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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- Dawn in Nanjing, China\'s last
surviving communist commune.

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On the surface, a time warp
complete with revolutionary

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posters and radio-news
piped into the main square.

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But the community claims
it rediscovered Marx\'s values

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as a defence against
China\'s roaring capitalism.

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London\'s financial center;
Marx is unexpectedly being

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rediscovered here as well.

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- And all Marx and Engels\'
warning of the dangers

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of monopoly capitalism and
concentrated finance have

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come to pass.

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- And we thought
he was gone forever.

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- With the collapse of the Soviet
Union and the fall of communism,

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that system of government was
consigned to the dustbin

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of history and Marx was
thrown out along with it.

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- So it is possible
that we misread Marx?

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Is it possible that his insight
into 19th century capitalism

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has more relevance now
than in past decades.

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- Carl Marx\'s house in Trier,
Germany, besieged by Chinese

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tourists.

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- Karl Marx was born in 1818
in the Rhineland, which is

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the westernmost
province of Prussia.

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It was an interesting part
of the Greater Germany because

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it had been occupied by
Napoleon. And so, it\'d been

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initiated in the ideas
of the French Enlightenment.

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And that was a milieu
in which he was raised.

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- \"I can feel no regret\", wrote
na young woman to her loved one.

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\"I shut my eyes very tightly.
Once again, I lay close

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to your heart, drunk
with love and joy.\"

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A romantic love letter like
so many others. The innocence

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of the early 19th century
in a provincial German town.

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The only difference is that
the man the letter was
addressed

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to was Karl Marx.

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- In Trier, he met
Jenny von Westphalen.

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She was quite a catch
for Marx because he was the son

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of a Jewish lawyer and was,
by such, a social outcast.

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She was the daughter
of a Prussian baron.

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- So he got educated in Trier
and then he went to Berlin.

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I guess the expectation was that
he\'d go to college and be

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a good boy and learn law
or something like that.

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He was politically very much
engaged because there were

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all these kind of questions
of after the French Revolution,

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would there be a sort of liberal
democracy? What was going

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to happen to the autocratic
regimes in Germany and so on?

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He was kind of mixed
up in all of that.

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- More than a century later,
nthe romantic student from Trier

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had been transformed into the
menace of western governments

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and capitalist countries.

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- Captain Capitalism!
- Ah, making out the old

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Christmas list, I see. Let\'s
see here: world peace, an end

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to world hunger, free
healthcare. This isn\'t

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a Christmas list, son. Who
the hell taught you this, child?

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-Santa did.

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- Marx had become a bogeyman,
the conspirator behind

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every social demand.

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- That red suit gives
you away, Karl!

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- Captain Capitalism! So,
you discovered my plan.

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Santa Claus is truly I,
Karl Marx, the undead

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founder of communism.

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- The reason for this radical
ntransformation from a promising

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young student into a dangerous
revolutionary, can be found

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in the basement of the Trier
Museum, kept in a safe.

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- In that year, Europe erupted
in popular revolts. It was

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the moment Marx had been
waiting
for after years of agitating

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nfor radical, political reforms.

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-\"A spectre is haunting
Europe\",
nopens The Communist Manifesto.\"

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The spectre of communism,
all the powers of Europe have

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entered into holy alliance
to exorcise this spectre.\"

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- Unfortunately for Marx,
he was always late in all

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of his writing and he didn\'t
publish \"The Communist

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Manifesto\" until after
the 1848 revolts had begun.

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So he couldn\'t take credit
for those, but and in fact,

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\'The Communist Manifesto\" was
sort of lost in the revolution,

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it was only rediscovered later.

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-The story behind \"The
Communist
Manifesto\" did not begin

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in the 1848 revolution,
but in Paris, 5 years earlier

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when Marx met Friedrich Engels,
the revolutionary son

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of a wealthy industrialist.

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- They met in a Paris café that
was known worldwide as being

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a place where chest masters
matched wits. Marx and Engels

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spent 10 days and 10 nights
talking and at the end

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of that time, they came
out feeling that they were

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completely in agreement
in all things. And a beautiful

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relationship was born.

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- Marx meeting Engels was,
I think, a crucial moment

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He meant somebody who was
actually engaged in working

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in the factories of Manchester
and therefore could talk

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to Marx about
the labour process.

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- \"They are worse slaves
than the Negros in America\".

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Wrote Engels. \"For they are
more
sharply watched and yet it is

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demanded of them that they
shall
live like human beings,

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shall think and feel like men.
This they can do only under

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glowing hatred towards their
oppressors, which degrades

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them as machines.\"

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- Marx went to Manchester
with Engels for a little trip

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in 1845. He saw the people
who were living in the most

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degrading conditions, who were
building this industrial future

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by working in the factories.

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He saw the families that had
been torn apart by the factory

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work. The mothers who had
to give their infants opium

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in the morning so that
they could go off to work

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and assumed that the children
are going to be drugged

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all day and they wouldn\'t
have to be cared for.

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For a man like Marx, a social,
political theorist and economic

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theorist, to go there would be
to walk right in the laboratory

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of humanity,
of industrial humanity.

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-While in 1848, \"The Communist
Manifesto\" was ignored, in
1917,

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it was the blueprint for
the Bolshevik Revolution

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and its global ambition.

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- Ever heard of Karl Marx?
In his mind, communism was born

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more than a hundred years ago.

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- Marx has now been transformed
into a global threat.

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- This is the Kremlin,
citadel of Russian communism.

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Looking closer, we see a public
display of giant portraits

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of communist leaders.

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Here was a new face, but in
the background was an old one,

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Karl Marx\'s.

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- The Marx that people
in the 20th century and

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in the 21st century ran
away from was the Marx of

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\"The Communist Manifesto\".

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That\'s the person that,
I think, capitalist governments

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and democracies and Western
governments held up as

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the person who was responsible
for communism and its atrocities

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in the 20th century.

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- So maybe we got it all wrong.
We focused so much on

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the revolutionary message
of \"The Communist Manifesto\"

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and ignored the bulk
nof the document, which analyzed

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the real revolution that
Marx wrote about: capitalism.

