00:45:16.875
- It did have a big impact,
I think, if you think in terms

00:45:16.876 --> 00:45:21.416
of labour. Finally British
society becomes a true market

00:45:21.417 --> 00:45:27.666
society. Labour is freed up
along now with land and capital.

00:45:27.667 --> 00:45:32.998
Workers need to find work.
Their wage level is determined

00:45:32.999 --> 00:45:38.791
by market forces. They can move,
there is no longer any easy

00:45:38.792 --> 00:45:45.041
subsidy and you\'ve got your
true capitalist market society.

00:45:45.042 --> 00:45:50.709
And in some ways, both Ricardo
and Malthus played a role.

00:45:53.834 --> 00:45:56.833
-There\'s no need to imagine
the impact of labour being
freed

00:45:56.834 --> 00:46:03.124
up in 19th century English
society. China today is as
close

00:46:03.125 --> 00:46:05.501
as one can get.

00:46:05.999 --> 00:46:10.541
- China over the last 30 or 40
years. If you think about it,

00:46:10.542 --> 00:46:15.541
30 years ago, the vast majority
of the population lived in rural

00:46:15.542 --> 00:46:21.500
places, basically a peasantry.
Where did you get over the last

00:46:21.501 --> 00:46:27.124
really 20 to 25 years, this huge
workforce that now exists

00:46:27.125 --> 00:46:30.501
in all your southern coastal
cities in China?

00:46:39.999 --> 00:46:43.958
If you have a hugely rural
population, where the vast

00:46:43.959 --> 00:46:47.875
majority of people were
agriculturalists and you had

00:46:47.876 --> 00:46:52.166
communal ownership of land and
then you made land private

00:46:52.167 --> 00:46:56.500
property, even if you initially
divided up the land and gave

00:46:56.501 --> 00:47:01.500
everyone a piece of land, quite
soon you would have some people

00:47:01.501 --> 00:47:05.998
losing their land and other
people gaining more lands.

00:47:05.999 --> 00:47:08.998
So you\'d quickly have large land
owners and small land owners

00:47:08.999 --> 00:47:12.791
and then you would have quickly
a large landless population.

00:47:12.792 --> 00:47:17.292
That again, became
a potential workforce.

00:47:21.999 --> 00:47:23.998
- A workforce that, thanks
to David Ricardo and

00:47:23.999 --> 00:47:28.124
Thomas Malthus, has been freed
to move in search of jobs,

00:47:28.125 --> 00:47:31.999
selling their labour
in a globalized marketplace.

00:47:33.918 --> 00:47:36.998
- They left the village
and flooded to the city.

00:47:36.999 --> 00:47:42.750
They changed their situation
from being peasants in a very

00:47:42.751 --> 00:47:48.500
traditional rural setting
to being workers in a global

00:47:48.501 --> 00:47:50.709
capitalist system.

00:48:03.501 --> 00:48:06.500
- A global labour force allowed
GM to open factories in China

00:48:06.501 --> 00:48:10.999
and in Mexico, leaving workers
in Flint who could not compete

00:48:11.000 --> 00:48:13.709
with nowhere to go.

00:48:17.999 --> 00:48:20.124
- We are now entering
the neighbourhood that I lived

00:48:20.125 --> 00:48:23.500
in, in the early 80\'s when
I first started practicing

00:48:23.501 --> 00:48:25.709
law here in Flint.

00:48:29.250 --> 00:48:32.998
This neighbourhood has houses
that were built by General

00:48:32.999 --> 00:48:36.666
Motors when it was bringing up
workers to the area for their

00:48:36.667 --> 00:48:39.666
factories.

00:48:39.667 --> 00:48:43.541
There\'s nobody to buy these
houses and there\'s no money

00:48:43.542 --> 00:48:48.998
to tear them down. And so bit
by bit, the neighbourhoods

00:48:48.999 --> 00:48:53.083
become emptier and sadder.

