WEBVTT

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Capitalism 6 VA Closed captioned

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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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- Buried in the dunes are
the remnants of the ancient

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civilizations of Mesopotamia
and their secrets, the dawn

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of our economic history.

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- If you\'re looking
at the origins of all

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of the techniques of enterprise,
where was the first interest

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charge, the first trade
contracts, the first money,

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prices, the first accounting?
All of these were developed

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in a particular part of the
world. Sumer in Babylonia,

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in what is today Southern Iraq,
and they were all developed

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by the temples and the palace.

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- Athens 2012, 5000 years later
and the most potent symbol

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of our current economic crisis,
na city and a country in a state

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of shock, forced into austerity
nprograms in exchange for loans.

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- After 2 or 3 years
of this austerity program,

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that is of the shock politics,
we are facing an economic

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disaster.

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- What causes civilizations
to disappear and their

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economies to collapse? What
connects modern Greece

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to ancient Sumer? There was one
neconomic historian who proposed

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that the answers may be buried
with the ruins of ancient

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civilizations.

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Economist Kari Polanyi is back
nin Vienna tracing the footsteps

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of her father.

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Karl Polanyi was born in Vienna
in 1886 and grew up in
Budapest.

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He contracted typhus
in the First World War

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and came to Vienna in 1919 as
na refugee after the short-lived

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Hungarian Republic, which
he had supported, was crushed.

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- My father was a journalist
and he worked for a weekly

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economics journal called
Der OÖsterreichische Volkswirt.

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And of course there was
a deadline and the copy,

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he had to finish his copy,
his columns by Thursday night.

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And he used to smoke
in this room, you couldn\'t see

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from one side of the room to
the other. It was just filled

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with smoke.

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- Vienna, once the capital
nof an empire, was in the 1920\'s

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a politically divided city
in a country struggling

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with economic chaos.

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- My father was living
in a Vienna where there was

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massive unemployment, where
there was a very strong

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socialist party.

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And they say the socialist
party of Austria was elected

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in Vienna from 1918 in every
single election until

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the civil war.

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- Karl Polanyi was immersed
in Vienna\'s politics

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and its socialist movement.

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- We are going
to the Karl Marx-Hof.

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It was the most avant-garde
social housing in all of Europe.

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Vienna, in the 1920\'s,
socialist Vienna managed to turn

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the class relationship around,
that of course is what upset

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Hayek and company because
the financing for these social

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housings was by taxing
the private housing, the private

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residential housing.

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- In 1934, this experiment was
brutally put to an end.

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- Civil war flares up suddenly
in Austria. The government,

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deciding to suppress
the socialists, counters

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a general strike by martial law.
The stronghold in which

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the \"Schutzbund\" or Socialist
Defence League hold out a huge

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block of flats built for
the Viennese workers by

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the socialists council
of the city.

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The strength of the buildings
enables them to prolong

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resistance for several days,
and artillery had to be brought

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into action against them.

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- It made a profound impression
on me and I think it was

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the formative event of my life
because I have known which

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side I\'m on ever since.

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-Karl Polanyi left Vienna a
year
earlier after being dismissed

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from his job because
of his political beliefs.

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After the crushing of
the Austrian Socialist Party,

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his then 10 year old daughter
Kari followed him to England.

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1944, Germany and most of
Europe
are in ruins. Intellectuals
like

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Karl Polanyi had been trying
to understand the causes

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of the collapse of European
civilization and to lay a path

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out of the rubble.

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For Karl Polanyi, it was
a chain of events that began

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in the 19th century with
nthe faith in the self-regulated

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free market.

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- (Quote): Our thesis is that
the old idea of a self-adjusting

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market implied a stark utopia.
Such an institution could not

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exist for any length of time
without annihilating the human

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and natural substance
of society. It would have

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physically destroyed man and
transformed his surroundings

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into a wilderness.

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Karl Polanyi
\"The Great Transformation\"

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- Polanyi\'s book was translated
into dozens on languages

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and his ideas found an audience
namong the new breed of students

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in North America. They saw
their
calling in rethinking
capitalism

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after the Second World War.

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- I came to the University
of Chicago in the year 1950,

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and I suppose my generation had
certain interesting goals

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or concerns.

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At the top of the list was
the question: would we be back

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in a major depression that we
had come through in the 1930\'s?