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- Ladies and gentlemen,
Karl Marx and Friedrich Engels

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were the first to chart
the uncompromising,

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unrelenting, compulsively
iconoclastic nature

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of capitalism. It has pitilessly
torn asunder the motley

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feudal ties that bound man
to his natural superiors,

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and has left remaining no other
nexus between man and man

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than naked self-interests,
than callous cash payments.

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And it was Marx who revealed
how capitalism would crush

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languages, cultures, traditions
even nations in its wake.

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In one word, it creates a world
after its own image, he wrote.

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I would like to suggest to you
that Marx has rarely seemed more

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relevant. Marx\'s stock
resurgence on a 150 year tip

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was how the New York Times,
the New York Times! Marked

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the 150th anniversary
of the publication

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of \"The Communist Manifesto\".

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A text which more than any
other, as they put it,

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recognized the unstoppable
wealth-creating power

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of capitalism, predicted
it would conquer the world

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and warned that this inevitable
globalization of national

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economies and cultures would
have divisive and painful

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consequences.

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- After the publication
of \"The Communist Manifesto\",

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Marx was expelled from
Continental Europe. He was

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once again a refugee, this time
arriving in London in 1849.

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- Imagine Dean Street in 1850,
the year Karl Marx and

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his family moved into
this Soho neighbourhood.

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The streets were teeming with
refugees, people who had fled

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failed revolts on the continent.
They arrived in this country,

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some with only their clothes
on their backs, many not even

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speaking the language.

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Marx and his family were among
the lucky, but all they had,

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three adults and three children,
were two rooms in an attic.

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And in those cramped quarters,
Marx tried to make sense

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of what he had just experienced
and what he saw on the streets

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around him.

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- And next door, a brand
new exhibition opened,

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right at the time Marx began
writing \"Das Kapital\".

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An exhibition celebrating
the achievements

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of the Industrial Revolution.

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- It was a triumph of industry.
Man\'s greatest achievements

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were on display and so this
was the dawn of a new era.

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King Capitalism was
on the throne, and yet Marx

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up in his garret was busily
scribbling why the system would

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never work. Yes, it produced
wonders, but it would also

00:14:46.999 --> 00:14:49.292
produce great destruction.

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- I teach Marx and the question
I always ask is: what can

00:15:17.834 --> 00:15:22.208
we learn from Marx and what do
we have to do for ourselves?

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And I think that\'s a very
important question to ask

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because very frequently
in the past, people have read

00:15:31.999 --> 00:15:35.249
their Marx and then sort
of plugged reality into it

00:15:35.250 --> 00:15:37.833
and then said: Ah here\'s
the answer. I don\'t think

00:15:37.834 --> 00:15:41.082
you can do that. I think there\'s
only a limited set of things

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we can learn from Marx.
Paradoxically, we can\'t really

00:15:45.626 --> 00:15:49.333
learn that much about socialism
or communism or the future

00:15:49.334 --> 00:15:55.709
from Marx. We can learn a great
deal about how capital works.

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- (Quote): The wealth
of societies in which capital

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modes of production prevail,
presents itself as an immense

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accumulation of commodities.
Our investigation must therefore

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begin with the analysis
of a commodity.

00:16:13.292 --> 00:16:17.292
Karl Marx, \"Das Kapital\",
Volume 1.

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- Tom? Tom, what do you
want for breakfast?

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- What did you say?
- What do you want for breakfast?

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-I don\'t care.

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- (Quote): A commodity is
in the first place, an object

00:16:39.876 --> 00:16:44.833
outside of us. A thing that
by its properties satisfies

00:16:44.834 --> 00:16:46.998
human wants.

00:16:46.999 --> 00:16:48.541
\"Das Kapital\"

00:16:48.542 --> 00:16:52.374
- While she gets Tom\'s breakfast,
let\'s take a closer look

00:16:52.375 --> 00:16:57.374
at that pan. The iron ore for
that pan came from the Mesabi

00:16:57.375 --> 00:17:00.998
Range. So let\'s start there
and see what happens.

00:17:00.999 --> 00:17:05.583
Maybe it\'ll give us an idea
of just what it is we have.

00:17:05.584 --> 00:17:09.416
- Now what Marx does in Volume 1
of Kapital is have a little

00:17:09.417 --> 00:17:12.583
section called the \"Fetishism
of Commodities\" and what it

00:17:12.584 --> 00:17:17.041
basically means is that our
daily experience doesn\'t

00:17:17.042 --> 00:17:21.249
actually tell us or give us
all the information we need

00:17:21.250 --> 00:17:23.999
to understand how
a system is working.

00:17:25.292 --> 00:17:28.833
Our daily experience is
we take some money and we buy

00:17:28.834 --> 00:17:32.416
a commodity and we take it home,
that\'s our daily experience.

00:17:32.417 --> 00:17:34.541
But that doesn\'t tell you
anything about the labour

00:17:34.542 --> 00:17:37.625
that went into the commodity. It
doesn\'t tell you anything about

00:17:37.626 --> 00:17:41.249
why it is that this commodity
costs twice as much as that

00:17:41.250 --> 00:17:43.292
commodity.

00:17:45.999 --> 00:17:47.998
And Marx is kind of saying
that the market system

00:17:47.999 --> 00:17:52.292
disguises all
of those social relations.

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- (Quote): There are many
different commodities

00:17:59.709 --> 00:18:03.998
with different use values but
they have only one common

00:18:03.999 --> 00:18:08.374
property left,
that of labour itself.

00:18:08.375 --> 00:18:09.458
\"Das Kapital\"

00:18:09.459 --> 00:18:11.208
- The Industrial Revolution,
which we conventionally date

00:18:11.209 --> 00:18:17.666
from around 1780 was founded
upon the creation of the factory

00:18:17.667 --> 00:18:21.708
system with large-scale
machinery and of course,

00:18:21.709 --> 00:18:25.124
a labour process that was very
different from that which

00:18:25.125 --> 00:18:31.999
artisans making their cabinets
and so on engaged in.

