Capital in the Twenty-First Century
- 1h 43min
Adapting one of the most groundbreaking and powerful books of our time, Capital in the 21st Century is an eye-opening journey through wealth and power, that breaks the popular assumption tha... Read allAdapting one of the most groundbreaking and powerful books of our time, Capital in the 21st Century is an eye-opening journey through wealth and power, that breaks the popular assumption that the accumulation of capital runs hand in hand with social progress, shining a new light ... Read allAdapting one of the most groundbreaking and powerful books of our time, Capital in the 21st Century is an eye-opening journey through wealth and power, that breaks the popular assumption that the accumulation of capital runs hand in hand with social progress, shining a new light on the world around us and its growing inequalities. Traveling through time from the Frenc... Read all
At its core, "Capital in the Twenty-First Century" concerns how capitalism is currently operating in the industrialized world. Mainly the documentary offers a 100-minute overview of why and how economic forces are working the way they are in the present by using the unfolding of events and policies of the past as a guide. The core thesis is based on a book by Thomas Piketty, a French economist who wrote a book of the same title. In a nutshell, the documentary argues through its commentaries, mainly recognized intellectuals in economic theory, that monetary elites are pushing much of the political establishment to maintain an economic system which benefits the 1% and even the .01% and .001% of income earners. This system of self-regulation by the upper class was essentially how first world nations operated prior to the First World War (1914-1918).
The main thesis of "Capitalism" is that the current economic divides which are now occurring throughout the industrialized world are becoming, or may have already become, mirror images of economic systems of centuries past, such as from circa 1700 to 1915. Prior to the outbreak of the First World War, a wealthy elite class dictated how the economic structure would be run. Laws were passed by "democracies" which tended to benefit those at the top. Politicians back by wealthy elites with campaign contributions would maintain their economic interests. The middle classes would play second-banana to the economic constructs of the upper moneyed class. Sound familiar? It isn't coincidence that the rise of Nazi Germany was a direct outcome of economic hardship in Central Europe, which we'll get to later.
After the two world wars, this sensibility shifted drastically, especially with the worldwide Depression of the 1930's. After WWI and WWII, two things happened in terms of a shift of outlook, especially in Europe but also in the US. Soldiers made up mostly of the middle class basically fought and won the war against the Axis Powers (Germany, etc.). People realized that the middle class should have at least some of the benefits which were reaped previously almost exclusively by the elites. Also, the governments of Europe needed capital to rebuild. The middle class had been largely employed for the conflict, so the only people left to tax was the rich, which allowed a new middle class to develop. (You couldn't tax a middle class family in Germany or France whose house and property had been destroyed as a result of the war!)
This idyllic situation was short-lived, from about 1946 to 1975. Some economic downturns occurred, particularly in the US, in the 1970s. This allowed an opportunity for the monetary elites to regain not only some of the pie they had lost after WWII which was now going largely to the middle class but regain their power over the economic system. A new breed of politician emerged, conservative Republicans in the US and Conservative Party politicians in the UK. (After circa 1980, the so-called conservative southern "Dixiecrats" in the US began to disappear, now favoring the republican party and its agenda.) They claimed the economic problems were due to too much regulation of capital and too much taxes on the wealthy. Later, immigration would be added to the list of contributors to economic problems.) The doc argues that neither of these circumstances actually created the economic woes of the 1970's, which in large part were due to Middle East oil embargoes.
US President Ronald Reagan and UK Prime Minister Margaret Thatcher proposed a new economic outlook, labeled "tickle-down economics". The theory was by freeing up capital among the elites, such as lowering their taxes and deregulating finance, would allow for more investment. Yes, the elites would have more capital, i.e. more money, but the pie would grow and allow those of the bottom 90% to enjoy a the same economic slice of a supposedly bigger pie. Theoretically, if the pie is bigger, even if the slice is the same percentage, the slice will be bigger also. Hence, the economic benefits would "trickle down".
Everyone agrees that the former occurred: the top 1% and in particular the top 0.1% and .01% saw their pieces of the economic pie rise significantly if not exponentially in a bigger pie. (You can clearly see the staggering economic gains by the wealthiest between 1980 and 1990 when a valuable painting which fetched $1 million in 1980 would go for $25 million in 1990.) What didn't happen was the slices of the middle class didn't increase but at best remained stagnant, and those on the bottom saw their slices shrink. You could argue that the slices of the middle class in a way did shrink because their wages and incomes remained largely unchanged. In other words, they were getting a smaller slice of a bigger pie, not the same slice in a bigger pie. For example, say the pie was four pieces, and the middle class receives one piece, basically 25% of the pie. The pie increases to five pieces by 1990 under Reaganeconomics, but the middle class was still receiving one piece of a five-piece pie, now 20%.
Strangely, what's been happening now, a growing divide between the middle class and upper class, has been fueling the rise of populist and nationalistic leaders. Interestingly, these leaders are eerily similar to figures who rose up 100 years ago. They are against free press, advocate lower taxes, vilify institutions like hospitals and schools. As importantly, they tend to blame easy targets for economic woes: immigrants and minorities. (Donald Trump accused people from south of the US border for "bringing crime and drugs".) The rise of Donald Trump as president of the US is not a phenomenon in a vacuum. This populism, a backlash against the economic divides, has allowed for fascist leaders and ideologies to come to the fore. The vote in favor of Brexit and some eastern European far-right politicians are cases in point. Viktor Orbán, Prime Minister of Hungary. has led the country more towards a totalitarian state with less free press and much anti-immigration in a nation where the population is declining.
As one economist explained: the blame against ethnic and other kinds of minorities as the cause of economic difficulties are the wrong targets. Even if governments adopt policies to expel illegals and other immigrants from first world nations, there is little if no evidence to suggest that that in and of itself will create any kind of economic prosperity for citizens. The illegals and minorities are not the problem and expelling them on a mass scale probably won't create a significant number of jobs. Viktor Orbán has put into place all these anti-immigration policies in Hungary and there's almost no evidence these policies have helped Hungary's economic and social problems. Some academics in international economic policy have argued his policies may be hurting his own country in the long term.
The documentary points out that Nazi Germany propagated that Jews and other minorities were responsible for their economic woes of its country in the 1930's. Adolf Hitler expanded the rhetoric to include other European countries. This outlook basically was Germany's justification to invade other European countries who were responsible for their demise. (There was some truth to this because the Treaty of Versailles, which ended WWI, forced Germany to pay huge monetary penalties and compensation which destroyed its economic recovery. Eventually, the policies were largely unenforceable and allowed Germany to augment their military infrastructure. They could have tried to renegotiate the terms of the original treaty but thought it would be much more fun to go to war instead. By 1945, much of Germany was completely destroyed, essentially the result of economic and international policies that imploded on its own country.
Could these economic disparities also lead to a military crisis not unlike WWI and WWII? I think the question is open and much more relevant today than it was even 20 years ago. The solution proposed by the economists is to return to regulating and taxing the elites again as they did from circa 1946 to 1975. Is the political will there to achieve this? It's difficult for politicians to bite the hands that feed them. As long as the elites control the politics, it will be an uphill climb.
- Sep 14, 2020