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- Behind the façade
of the skyline, swept under

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the city\'s rug, teeming
millions, never more

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than a copper coin
from starvation.

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- The second was a new world
was opening up: what about

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third-world countries?
What could we do for them?

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- Somewhere in East of Suez,
where the best is like

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the worst, a crowded
continent swarms with people,

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with palaces and poverty.

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- What about inequality?
Inequality between countries,

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inequality within countries.
These were the cogent,

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the compelling issues
of my generation at that time.

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And economics seemed on the
surface to be the entry point

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to address these issues.
But once you entered economics,

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you found yourself in a maze,
it was an intellectual maze

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with no exit.

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You began with a basic
proposition that the economic

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problem is scarcity
in the world, that there\'s not

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enough to give everybody as much
of everything as they would

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like.

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Because the world\'s resources
were limited, they had to be

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allocated. The best way
to allocate them, we were told,

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was the market economy.

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We were boxed into
the market economy and it was

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a form of intellectual
alienation from the world\'s

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real issues.

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Economic theory was very much
like a meat grinder that turns

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out hamburger. You put in old
bread, onions, ground meat,

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whatever you had in the fridge,
and you ground it together

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and whatever else happened,
it always came out as hamburger.

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And that was the problem
with economics. That wherever

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you began, you ended up with
the market economy, eternal,

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omnipresent, inescapable,
and totally binding.

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I felt intuitively
that I had to break out.

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I left in disappointment
and despair from Chicago

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and went to Columbia.

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In Columbia, it was quite
by chance that I saw a course

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called \"General Economic
History\", from a man I had

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never heard of,
called Karl Polanyi.

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- The course that Karl Polanyi
taught at Columbia University

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was based on his own inquiry
into the market economy

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as an ideological system. A
view
of society organized along

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the logic of the market.

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- To help us get a glimpse into
the future of this unfinished

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world of ours, there has been
created, for the New York\'s

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World\'s Fair, a thought-
provoking exhibit

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of the developments ahead of us.

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- The future of capitalism
nas depicted in a General Motors

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sponsored exhibit in the 1939
World\'s Fair. A corporate
vision

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of freedom and human needs
fulfilled by the free market.

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- Come, let\'s travel into
the future. What will we see?

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- Firebird II to control tower.
We are about to take off

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on the Highway of Tomorrow.
Stand by.

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- \"It is the result of a market
view of society\", wrote

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Karl Polanyi, \"which equated
economics with contractual

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relationships and contractual
relationships with freedom\".

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- Tomorrow, tomorrow,
our dreams will come true.

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- \"The Great Transformation\",
for me, was an intellectual

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earthquake. The earth opened up.
It was that kind of an amazing

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insight into the coming
of the market economy

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in lockstep with the Industrial
Revolution. And introducing

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a new protagonist which had
never been introduced before.

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Polanyi indicated in \"The Great
Transformation\" that there was

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another player in the economy,
and not simply market forces,

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but society itself.

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What he meant was that,
prior to modern times,

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in the coming of the market
economy, most economic

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transactions were under
the supervision and under

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the rule of some social
structure. Whether it was

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the church, whether it was
the town council or whether

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in tribal societies, it was
the norms developed from

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kinship and custom.

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He meant, therefore,
that in most of history,

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the economy was embedded
in society. Social norms had

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priority over economic
activities.

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-This is how the American
filmmaker D.W. Griffith
imagined

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Babylon in his classic
1916 film \"Intolerance\".

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Babylon was one of the ancient
societies that Polanyi had

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studied.

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He felt that these ruins
in the desert held clues

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not only to ancient
civilizations, but also to how

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they viewed their economies.

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- They discovered from ancient
Babylonia, that is modern Iraq,

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a number of tablets that were
the contracts that had been made

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for trade from the palace
to the outlying areas.

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- I have here five tablets which
relate to ancient economy and

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to the economic development.
This rather big tablet here

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is a ledger of animals available
for agricultural purposes

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from the time of the Ur III
period, that is at the end

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of the third millennium BC and
it shows that the bureaucracy

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at the time ended up
with ledger-like tablets

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like this recording all kinds
of economic activities.

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- From these clay tablets,
discovered in modern Iraq,

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people immediately concluded
business is as old as mankind.