00:18:37.709 --> 00:18:40.998
This conversion and its rise of
industrial capitalism from 1780

00:18:40.999 --> 00:18:48.709
onwards was, in Marx\'s view,
a crucial transformation.

00:18:50.918 --> 00:18:53.458
- (Quote): The worker is related
to the product of labour

00:18:53.459 --> 00:18:57.998
as to an alien objet. The more
the worker spends himself,

00:18:57.999 --> 00:19:01.583
the more powerful becomes
the alien world of objects

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which he creates, the poorer
he himself, his inner world,

00:19:06.918 --> 00:19:11.501
becomes.
Karl Marx

00:19:23.125 --> 00:19:25.998
- This iPad worker, who asked
for his identity to be hidden,

00:19:25.999 --> 00:19:31.501
has been given a camera to film
his life outside the factory.

00:19:47.167 --> 00:19:50.708
Once these workers were peasants
with a connection to the land

00:19:50.709 --> 00:19:53.917
and its products. Now, they\'re
part of an assembly line.

00:19:53.918 --> 00:19:58.998
Alienation, argued Marx,
is built into the manufacturing

00:19:58.999 --> 00:20:01.709
process of commodities.

00:20:41.999 --> 00:20:44.998
- To Mark, it\'s the idea of
living labour, which is so

00:20:44.999 --> 00:20:48.998
crucial, which distinguishes him
very much from the classical

00:20:48.999 --> 00:20:53.458
political economists who saw
labour as a fact of production.

00:20:53.459 --> 00:20:56.500
They call it a factor of
production. It\'s a thing,

00:20:56.501 --> 00:21:00.124
which gets put into production
and produces something.

00:21:00.125 --> 00:21:02.918
To Marx it\'s not,
it\'s a process.

00:21:06.876 --> 00:21:10.458
I used to teach an introductory
geography class and the first

00:21:10.459 --> 00:21:13.166
lesson, I would say: Can you
tell me where your breakfast

00:21:13.167 --> 00:21:14.875
came from today?

00:21:14.876 --> 00:21:18.999
- Come on, Bernie,
time for breakfast!

00:21:19.709 --> 00:21:21.875
- They would say, well,
I went to the cafeteria.

00:21:21.876 --> 00:21:23.998
I\'d say okay, but where did it
come from? Well, I went to

00:21:23.999 --> 00:21:27.249
the supermarket. Where did it
come from? Where did it come

00:21:27.250 --> 00:21:29.709
from? Where did it come from?

00:21:30.999 --> 00:21:32.998
After a little while, I\'d get
them to go back and start

00:21:32.999 --> 00:21:35.998
to think about the person
cutting sugarcane

00:21:35.999 --> 00:21:38.583
in the Dominican Republic
and that sugar gets on your

00:21:38.584 --> 00:21:40.998
breakfast table and you have
a relationship with that person

00:21:40.999 --> 00:21:44.082
who\'s cutting the sugarcane.
But the market doesn\'t tell you

00:21:44.083 --> 00:21:47.292
anything about that,
it disguises all of that.

00:21:50.959 --> 00:21:53.998
- A lush countryside in India
hides what Marx saw as another

00:21:53.999 --> 00:21:57.998
characteristic of market
expansion: the transformation

00:21:57.999 --> 00:22:02.501
more and more of life
into commodities.

00:22:15.292 --> 00:22:17.124
This group of cotton growers
banded together to fight

00:22:17.125 --> 00:22:22.999
the invasion of their fields
by genetically modified seeds.

00:22:23.999 --> 00:22:28.249
- Seed in India has been
recognized as the source

00:22:28.250 --> 00:22:34.709
of life and the very word
\"Bija\", \"Ja\" is life.

00:22:36.501 --> 00:22:42.709
Every ritual is about
keeping seed forever.

00:22:53.167 --> 00:22:55.708
- Those seeds have now been
ngenetically engineered and made

00:22:55.709 --> 00:22:59.750
into a commodity which farmers
are encouraged to buy annually

00:22:59.751 --> 00:23:02.999
with the promise
of higher yield.

00:23:10.334 --> 00:23:14.166
- Biotechnology answering
the world\'s call for a better

00:23:14.167 --> 00:23:16.918
future today.

00:23:21.999 --> 00:23:24.998
-For some of these women,
the new promise of the
commodity

00:23:24.999 --> 00:23:29.124
of seeds turned into
a nightmare. Genetically

00:23:29.125 --> 00:23:32.041
engineered seeds, which needed
to be purchased every year,

00:23:32.042 --> 00:23:35.292
pushed their husbands into debt.

00:23:36.417 --> 00:23:39.500
- So they always borrow
to get the seed on credit.

00:23:39.501 --> 00:23:45.041
Now the creditors take
collateral in terms of the land

00:23:45.042 --> 00:23:49.500
mortgage. So two years later,
when the farmer cannot pay

00:23:49.501 --> 00:23:54.999
back, the new moneylender,
who is the agent of the seed

00:23:55.000 --> 00:23:59.750
and chemical companies, comes
and says: your land is today

00:23:59.751 --> 00:24:01.709
mine.

00:24:27.999 --> 00:24:30.750
They don\'t tell their wives
the seed has got us into debt.

00:24:30.751 --> 00:24:32.750
When they get into debt,
they are ashamed. When they know

00:24:32.751 --> 00:24:35.998
they\'re losing the land, they\'re
shocked because the bond

00:24:35.999 --> 00:24:40.708
with the land is still vital
for the peasant culture.

00:24:40.709 --> 00:24:43.998
That\'s the day the farmers will
drink pesticide to end

00:24:43.999 --> 00:24:51.999
their lives and the figure has
now hit 260 000 suicides.

00:24:58.501 --> 00:25:01.917
It is the greed of capital
accumulation that has turned

00:25:01.918 --> 00:25:05.208
seed into something that has
to be bought every year.