00:48:54.542 --> 00:48:59.875
-Flint is a Ricardian
nightmare.
nFirst, General Motors left town

00:48:59.876 --> 00:49:02.750
in search of cheap labour,
twisting Ricardo\'s concept

00:49:02.751 --> 00:49:08.416
of free trade. Secondly,
in a modern adaptation

00:49:08.417 --> 00:49:11.333
of his and Thomas Malthus\'
debate about the poor laws,

00:49:11.334 --> 00:49:14.833
the State of Michigan has
begun eliminating some

00:49:14.834 --> 00:49:17.918
of the subsidies given
to the poor.

00:49:20.792 --> 00:49:22.625
- On Wednesday,
the Republican-controlled

00:49:22.626 --> 00:49:24.998
Senate passed a house bill
that puts a 48-month-cap

00:49:24.999 --> 00:49:27.625
on State welfare benefits.
Democratic Senator

00:49:27.626 --> 00:49:31.625
Gretchen Whitmer says: \"Another
tool for the disadvantaged

00:49:31.626 --> 00:49:32.958
has been taken away\".

00:49:32.959 --> 00:49:34.750
- We\'ve got too many kids
in poverty as it is,

00:49:34.751 --> 00:49:36.833
and that\'s not how
you move a State forward.

00:49:36.834 --> 00:49:38.875
- For the last 6 months,
our organization has been

00:49:38.876 --> 00:49:41.791
challenging a policy
of the Michigan department

00:49:41.792 --> 00:49:48.041
of Human Services that has cut
over 30 000 people off of public

00:49:48.042 --> 00:49:52.166
assistance. They basically
decided that: \"We\'re not going

00:49:52.167 --> 00:49:54.999
to focus on who do we help and
what does it take to get them

00:49:55.000 --> 00:49:58.333
out of poverty.\" But instead:
\"How much money are we going

00:49:58.334 --> 00:50:02.791
to save and who can we go after
to make it impossible for them

00:50:02.792 --> 00:50:03.833
to get help?\"

00:50:03.834 --> 00:50:08.249
- Without the help of the State,
my kids will be going hungry.

00:50:08.250 --> 00:50:13.166
And I ain\'t gonna allow that.

00:50:13.167 --> 00:50:16.166
- So we have these notions that
came out in the context

00:50:16.167 --> 00:50:20.998
of that Malthusian/Ricardo
discussion of poor laws

00:50:20.999 --> 00:50:26.998
that has really not ended. And
it has to do, to some extent,

00:50:26.999 --> 00:50:32.208
with how much power should
labour have and to the extent

00:50:32.209 --> 00:50:36.166
that your safety net is high,
to the extent that you have

00:50:36.167 --> 00:50:38.625
minimum wages that actually
provide living wages,

00:50:38.626 --> 00:50:45.333
you\'re empowering labour, aren\'t
you? And that\'s often viewed

00:50:45.334 --> 00:50:50.500
as being problematic
in the context of larger

00:50:50.501 --> 00:50:52.709
global capitalism.

00:50:53.751 --> 00:50:58.998
-David Ricardo died on
September
n11th 1822. He was only 52 years

00:50:58.999 --> 00:51:05.998
old. Only a few visit his grave
in rural England. Only few

00:51:05.999 --> 00:51:09.833
of the general public even know
who he is. Yet in his name,

00:51:09.834 --> 00:51:12.998
an entire globe has been
transformed, creating

00:51:12.999 --> 00:51:17.709
unimaginable wealth,
but also huge destruction.

00:51:58.918 --> 00:52:01.999
- David Ricardo and Thomas
Malthus helped to restructure

00:52:02.000 --> 00:52:05.998
society according
to the logic of the market.

00:52:05.999 --> 00:52:10.875
But society soon rebelled giving
birth to a powerful new voice

00:52:10.876 --> 00:52:14.999
and a new understanding
of the logic of capital.