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And if there was business,
it meant the kind of business

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we knew, buying and selling
and profit-making and so on.

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- These tablets are from a period
where we think that the economy

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was more based on the temple
and the palace and less economic

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activity on the private sector.

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- The traders were what we would
call today \"civil servants\'.

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Their income came not from
the profits on the trade.

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Their income came from
the salaries they made.

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We have mistaken the nature
of this trade. It is trade,

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but not the kind of trade
that we are involved in.

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It was one indication that
we were caught in a bind

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in economic history.
That whenever we saw any

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evidence of trade, and trade is
as old as mankind, we assumed

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\"business\".

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We fell back on Adam Smith\'s
instinctive notion that mankind

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has an inherent propensity
to truck, barter and exchange.

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In other words, putting it
differently, the market economy

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is built in as a human instinct.

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It was out of this kind of vice
that Polanyi tried to escape.

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- He saw a way out of the grip
of this vice in the study

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of ancient societies, societies
whose economies were under

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the control of social norms
and regulations. Where money

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and debt were treated
differently than they are

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today.

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- In Sumer and Babylonia,
people who did owe the debt were

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like owing the price for
a fine, they literally could

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be reduced to bondage
to the creditor,

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and in time, they could
lose their land rights.

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In Sumer, every new ruler would
proclaim a clean slate and

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the clean slate would, number 1:
free the debt of bond-servants,

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number 2: return the land
that had been forfeited

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to creditors and 3:
would annul the debts.

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This was the law that the Jews
in captivity picked up

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from Babylonia and the Hebrew
practice of Dror had exactly

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the same 3 items. So you restore
the normal equity way

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of producing within the economy
the way things were before.

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- If you don\'t mind, I can try
to give you a little bit

00:21:42.334 --> 00:21:47.791
of the text. So it says here:
\"Regarding the barter of

00:21:47.792 --> 00:21:51.541
the wife of the Rabi Sisi\'e\",
that\'s an official,

00:21:51.542 --> 00:21:55.833
\"about which you wrote to me
thus, her case concerning

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the 3.5 minas of silver is
settled, but she refuses

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to take the silver\".

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- We now have hundreds
of thousands of cuneiform

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tablets that tell us who owed
the early debts and who were

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the debts owed to. Almost all
debts were owed to the public

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sector, to the palace and the
temple and to their collectors.

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If you had the government
as the main entrepreneur

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and creditor, then it was
easy to cancel the debts

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for the Near East because
you\'re cancelling debts owed

00:22:30.209 --> 00:22:33.998
to yourself. What became much
more difficult in classical

00:22:33.999 --> 00:22:39.999
antiquity was when the debts
were owed to private creditors.

00:22:46.999 --> 00:22:50.998
Rome was the first major economy
not to cancel the debts

00:22:50.999 --> 00:22:54.625
and the result is that
by the second century of our

00:22:54.626 --> 00:22:59.166
era, one quarter of Rome\'s
population was reduced

00:22:59.167 --> 00:23:01.501
to slavery and bondage.

00:23:04.999 --> 00:23:08.500
If you look at revolts,
insurrections, revolutions,

00:23:08.501 --> 00:23:11.998
there have been more
insurrections about debt,

00:23:11.999 --> 00:23:17.541
I would hazard to guess,
than any other single issue

00:23:17.542 --> 00:23:19.709
in human history.

00:23:21.083 --> 00:23:25.500
Slavery, serfdom, feudal
arrangements, caste

00:23:25.501 --> 00:23:28.500
arrangements, any form
of inequality you want to name,

00:23:28.501 --> 00:23:32.875
people occasionally revolt,
but with debt, they revolt

00:23:32.876 --> 00:23:34.918
regularly.

00:23:39.334 --> 00:23:40.998
What is a debt after all?
It\'s a contract between two

00:23:40.999 --> 00:23:43.998
equal parties not be equal
anymore until one of them pays

00:23:43.999 --> 00:23:46.998
the money back. But it implies
that it could be equal,

00:23:46.999 --> 00:23:51.875
and that is actually, I suspect,
part of the reason it can

00:23:51.876 --> 00:23:54.501
become so explosive.