00:25:05.209 --> 00:25:08.583
That has been turned into
a commodity, a consumer

00:25:08.584 --> 00:25:15.333
product and the combination
of new sources of profit

00:25:15.334 --> 00:25:17.501
for corporations.

00:25:23.626 --> 00:25:26.999
- I think that the idea of life
as a commodity really, it\'s

00:25:27.000 --> 00:25:32.292
interesting because is
a cow a commodity? Or pig?

00:25:35.999 --> 00:25:37.998
I would say they\'ve been
commodities for a very long

00:25:37.999 --> 00:25:42.541
time and we don\'t really care
about that. So, where do we draw

00:25:42.542 --> 00:25:46.082
the line? And the line may be
in human beings. I think

00:25:46.083 --> 00:25:49.791
what we really worry
about are human beings.

00:25:49.792 --> 00:25:54.998
- And we as a society might
nhave already crossed this line.

00:25:54.999 --> 00:25:57.875
- Her announcement made
headlines around the world.

00:25:57.876 --> 00:26:02.374
Angelina Jolie underwent
a double mastectomy after

00:26:02.375 --> 00:26:06.998
a genetic test showed she had
a mutated BRCA1 gene, giving her

00:26:06.999 --> 00:26:11.374
an 87% chance of getting
breast cancer. Her news put

00:26:11.375 --> 00:26:16.374
this company Myriad Genetics,
front and center. It has patents

00:26:16.375 --> 00:26:20.709
on the BRCA1 and 2 genes.

00:26:21.167 --> 00:26:24.124
- Once life is transformed into
a commodity, it is subject

00:26:24.125 --> 00:26:27.998
to market laws. Investments
in genes like those in seeds,

00:26:27.999 --> 00:26:32.998
need to be protected by patent
keeping competition away.

00:26:32.999 --> 00:26:35.917
- It\'s the system we have in this
country, the investment system

00:26:35.918 --> 00:26:37.998
we have, which many people
do think are the reason why

00:26:37.999 --> 00:26:42.458
we have been the leader
for so long in so many areas,

00:26:42.459 --> 00:26:45.501
that\'s just the way it works.

00:26:46.459 --> 00:26:48.666
- So the production of
commodities according to Marx,

00:26:48.667 --> 00:26:53.249
not only transforms life,
it changes our perceptions

00:26:53.250 --> 00:26:55.709
of nature and of ourselves.

00:26:56.542 --> 00:26:59.750
- Marx\'s theory of social change
again is a process, a process

00:26:59.751 --> 00:27:04.791
that says ideas have to change,
but if the production process

00:27:04.792 --> 00:27:07.666
doesn\'t change, then
the ideas don\'t mean anything.

00:27:07.667 --> 00:27:09.998
The production process can
change but if the ideas don\'t

00:27:09.999 --> 00:27:13.291
change, it doesn\'t mean
anything. So, it\'s

00:27:13.292 --> 00:27:14.999
the relationship between
the production process

00:27:15.000 --> 00:27:17.750
and the ideas and the social
relations and the institution

00:27:17.751 --> 00:27:21.501
arrangements and daily
life has to change.

00:27:22.876 --> 00:27:26.917
- The world congress on
industrial biotechnology and

00:27:26.918 --> 00:27:30.333
bioprocessing the world\'s
largest industrial biotechnology

00:27:30.334 --> 00:27:31.125
event.

00:27:31.126 --> 00:27:33.750
- The fetish of commodities
according to Marx masks

00:27:33.751 --> 00:27:37.416
their role in impacting social
change. Barely 60 years ago,

00:27:37.417 --> 00:27:40.998
scientific innovations were
rarely patented and never

00:27:40.999 --> 00:27:43.999
industrialized in such a way.

00:27:45.375 --> 00:27:49.998
- 1955, a year of anxiety
and triumphs. A major medical

00:27:49.999 --> 00:27:53.750
hurdle was crossed with
the discovery by Dr. Jonas Salk

00:27:53.751 --> 00:27:55.999
of the anti-polio vaccine.

00:27:56.000 --> 00:27:59.249
- 60 years ago, no one talked
about patenting the polio

00:27:59.250 --> 00:28:02.998
vaccine or selling it for a fee.

00:28:02.999 --> 00:28:04.249
- Who owns the patent
on this vaccine?

00:28:04.250 --> 00:28:09.166
- Well the people I would say.
There is no patent. This is...

00:28:09.167 --> 00:28:12.124
could you patent the sun?

00:28:12.125 --> 00:28:14.708
- I mean, I can think back
to a time when we had ideas,

00:28:14.709 --> 00:28:20.750
crazy ideas now, about social
solidarities. We\'re all

00:28:20.751 --> 00:28:24.709
individuals now. That\'s
what neoliberalism changed.

00:28:27.999 --> 00:28:31.583
- The 60\'s caught capitalism
completely off-guard. How a

00:28:31.584 --> 00:28:34.416
company is to sell products
to a generation that has

00:28:34.417 --> 00:28:36.374
rejected consumerism?

00:28:36.375 --> 00:28:39.041
The answer was to tune into
the movement and to sell

00:28:39.042 --> 00:28:41.998
to the individual in everyone.

00:28:41.999 --> 00:28:44.917
The strategy worked,
the marketing machine captured

00:28:44.918 --> 00:28:48.416
the spirit of the 60\'s
individualism and made

00:28:48.417 --> 00:28:49.500
it its own.

00:28:49.501 --> 00:28:51.583
- So Marx has what I call
a co-evolutionary theory

00:28:51.584 --> 00:28:54.625
of social change and to
the degree that capital is

00:28:54.626 --> 00:28:57.583
a permanently revolutionary
configuration, so we would see

00:28:57.584 --> 00:29:01.918
movements in ideas,
movements in social relations.

00:29:02.667 --> 00:29:04.999
- Leaving ideology behind,
we now derive a sense

00:29:05.000 --> 00:29:07.291
of personal identity and
empowerment from the goods

00:29:07.292 --> 00:29:11.791
we purchase and consume.
- Go on, break the rules, define

00:29:11.792 --> 00:29:16.041
who you are...

00:29:16.042 --> 00:29:17.833
with our sneakers.

00:29:17.834 --> 00:29:19.998
- By the time he gets towards
the end of Kapital, Marx does

00:29:19.999 --> 00:29:23.708
something interesting. He comes
back to the idea of fetishism.

00:29:23.709 --> 00:29:26.416
And the big fetish is
of course the money form

00:29:26.417 --> 00:29:28.999
and the credit system.

00:29:29.876 --> 00:29:33.999
- You have money jitters? Ask
the obliging Bank of America

00:29:34.000 --> 00:29:39.750
for a jar of soothing instant
money. M-o-n-e-y in the form

00:29:39.751 --> 00:29:45.875
of a convenient personal
loan. Available now

00:29:45.876 --> 00:29:48.083
at Bank of America.

00:29:52.959 --> 00:29:56.166
- In order to expand tomorrow\'s
demand and increase profits,

00:29:56.167 --> 00:29:59.583
today\'s production needs
to be financed.

00:29:59.584 --> 00:30:01.833
- That means the credit system
has to come in here, and what we

00:30:01.834 --> 00:30:05.333
can derive from this immediately
is that the accumulation of

00:30:05.334 --> 00:30:08.374
capital in history has always
been paralleled by an

00:30:08.375 --> 00:30:13.918
accumulation of debt. You can\'t
have one without the other.

00:30:14.626 --> 00:30:17.791
- (Quote): A large portion of
this money, capital, is always

00:30:17.792 --> 00:30:22.998
necessarily purely fictitious,
that is title value,

00:30:22.999 --> 00:30:26.208
just as paper.

00:30:26.209 --> 00:30:28.999
Karl Marx, \"Das Kapital\"

00:30:30.083 --> 00:30:32.999
- One of the things that Marx
did, I think, very neatly,

00:30:33.000 --> 00:30:40.374
was to demonstrate fundamental
and foundational underlying

00:30:40.375 --> 00:30:44.875
relations and that underlying
relation between accumulation

00:30:44.876 --> 00:30:48.998
of debt and the accumulation
of capital can be looked at

00:30:48.999 --> 00:30:53.083
in a number of very specific
ways. I\'ll give you one example.

00:30:56.250 --> 00:30:59.208
Tract housing is being built.
Where did the builders get

00:30:59.209 --> 00:31:03.374
the money to do it? They borrow
the money from a financial

00:31:03.375 --> 00:31:06.750
institution and say: give me
the money and I will buy

00:31:06.751 --> 00:31:10.998
the land and I\'ll build
the housing. Okay and then,

00:31:10.999 --> 00:31:14.918
they\'ll be a rate of return
on that and I\'ll pay you back.

00:31:16.501 --> 00:31:18.708
Now, in order for that
to happen, they have to be able

00:31:18.709 --> 00:31:22.998
to sell the housing to somebody.
Buyers out there, they go

00:31:22.999 --> 00:31:24.998
to the same financial
institution and say: lend me

00:31:24.999 --> 00:31:27.500
some money to buy the house
that you have financed

00:31:27.501 --> 00:31:29.999
the production of.
This is fictitious capital

00:31:30.000 --> 00:31:33.998
at work, because the financial
institution that has surplus

00:31:33.999 --> 00:31:37.041
money is actually funding
both the production

00:31:37.042 --> 00:31:40.292
and the consumption
of the housing.

00:31:43.000 --> 00:31:46.249
Right now, we are in a crisis
where fictitious capital is

00:31:46.250 --> 00:31:49.833
all over the place. But what
Marx does is this brilliant

00:31:49.834 --> 00:31:53.082
of saying: there\'s a surface
appearance, which is the fetish,

00:31:53.083 --> 00:31:55.958
I\'m going to go behind it
and actually be able to describe

00:31:55.959 --> 00:32:01.998
to you the nature of this fetish
which creates this thing called

00:32:01.999 --> 00:32:04.292
fictitious capital.

00:32:12.417 --> 00:32:14.998
- Adrian Subaru could be
described as a victim

00:32:14.999 --> 00:32:19.124
of fictitious capital. A victim
of debt which was never his.

00:32:19.125 --> 00:32:21.998
His story begins here
in the Romanian Parliament

00:32:21.999 --> 00:32:24.999
on December 23rd, 2011.

00:32:25.751 --> 00:32:28.249
- Romania\'s Parliament cancelled
the no confidence vote

00:32:28.250 --> 00:32:30.917
on Thursday after
a Romanian electrician staged

00:32:30.918 --> 00:32:32.999
a one-man protest.

00:33:27.334 --> 00:33:29.791
- On his t-shirt he wrote:
you have gunned us down,

00:33:29.792 --> 00:33:34.041
you have killed our children\'s
future. You can take away

00:33:34.042 --> 00:33:38.999
our money and our lives,
but not our freedom.

00:34:19.417 --> 00:34:22.124
- From this tiny apartment
in Bucharest, Adrian Subaru

00:34:22.125 --> 00:34:26.124
and his wife raised two kids
non his small salary of a public

00:34:26.125 --> 00:34:28.918
TV technician.

00:34:34.501 --> 00:34:38.750
After 2011, his salary was cut
nby 25% and so was the financial

00:34:38.751 --> 00:34:43.999
help for a special education
for Calin, their autistic son.

00:35:20.542 --> 00:35:25.333
-How and why did the debt of
his
ncountry lead to Adrian Subaru\'s

00:35:25.334 --> 00:35:27.999
desperate act?

00:35:32.999 --> 00:35:35.998
- That was shocking to all
Romanians, I presume,

00:35:35.999 --> 00:35:38.917
but because this is my way
of thinking, I frame

00:35:38.918 --> 00:35:44.999
that episode, that tragic
episode into a much wider frame.

00:35:47.999 --> 00:35:50.583
For many years, I thought about
the way the financial industry

00:35:50.584 --> 00:35:58.333
has gone awry, the derailed high
finance and what was not going

00:35:58.334 --> 00:36:00.875
well.