00:23:59.501 --> 00:24:02.791
- It\'s a long way from the fall
of the Roman Empire to Europe

00:24:02.792 --> 00:24:08.082
after the 2008 economic crash.
However, the issue of debt is

00:24:08.083 --> 00:24:12.833
as important now as it was then
and how society deals with it

00:24:12.834 --> 00:24:15.999
takes us back to Karl Polanyi.

00:24:24.834 --> 00:24:27.500
- A 77 year old Greek man took
his life in front of a crowd

00:24:27.501 --> 00:24:29.999
of walkers.

00:24:34.999 --> 00:24:38.958
- On the 4th of April 2012,
a 77 year old retired

00:24:38.959 --> 00:24:42.333
pharmacist shot himself to
death
as a protest against the cuts

00:24:42.334 --> 00:24:45.999
in his pension. The cuts were
part of the severe austerity

00:24:46.000 --> 00:24:49.999
that Greece was forced to
accept
in exchange for more loans

00:24:50.000 --> 00:24:54.083
intended to help
it avoid bankruptcy.

00:25:55.459 --> 00:25:59.918
- We are facing
an economic disaster.

00:26:05.834 --> 00:26:12.082
We have an official unemployment
rate of 22% which means that

00:26:12.083 --> 00:26:20.083
the real unemployment
rate must be around 30%.

00:26:22.292 --> 00:26:26.333
We are at the brink of a human
catastrophe. At this time

00:26:26.334 --> 00:26:30.998
that we are speaking, there are
at least 20 000 people seeking

00:26:30.999 --> 00:26:35.501
food and other necessary
things in the garbage.

00:26:38.999 --> 00:26:41.374
- When it was insisted that
Greece honour its commitment,

00:26:41.375 --> 00:26:47.083
an economic crisis developed
into a social and political
one.

00:26:53.417 --> 00:26:58.124
- Democracy was always
a very insecure, imperfect

00:26:58.125 --> 00:27:03.708
and precarious system.
But never before has democracy

00:27:03.709 --> 00:27:06.501
been in such a peril
as it is now.

00:27:08.999 --> 00:27:11.998
I come from a country,
from Greece, where the political

00:27:11.999 --> 00:27:17.500
elites have disappeared.
They have lost all legitimacy.

00:27:17.501 --> 00:27:20.750
It\'s not just that the
government has lost legitimacy,

00:27:20.751 --> 00:27:24.999
every single political movement
has lost legitimacy. And this is

00:27:25.000 --> 00:27:30.458
a major, major turn around
for a country in which

00:27:30.459 --> 00:27:32.918
democracy was born.

00:27:35.000 --> 00:27:38.998
The only beneficiaries are
the Nazis because the serpent\'s

00:27:38.999 --> 00:27:44.541
egg hatches in this environment
of \"bankruptocracy\"

00:27:44.542 --> 00:27:46.918
and loss of hope.

00:28:22.876 --> 00:28:25.124
- So with such a social and
economic price to be paid,

00:28:25.125 --> 00:28:31.709
why was bankrupt Greece forced
to continue to pay its debt?

00:28:46.792 --> 00:28:50.041
- It\'s a strange moral power
that debt has over us.

00:28:50.042 --> 00:28:53.918
It can seem to justify anything.

00:28:54.751 --> 00:28:57.458
What it is about debt
that seems to trump

00:28:57.459 --> 00:28:59.918
any other morality?

00:29:01.792 --> 00:29:03.791
The more I researched
the matter, I realized that

00:29:03.792 --> 00:29:07.082
this kind of moral confusion,
this moral conflict over debt

00:29:07.083 --> 00:29:09.998
goes back thousands of years.
People have been having

00:29:09.999 --> 00:29:13.583
these kinds of arguments
forever. And I think the reason

00:29:13.584 --> 00:29:17.833
why is because... what is
a debt? A debt is a promise,

00:29:17.834 --> 00:29:21.625
but in a way it\'s a very weird
kind of promise. I even say

00:29:21.626 --> 00:29:24.374
it\'s a perversion of a promise
because it\'s a promise that

00:29:24.375 --> 00:29:28.583
has been suffused with this kind
of combination of mathematics

00:29:28.584 --> 00:29:31.083
and violence.

00:29:39.999 --> 00:29:43.041
- This is the true shocking
story of Scarface Al Capone,

00:29:43.042 --> 00:29:47.501
who stepped out of Chicago
to take America by the throat.