00:36:00.876 --> 00:36:05.998
We realized that a growth model
based on free movement

00:36:05.999 --> 00:36:09.208
of capital, total
financial liberalization

00:36:09.209 --> 00:36:12.958
and over-borrowing by
the private sector creates

00:36:12.959 --> 00:36:17.998
fragility and creates
vulnerability for the economy

00:36:17.999 --> 00:36:22.999
as a whole and may be very,
very painful when something,

00:36:23.000 --> 00:36:26.709
when a crisis occurs.

00:36:29.375 --> 00:36:32.500
- In Romania, foreign capital
in search of return flooded

00:36:32.501 --> 00:36:37.709
Romanian banks which fuelled
growth based on debt.

00:36:39.584 --> 00:36:44.249
- The bankers stepped in and
they helped the consumer

00:36:44.250 --> 00:36:49.501
growth and money was flooding
into the country.

00:36:53.918 --> 00:36:59.583
Lots of foreign savings flooded
to Romania via banking channels

00:36:59.584 --> 00:37:03.917
and they reached the Romanian
consumers and everybody could

00:37:03.918 --> 00:37:10.082
afford buying new things
like cars and houses.

00:37:10.083 --> 00:37:16.500
And then the people thought:
we have reached the market

00:37:16.501 --> 00:37:20.917
economy and we can afford more.
But actually, there were

00:37:20.918 --> 00:37:25.083
too much expectations and
maybe some false expectations.

00:37:26.792 --> 00:37:29.917
- Romania is now the latest
European country wrestling with

00:37:29.918 --> 00:37:33.709
violent protests over budget
cuts and financial issues.

00:37:34.834 --> 00:37:38.999
- The bubble finally burst
here as everywhere. Debt as

00:37:39.000 --> 00:37:43.292
Marx foresaw, is a form
of fictitious capital.

00:37:44.709 --> 00:37:48.750
As a public employee, Adrian
was
never part of the boom.

00:37:48.751 --> 00:37:52.166
But when the bubble burst,
the State turned against

00:37:52.167 --> 00:37:54.918
its weakest citizens.

00:37:59.584 --> 00:38:02.998
- Capital is perpetually moving
its crisis tendencies around.

00:38:02.999 --> 00:38:06.625
If you look at the most
recent crisis, it started

00:38:06.626 --> 00:38:08.998
in the housing market.

00:38:08.999 --> 00:38:11.666
- If deputies Allen Mathias
and Derek Stevenson come

00:38:11.667 --> 00:38:15.374
to your door, your house
no longer belongs to you.

00:38:15.375 --> 00:38:16.791
It belongs to the bank.

00:38:16.792 --> 00:38:18.791
- It then went
to financial institutions.

00:38:18.792 --> 00:38:21.998
- There\'s blood in the streets
and no one knows when

00:38:21.999 --> 00:38:23.082
the bleeding will stop.

00:38:23.083 --> 00:38:25.333
- It then became State debt.
It\'s now being pushed onto

00:38:25.334 --> 00:38:29.374
the people, but people are not
in a position, very frequently,

00:38:29.375 --> 00:38:34.500
to bear that. So it\'s now moving
back to financial institutions

00:38:34.501 --> 00:38:37.083
in some instances.

00:38:37.667 --> 00:38:40.958
Marx is, I think, very good
at giving us a sense of how

00:38:40.959 --> 00:38:44.625
this moves around. And as
it moves around, of course,

00:38:44.626 --> 00:38:49.709
it engages in
a process of destruction.

00:38:57.999 --> 00:39:00.458
- On the far end of the global
trail of the tsunami

00:39:00.459 --> 00:39:04.208
of fictitious capital
in search of return, is India,

00:39:04.209 --> 00:39:07.999
one of the world\'s
largest emerging markets.

00:39:09.501 --> 00:39:12.917
- The term emerging markets
emerges in the late 1980\'s,

00:39:12.918 --> 00:39:17.666
early 1990\'s as well. And it\'s
actually coined by people

00:39:17.667 --> 00:39:21.958
at the World Bank and the IMF
in order to describe those

00:39:21.959 --> 00:39:26.292
economies which are going
to be growing very rapidly.

00:39:28.375 --> 00:39:32.166
Now, why are they so concerned
about growth? Not just because

00:39:32.167 --> 00:39:36.998
they believe that growth will
address poverty. But they are

00:39:36.999 --> 00:39:41.041
interested above all in the
quantitative measure of growth.

00:39:41.042 --> 00:39:44.500
What\'s the reason for that?
If you examine deep enough,

00:39:44.501 --> 00:39:48.998
you\'ll find that if the real
economy, instead of 5% per

00:39:48.999 --> 00:39:51.998
annum, let\'s say GDP in these
areas is growing at 8% or 9%,

00:39:51.999 --> 00:39:57.998
the returns to financial
investors in financial markets

00:39:57.999 --> 00:40:01.292
actually grow by orders
of magnitude, greater.

00:40:06.000 --> 00:40:10.958
So India in 2009 was the third
most lucrative stock market.

00:40:10.959 --> 00:40:14.166
The Bombay Stock Exchange was
actually getting annual returns

00:40:14.167 --> 00:40:17.998
of on average about 48%,
which is remarkable. So what

00:40:17.999 --> 00:40:23.124
you actually notice is that
India has become an outpost

00:40:23.125 --> 00:40:26.918
of global finance capital.

00:40:29.834 --> 00:40:32.998
- Finance capital, which Marx
called fictitious is said

00:40:32.999 --> 00:40:36.833
to have lifted around 200
nmillion people up to the middle

00:40:36.834 --> 00:40:40.998
class, but left behind an
estimated 800 million more,

00:40:40.999 --> 00:40:43.501
surviving on one dollar a day.

00:41:27.083 --> 00:41:30.958
- Stagnation so severe that in
the United States for example,

00:41:30.959 --> 00:41:33.750
a CEO was making 20 times
more than his employees

00:41:33.751 --> 00:41:39.416
in the 1950\'s. In 2000, his
salary ballooned to 120 times

00:41:39.417 --> 00:41:45.918
and in 2013, it almost
doubled again to 204.

00:42:20.999 --> 00:42:23.291
-This is CNN Breaking News.

00:42:23.292 --> 00:42:26.998
It was a Monday morning like
none other in the 158 year

00:42:26.999 --> 00:42:29.998
history of financial
giant Lehman Brothers.

00:42:29.999 --> 00:42:32.709
The company went bankrupt.

00:42:35.792 --> 00:42:39.041
- If capitalism is not on its
deathbed as Marx predicted,

00:42:39.042 --> 00:42:41.416
then what could be
an alternative theory to
explain

00:42:41.417 --> 00:42:45.918
the 2008 financial
crisis and its aftermath?

00:42:48.834 --> 00:42:51.998
- We recognize that the very
nature of globalization, which

00:42:51.999 --> 00:42:57.958
creates ever higher standards
of living, also is the process

00:42:57.959 --> 00:43:01.124
which we call creative
destruction. The problem with

00:43:01.125 --> 00:43:06.918
creative destruction is
that it is destruction.

00:43:08.250 --> 00:43:10.998
- Creative destruction was
a term coined by the early

00:43:10.999 --> 00:43:15.083
20th century economist
Joseph Schumpeter.

00:43:16.999 --> 00:43:18.500
- Schumpeter\'s key idea
of creative destruction was

00:43:18.501 --> 00:43:21.998
the idea that capitalism is
constantly revolutionizing

00:43:21.999 --> 00:43:24.083
itself from within.

00:43:25.584 --> 00:43:27.124
He called it the process
of industrial mutation,

00:43:27.125 --> 00:43:30.791
where there\'s incessant change
destroying the old and bringing

00:43:30.792 --> 00:43:34.500
in the new and the agent of this
change, the person who carried

00:43:34.501 --> 00:43:37.292
this change out is
the entrepreneur.

00:43:41.083 --> 00:43:44.875
- Every once in a while,
a revolutionary product comes

00:43:44.876 --> 00:43:47.999
along that changes everything.

00:43:48.000 --> 00:43:50.333
- So the basic idea of creative
destruction is that there\'s

00:43:50.334 --> 00:43:52.998
a new product that\'s
the creative side for a new

00:43:52.999 --> 00:43:57.374
method of producing and that\'s
all to the good, but there\'s

00:43:57.375 --> 00:44:00.291
also the destruction side
which is that it wipes out

00:44:00.292 --> 00:44:03.750
some earlier method or product
and there\'s a loss there.

00:44:03.751 --> 00:44:06.833
There\'s a social loss, there\'s
a human loss. Schumpeter didn\'t

00:44:06.834 --> 00:44:10.998
pay quite as much attention
to the loss side as

00:44:10.999 --> 00:44:11.834
to the creative side.

00:44:11.835 --> 00:44:16.791
- Today we celebrate the first
glorious anniversary

00:44:16.792 --> 00:44:19.875
of the information purification
directives. We have created

00:44:19.876 --> 00:44:25.291
for the first time in all
history a garden of pure

00:44:25.292 --> 00:44:27.501
ideology.

00:44:44.999 --> 00:44:52.998
We are one people, with one
will, one resolve, one cause.

00:44:52.999 --> 00:44:58.875
We shall prevail!

00:44:58.876 --> 00:45:03.708
On January 24th, Apple Computer
will introduce Macintosh.

00:45:03.709 --> 00:45:10.292
And you\'ll see why 1984
won\'t be like 1984.

00:45:31.999 --> 00:45:33.998
- So are we in the midst
of a crisis, which is part

00:45:33.999 --> 00:45:38.124
of an endless cycle of creative
destructions or in the midst

00:45:38.125 --> 00:45:41.666
of a system which as Marx
predicted is indeed in

00:45:41.667 --> 00:45:44.083
a terminal downwards spiral?

00:45:47.501 --> 00:45:49.998
- It was probably the weekend
before Lehman\'s went bust.

00:45:49.999 --> 00:45:54.958
And it\'s normally a little
bit noisy, but at the time,

00:45:54.959 --> 00:45:57.458
it was, you could hear a pin
drop. It was that deathly

00:45:57.459 --> 00:46:02.374
quiet. And I could almost feel
that the global system was

00:46:02.375 --> 00:46:07.501
frozen. And it was
quite a scary thought.

00:46:09.626 --> 00:46:12.500
It took me back to a lot of
the things that I used to read

00:46:12.501 --> 00:46:16.041
about and study when I was
much younger. The days when

00:46:16.042 --> 00:46:18.124
I actually read Marx for fun.

00:46:18.125 --> 00:46:21.500
- All Marx and Engels\' warning
over the dangers of monopoly

00:46:21.501 --> 00:46:25.625
capitalism and concentrated
finance have come to pass.

00:46:25.626 --> 00:46:32.249
So why then no total collapse
of capitalism? Because right

00:46:32.250 --> 00:46:37.958
around the world governments
have been forced to bail out

00:46:37.959 --> 00:46:41.709
the so-called free market.

00:46:43.792 --> 00:46:46.583
We have bailed out the banks,
we have subsidized industries,

00:46:46.584 --> 00:46:48.998
we sorted out the insurance
sector, we\'ve underpinned

00:46:48.999 --> 00:46:53.082
financial services. It is
the forces of collectivism

00:46:53.083 --> 00:46:57.709
which have saved capitalism.

00:47:00.292 --> 00:47:05.082
- In 1991, socialism died,
at least communism,

00:47:05.083 --> 00:47:10.292
in the Eastern Block.
In 2008, capitalism died.

00:47:11.999 --> 00:47:14.583
When I was a young student
of economics, the great

00:47:14.584 --> 00:47:18.541
debate was between socialists
who believed in central planning

00:47:18.542 --> 00:47:23.998
and Hayekians or liberals
who believed in the miracle

00:47:23.999 --> 00:47:27.166
of the market in organizing
economic activities.