00:29:50.417 --> 00:29:51.958
- This is why the Mafia,
for example, always tries

00:29:51.959 --> 00:29:53.998
to turn everything into a debt
when they\'re collecting,

00:29:53.999 --> 00:29:57.458
to moralize it. The fact that
it is a promise makes it seem

00:29:57.459 --> 00:30:00.750
sacred in a way that other
relations, to put it frankly,

00:30:00.751 --> 00:30:04.374
extortion, don\'t. And in
fact, if you look at history,

00:30:04.375 --> 00:30:07.708
what you will find is that debt
is the most effective means

00:30:07.709 --> 00:30:10.791
ever created to take what is
essentially a relationship

00:30:10.792 --> 00:30:13.998
violent extortion and make it
seem moral, and not only to make

00:30:13.999 --> 00:30:18.333
it seem moral, to make it seem
like it\'s actually the victims

00:30:18.334 --> 00:30:20.041
who are somehow
morally to blame.

00:30:20.042 --> 00:30:26.292
- Let\'s talk about a person.
This person could be anyone.

00:30:27.292 --> 00:30:32.292
Let\'s call him Alex. Let\'s
make things more complicated.

00:30:32.542 --> 00:30:37.583
Let\'s say Alex is Greek.
Based on the stories you hear,

00:30:37.584 --> 00:30:43.583
Alex is also a lazy, cheating,
ungrateful, helpless, corrupt,

00:30:43.584 --> 00:30:47.998
violent, rude, racist,
tax-evading, trouble-making,

00:30:47.999 --> 00:30:52.708
thieving vandal that
lives with his mother.

00:30:52.709 --> 00:30:57.291
Well, the stories say it,
so it must be true.

00:30:57.292 --> 00:31:00.917
- Debts are always negotiable
if they\'re between equals.

00:31:00.918 --> 00:31:05.249
People who you consider equal
in status, of course debts can

00:31:05.250 --> 00:31:07.998
be renegotiated. In fact,
what we saw in 2008 is

00:31:07.999 --> 00:31:10.458
if you\'re American Insurance
Group, if you\'re Bank

00:31:10.459 --> 00:31:14.291
of America, if you\'re Citibank,
you know, they\'re willing

00:31:14.292 --> 00:31:17.208
to write off trillions
of dollars worth of debt

00:31:17.209 --> 00:31:20.998
by waving magic wands of one
sort or another. They have no

00:31:20.999 --> 00:31:24.875
problem forgiving debt. So how
is it that American Insurance

00:31:24.876 --> 00:31:27.998
Group can have their debts
written off and Greece can\'t?

00:31:27.999 --> 00:31:33.082
- Clap on, clap off,
clap on, clap off.

00:31:33.083 --> 00:31:37.333
The Clapper lets you turn
capitalism on or off, however

00:31:37.334 --> 00:31:40.998
you choose. Don\'t trouble
yourself with a complicated

00:31:40.999 --> 00:31:45.041
socialist revolution,
just clap on, clap off.

00:31:45.042 --> 00:31:48.833
Clap on when times are good
and you make the profit.

00:31:48.834 --> 00:31:52.917
Clap off when times are bad,
just clap off the free market

00:31:52.918 --> 00:31:55.208
and the glorious
State will provide.

00:31:55.209 --> 00:31:59.958
- The only possible explanation
is that people assume that

00:31:59.959 --> 00:32:01.998
the kind of people who are
in American Insurance Group are

00:32:01.999 --> 00:32:05.166
people like them. And in fact,
if you look at world history,

00:32:05.167 --> 00:32:08.791
what you realize is that debts
between equals are fundamentally

00:32:08.792 --> 00:32:14.083
different than debts between
the powerful and the powerless.

00:32:17.250 --> 00:32:20.791
- So what has happened? When did
debt become a supposedly

00:32:20.792 --> 00:32:25.333
purely economic issue? When did
the economy surpass social

00:32:25.334 --> 00:32:27.501
relationships?

00:32:29.459 --> 00:32:31.958
According to Karl Polanyi,
it was the reorganization

00:32:31.959 --> 00:32:37.292
of society during the
industrial
nrevolution of the 19th century.

00:32:39.501 --> 00:32:42.998
When for the first time
in history, labour, land

00:32:42.999 --> 00:32:46.999
and money were transformed
into commodities.

00:32:51.417 --> 00:32:55.583
\"But labour, land and money\",
he wrote, \"are obviously not

00:32:55.584 --> 00:32:59.041
commodities. Labour is only
another name for human activity

00:32:59.042 --> 00:33:02.709
which goes with life itself\".

00:33:39.417 --> 00:33:42.833
\"Money is merely a token
of purchasing power\",

00:33:42.834 --> 00:33:44.999
Karl Polanyi wrote.

00:34:15.751 --> 00:34:19.041
\"Land is only another name
for nature, which is not

00:34:19.042 --> 00:34:21.501
produced by man\".

00:34:55.959 --> 00:34:59.625
- Society\'s problems begin,
according to Polanyi,

00:34:59.626 --> 00:35:01.249
by pretending that these
commodities will behave

00:35:01.250 --> 00:35:05.124
as if they are real. Greek
debt illustrates the fatal

00:35:05.125 --> 00:35:09.541
consequences. Its story
begins here in Frankfurt.

00:35:09.542 --> 00:35:13.999
Most of the Greek debt is
owed to German banks.

00:35:14.626 --> 00:35:17.374
- Creditors will always try
to get their money back.

00:35:17.375 --> 00:35:20.666
And effectively, having lent all
this money, they are demanding

00:35:20.667 --> 00:35:21.791
it back. So what are
they doing? They\'re trying

00:35:21.792 --> 00:35:27.917
to extend these loans, impose
more taxes, impose privatization

00:35:27.918 --> 00:35:29.998
of Greek assets in order
to get the money back.

00:35:29.999 --> 00:35:32.750
- 400 people have been detained
in the Eurozone\'s financial

00:35:32.751 --> 00:35:36.998
capital after clashes broke
out there on a second day

00:35:36.999 --> 00:35:38.333
of anti-austerity protest.

00:35:38.334 --> 00:35:40.998
- Greece was offered a bailout
in order to enable it to pay

00:35:40.999 --> 00:35:45.998
its creditors. More loans in
nexchange for austerity measures

00:35:45.999 --> 00:35:49.374
and the privatization
of public assets.

00:35:49.375 --> 00:35:54.666
- There was no bailout for Greeks
or for the Irish or for

00:35:54.667 --> 00:35:58.998
the Portuguese. What there
was, was a cynical attempt

00:35:58.999 --> 00:36:05.249
to transfer the losses from
German banks onto the shoulders

00:36:05.250 --> 00:36:07.333
of German taxpayers.

00:36:07.334 --> 00:36:10.374
- Seen from a Greek perspective,
northern European countries

00:36:10.375 --> 00:36:13.750
wanted to shield their banks
from the devastating losses

00:36:13.751 --> 00:36:17.999
they would incur if Greece
failed to pay its debt.

00:36:20.459 --> 00:36:26.458
- In May 2012, we have
this remarkable example

00:36:26.459 --> 00:36:28.791
of \"bankruptocracy\"
European style.

00:36:28.792 --> 00:36:32.998
The Greek State borrowed
from the bailout fund, which

00:36:32.999 --> 00:36:35.958
was backed of course
by German taxpayers.

00:36:35.959 --> 00:36:39.333
Now, what happened to this
money? Was it used in order

00:36:39.334 --> 00:36:42.374
to stimulate the Greek economy?
In order to pay for unemployment

00:36:42.375 --> 00:36:45.124
benefits? Given that
unemployment doubled

00:36:45.125 --> 00:36:48.791
from 10% to 20% and now
it\'s 25%? No! Not one penny

00:36:48.792 --> 00:36:54.374
went into the Greek economy in
any shape or form. That money,

00:36:54.375 --> 00:36:58.249
the 4 billion, was used in order
to repay the European Central

00:36:58.250 --> 00:37:04.999
Bank for bonds of the Greek
State that it had purchased.

00:37:07.542 --> 00:37:09.998
The ECB, the European Central
Bank, had purchased these bonds

00:37:09.999 --> 00:37:15.416
at a discount, but when those
bonds matured in May of 2012,

00:37:15.417 --> 00:37:18.999
the European Central Bank
demanded the full price

00:37:19.000 --> 00:37:23.958
the full face value of those
bonds. So Greece had to borrow

00:37:23.959 --> 00:37:28.500
effectively from Germany,
in order to give to the ECB

00:37:28.501 --> 00:37:32.666
a sum of money which was
effectively well above

00:37:32.667 --> 00:37:36.918
the cost to the ECB
of these bonds.