00:47:27.167 --> 00:47:32.875
The argument of the pro-market
theorists was that capitalism is

00:47:32.876 --> 00:47:38.458
a Darwinian struggle where
the fittest prevail and the less

00:47:38.459 --> 00:47:42.833
fit, the more inefficient,
the least productive

00:47:42.834 --> 00:47:44.041
and profitable perish.

00:47:44.042 --> 00:47:46.791
- The New York State\'s attorney
said that Citigroup, Merrill

00:47:46.792 --> 00:47:49.998
and seven other banks which got
a 175 billion dollars in tax

00:47:49.999 --> 00:47:54.999
funded bail out money, paid
out 33 billion in bonuses.

00:47:55.000 --> 00:47:59.249
- What happened after 2008,
with a particular way in which

00:47:59.250 --> 00:48:04.958
the bankers were saved
was Darwinism inverted.

00:48:04.959 --> 00:48:09.291
The more unsuccessful you were
as a banker, the greater

00:48:09.292 --> 00:48:14.374
your bank\'s losses, the greater
the support you got from

00:48:14.375 --> 00:48:17.249
the tax payers and the more
successful you became

00:48:17.250 --> 00:48:20.333
at extracting from the rest
of society the surplus that

00:48:20.334 --> 00:48:25.124
the rest of society was
producing. So we have a new

00:48:25.125 --> 00:48:28.666
regime which I call
\"bankruptocracy\". It\'s

00:48:28.667 --> 00:48:31.918
the rule by bankrupted banks.

00:48:40.709 --> 00:48:42.875
- The whole point about the
contradictions in capitalism

00:48:42.876 --> 00:48:46.917
is not specifically whether
Marx\'s analysis is relevant,

00:48:46.918 --> 00:48:48.875
which personally I think,
in many ways it is,

00:48:48.876 --> 00:48:53.583
but it\'s the outcome, it\'s
the synthesis and our capacity

00:48:53.584 --> 00:48:58.083
to basically nurture and
establish coping mechanisms.

00:49:05.542 --> 00:49:07.875
On Marx\'s tombstone, as you
know if you have been there,

00:49:07.876 --> 00:49:10.791
there\'s a inscription taken
from the thesis on Feuerbach

00:49:10.792 --> 00:49:13.750
which says: the philosophers
have only interpreted the world

00:49:13.751 --> 00:49:17.625
in various ways, but the point
however is to change it.

00:49:17.626 --> 00:49:19.998
Which is precisely what
our antecedents have done

00:49:19.999 --> 00:49:24.998
by developing coping mechanisms
like institutions of the rule

00:49:24.999 --> 00:49:27.750
of law, limited liability
companies, trade unions,

00:49:27.751 --> 00:49:31.541
mutual societies, insurance,
welfare and technological

00:49:31.542 --> 00:49:36.541
discoveries that drive
productivity income and jobs.

00:49:36.542 --> 00:49:40.416
Finding those coping mechanisms
is an endless task and we need

00:49:40.417 --> 00:49:42.709
to make more progress.

00:49:52.334 --> 00:49:56.166
- Marx finally finished
\"Das Kapital\". He had watched

00:49:56.167 --> 00:50:00.249
his wife become ill,
his daughter suffer ill-health

00:50:00.250 --> 00:50:04.333
and poverty. He had buried
now four children by the time

00:50:04.334 --> 00:50:09.458
\"Das Kapital\" was published
and the family waited for

00:50:09.459 --> 00:50:11.791
the recognition that they
all believed he deserved

00:50:11.792 --> 00:50:16.833
for a book that they felt would
not only change their lives,

00:50:16.834 --> 00:50:20.124
but would change the world
and nothing happened.

00:50:20.125 --> 00:50:23.750
When \"Das Kapital\" was
published, Engels and the family

00:50:23.751 --> 00:50:26.082
frantically started writing
reviews in order for it

00:50:26.083 --> 00:50:29.998
not to be ignored, but their
reviews were the only ones

00:50:29.999 --> 00:50:31.833
really that were written.

00:50:31.834 --> 00:50:36.750
- Marx never really recovered.
He died on March 14th 1883,

00:50:36.751 --> 00:50:40.166
2 years after Jenny.
Only 11 people showed up

00:50:40.167 --> 00:50:45.500
at his funeral. Friedrich Engels
eulogized him. \"On the afternoon

00:50:45.501 --> 00:50:50.291
of the 14th of March 1883
at a quarter to 3\", Engels said,

00:50:50.292 --> 00:50:55.709
\"the greatest living
thinker ceased to think.\"

00:51:00.292 --> 00:51:03.998
- The Marx family was originally
buried in a very small and

00:51:03.999 --> 00:51:07.999
modest plot, here in Highgate,
just down the row from where

00:51:08.000 --> 00:51:10.501
the monument is today.

00:51:13.792 --> 00:51:18.333
In 1956, the communist party
decided that Marx, such

00:51:18.334 --> 00:51:22.082
a monumental figure,
really deserved a larger

00:51:22.083 --> 00:51:24.292
memorial.

00:51:30.417 --> 00:51:33.583
And so they built this. And
in a way, I think this really

00:51:33.584 --> 00:51:37.166
is a very good indication
of what happened to Marx\'s

00:51:37.167 --> 00:51:42.458
legacy, Marx\'s ideas, how it was
interpreted and misinterpreted

00:51:42.459 --> 00:51:44.709
in the 20th century.

00:51:56.626 --> 00:52:00.917
- In 1929, capitalism seemed
to be on its knees and Marx\'s

00:52:00.918 --> 00:52:03.208
prediction came closer
to fulfilment than ever.

00:52:03.209 --> 00:52:07.333
Two individuals had
diametrically opposed ideas

00:52:07.334 --> 00:52:11.082
of how to save capitalism from
itself. The debate between them

00:52:11.083 --> 00:52:16.083
has shaped the past century
and is still raging today.