00:37:42.999 --> 00:37:45.124
- We have to compliment
the government and therefore

00:37:45.125 --> 00:37:48.999
also the people of Greece
in the perseverance of going

00:37:49.000 --> 00:37:52.998
through these difficult times
and going through difficult

00:37:52.999 --> 00:37:57.918
measures that were
inevitable to be taken.

00:37:58.375 --> 00:38:00.541
- I think the bailout is
a fantastic marketing ploy

00:38:00.542 --> 00:38:02.249
and it was anything
but a bailout. Effectively,

00:38:02.250 --> 00:38:06.750
it is keeping the patient alive
by keeping Greece solvent

00:38:06.751 --> 00:38:09.833
without going for a default,
because if you did have

00:38:09.834 --> 00:38:13.500
a default, all the banks and
the creditors would lose out.

00:38:13.501 --> 00:38:16.166
By giving this so-called
bailout, you extend and pretend

00:38:16.167 --> 00:38:19.958
that Greece is solvent and can
pay this money back and allows

00:38:19.959 --> 00:38:22.583
you to buy time to try
to extract as much money back

00:38:22.584 --> 00:38:25.999
through taxes
or through privatizations.

00:40:27.959 --> 00:40:30.333
- Polanyi also anticipated
the havoc caused by what

00:40:30.334 --> 00:40:35.083
he called \"the fiction
of money as a commodity\".

00:40:36.042 --> 00:40:39.416
\"It would prove as disastrous
to business as flood

00:40:39.417 --> 00:40:42.709
and drought in primitive
societies\", he wrote.

00:40:44.292 --> 00:40:47.666
No society could stand
the effect of such a system

00:40:47.667 --> 00:40:49.918
of crude fiction.

00:40:55.250 --> 00:40:57.500
- The story of \"The Great
Transformation\" is the story

00:40:57.501 --> 00:41:03.917
of pushback. That society became
an important protagonist.

00:41:03.918 --> 00:41:11.333
And this was novel because
for those who were involved

00:41:11.334 --> 00:41:16.917
in economics, individualism was
the key. There was no society.

00:41:16.918 --> 00:41:24.918
- ♪ Shopping cart of worldly
treasures living lightly ♪

00:41:25.999 --> 00:41:28.998
♪ on the road. ♪

00:41:28.999 --> 00:41:33.416
- It is one the one hand
my father\'s concept of

00:41:33.417 --> 00:41:38.333
the \"disembedded economy\".
The idea that capitalism

00:41:38.334 --> 00:41:44.249
has disembedded the economic
life from the social base

00:41:44.250 --> 00:41:47.998
or rather has transformed
the social base to serve

00:41:47.999 --> 00:41:55.999
the economy. So that economic
relations begin to govern,

00:41:56.999 --> 00:42:01.208
you know, the way in which
we relate to each other

00:42:01.209 --> 00:42:03.501
in society.

00:42:07.042 --> 00:42:11.625
- The golden era of consumption.
It is so important that

00:42:11.626 --> 00:42:13.998
protecting this era has
become the top priority

00:42:13.999 --> 00:42:17.166
for the materialist economy.
That\'s why after 9/11,

00:42:17.167 --> 00:42:19.998
when our country was in shock
and President Bush could have

00:42:19.999 --> 00:42:22.998
suggested any number of
appropriate things, \"To grieve,

00:42:22.999 --> 00:42:28.249
to pray, to hope\". No!
He said: \"To shop, to shop\".

00:42:28.250 --> 00:42:31.999
We have become
a nation of consumers.

00:42:32.375 --> 00:42:36.082
- In my father\'s perspective,
it is more the other way around

00:42:36.083 --> 00:42:44.083
that society is the base and
the economy rests in a way

00:42:45.083 --> 00:42:48.998
on a society and when
those links disappear,

00:42:48.999 --> 00:42:51.998
and when it is disembedded
from that society and assumes

00:42:51.999 --> 00:42:55.917
a life of its own and drives
what we do and how we work

00:42:55.918 --> 00:43:00.583
and how we consume and how
we think. We ultimately have

00:43:00.584 --> 00:43:05.998
an unsustainable system because
it eats out the social relations

00:43:05.999 --> 00:43:10.501
and also the relation
to the natural environment.

00:43:12.417 --> 00:43:15.458
- In Greece, the place where
Dimitris Christoulas shot

00:43:15.459 --> 00:43:18.501
himself had become a shrine.

00:43:19.334 --> 00:43:23.501
His funeral, turned into
a political demonstration.

00:43:31.209 --> 00:43:33.666
- Polanyi, in \"The great
Transformation\" pictured

00:43:33.667 --> 00:43:37.998
society as an irresistible
force, meaning the coming of new

00:43:37.999 --> 00:43:44.291
market institutions running up
headlong against an immovable

00:43:44.292 --> 00:43:49.750
object, which was society
itself. And the reason one ran

00:43:49.751 --> 00:43:55.041
into the other is because
the new market economy cast

00:43:55.042 --> 00:43:59.709
a kind of a net
covering everything.

00:44:38.999 --> 00:44:43.208
- What we\'re living through
right now is just dramatized

00:44:43.209 --> 00:44:46.416
conflict between
democracy and the market.

00:44:46.417 --> 00:44:51.416
My father was saying there
is a problem, there is

00:44:51.417 --> 00:44:55.500
a contradiction between
capitalism and democracy.

00:44:55.501 --> 00:44:59.374
Capitalism and democracy,
we have become used to have them

00:44:59.375 --> 00:45:03.999
presented to us as complements,
the two things go together.

00:45:04.667 --> 00:45:09.208
But that is, on closer
examination, not really

00:45:09.209 --> 00:45:14.833
the case. Not when capitalism
takes the form of this gross

00:45:14.834 --> 00:45:20.124
financialization and basic
capture of the political

00:45:20.125 --> 00:45:22.083
process.

00:45:22.999 --> 00:45:26.625
How many meetings we\'ve had
of Merkel and Sarkozy

00:45:26.626 --> 00:45:30.541
and the governor of the European
Central Bank? And they burn

00:45:30.542 --> 00:45:35.249
the midnight oil. And they come
make a big decision as though

00:45:35.250 --> 00:45:37.998
they want to solve it.
And then they go to sleep

00:45:37.999 --> 00:45:41.917
and they wake up
to find out in the morning

00:45:41.918 --> 00:45:43.082
what the market has to say.

00:45:43.083 --> 00:45:46.082
- Stock markets rallied this week
after EU leaders reached

00:45:46.083 --> 00:45:48.583
an unexpected degree
of consensus.

00:45:48.584 --> 00:45:52.166
- We have whole societies
with democratic institutions

00:45:52.167 --> 00:45:55.998
with democratically
elected leaders. But they are

00:45:55.999 --> 00:46:03.918
powerless in light of
the judgment of the market.

00:48:42.042 --> 00:48:45.416
- For Adam Smith, a free market
was a market that was free

00:48:45.417 --> 00:48:49.333
of \"rentiers\", meaning people
who received income without

00:48:49.334 --> 00:48:51.501
working for it.

00:48:52.584 --> 00:48:55.333
Today, a free market means
freedom for \"rentiers\",

00:48:55.334 --> 00:48:58.458
for the landlords, for
the bankers and what\'s called

00:48:58.459 --> 00:49:02.999
the finance, insurance
and real estate sector.

00:49:04.959 --> 00:49:07.625
Which is exactly the opposite
of everything Adam Smith

00:49:07.626 --> 00:49:12.292
and subsequent classical
economists were all about.

00:49:30.709 --> 00:49:34.374
- Karl Polanyi died in 1964.
His ashes were interred

00:49:34.375 --> 00:49:40.083
in Budapest, the homeland
he had left 45 years earlier.

00:49:46.999 --> 00:49:50.999
- There has been such
a renaissance. His ideas are

00:49:51.000 --> 00:49:53.501
more alive than ever.

00:49:56.792 --> 00:50:00.998
The economy has to be
subordinated. The economy is

00:50:00.999 --> 00:50:08.416
important, but it cannot
override and colonize,

00:50:08.417 --> 00:50:16.292
if you wish, all other aspects
of social life and society.