Four Horsemen – Feature Documentary – Official Version

All experience has shown that mankind is
more disposed to suffer – while evils are sufferable – than to right themselves by abolishing the forms
to which they are accustomed. American Declaration
of Independence. A Renegade Economist film People are awfully forgiving. They just don’t understand what has been done to them. We are at an epochal shift. We’re at a point where the West could tip into a complacent
and quite well off redundancy or we could play a decisive role
in the future. What the banks did
was reprehensible. That was why there was the outrage
at the greed of the bankers when we gave them money
that was supposed to help them lend to others but they decided to use that money
to pay themselves bonuses – for what, for record losses? We are governed
by corporations today. often by corporations that
don’t have very much interest in the United States of America. I don’t know what happened man,
what happened to the U.S., it went so far in the ditch. You know, what…
at what moment did it all go bad? Was it Disco?
Was it Donna Summer? Is that what killed America? We are entering
The Age Of Consequence. A rapacious financial system, escalating organised violence, abject poverty for billions and the looming
environmental fall-out are all converging at a time
when governments, religion, and mainstream economists
have stalled. War, Conquest, Famine and Death – the Four Horsemen are coming. FOUR HORSEMEN This is not a film
that sees conspiracies. It is not a film
that mongers fear. It is not a film
that blames bankers or politicians. It’s a film that questions
the systems we’ve created – and suggests ways
to reform them. Over centuries, systems have been
subtly modified, manipulated and even corrupted often to serve
the interests of the few. We have continually
accepted these changes and, because man can adjust to living
under virtually any conditions, the trait that
has enabled us to survive is the very trait
that has suppressed us. Most societies have an elite and the elites try
to stay in power. And the way they stay in power is not merely by controlling the
means of production, to be Marxist, i.e. controlling the money, but by controlling the cognitive map,
the way we think. And what really matters
in that respect, is not so much
what is actually said in public but is what is left un-debated,
unsaid. For centuries gatekeepers
have manipulated our cognitive map. But in 1989 a computer scientist
by the name of Tim Berners-Lee implemented the first
successful communication between an HTTP client
and server. The World Wide Web was born. It has since
unleashed a tsunami of instantly accessible,
freely available information. Just as Gutenberg’s printing press
wrestled control of the cognitive map away from an ecclesiastical
and royal elite, today the internet
is beginning to change governments, finance
and the media. We are
at the cusp of change. But to enact it
we must first understand the things that have been
left unsaid for so long. To do that we need context from people who speak the truth
in the face of collective delusion because to understand something
is to be liberated from it. EMPIRES All a great power has to do
to destroy itself is persist in trying
to do the impossible. Stephen Vizinczey At the end of World War II, we had 50% of the world’s
gross domestic product, we were making 54,000 airplanes
a year, 7,000 ships, etc etc. We were the new Rome. And we recognized it, and devised
a power management scheme in the 1947 National Security Act
to, we thought, manage it and it worked fairly well
during the Cold War. But we haven’t done anything since
and I think that is another sign of our inability to grasp
the “new world”, if you will. Empires do not begin or end
on a certain date. But they do end, and the West has not yet come to terms
with its fading supremacy. At the end of every empire
– under the guise of renewal – tribes, armies,
and organisations appear and devour the heritage
of the former super power, often from within. In his essay
‘The Fate Of Empires’, the soldier, diplomat and traveller
Lieutenant-General Sir John Glubb analysed the lifecycle of empires. He found remarkable similarities
between them all. An empire lasts about 250 years,
or ten generations, from the early pioneers to the final conspicuous consumers
who become a burden on the state. Six ages define
the lifespan of an empire. The Age Of Pioneers The Age Of Conquests The Age Of Commerce The Age Of Affluence The Age Of Intellect Ending with bread and circuses
in The Age Of Decadence. There are common features
to every Age Of Decadence. An undisciplined,
overextended military, the conspicuous
display of wealth, a massive disparity
between rich and poor, a desire to live off
a bloated State and an obsession with sex. But perhaps
the most notorious trait of all is the debasement
of the currency. Purchasing power of $1 The United States
and Great Britain both began
on a gold or silver standard, long since abandoned. Rome was no different. So it started on a principle
that was very sound and it was on a silver standard. But as it corrupted
further and further and further the Roman denarius got to the point
where it was basically a copper coin and they learnt how to plate
and it was washed in silver and in circulation
the plating came off. And at the end
all the senators that really did at one time
represent the people only were interested
in representing how much wealth
they could steal at the top. Great empire wealth
always dazzles but beneath the surface
the unbridled desire for money, power
and material possessions means that duty
and public service are replaced by
leaders and citizens who scramble for the spoils. Historically all the signs of
the demise of the empire are beginning to develop,
some are more trenchant that others. This current financial
and economic crisis, that sort of thing, always
accompanies the demise of empire. The people of Rome were constantly being distracted
by the gladiatorial events and the politicians knew
that they did this. Whenever there was unrest
among the people they had a huge event going on and they created a new event
with lots and lots of gladiators. And every day,
we‘re doing that. That is a common trait
of declining empires. And so today,
in the U.S. for example, you find a tremendous emphasis
on all kinds of television programmes that distract people
from what’s really is going on. Sports is a big part of that,
as it was in gladiator times. In essence,
we’ve been lulled into a lethargy and we’ve accepted it. Just as our sports stars
today earn vast sums, so did Roman charioteers. In the 2nd century one by the name
of Gaius Appuleius Diocles amassed a fortune of 35 million
sesterces in prize money – equivalent to several
billion dollars today. Strangely, perhaps,
there is another profession that is disproportionately hallowed
as an empire declines. The Romans, the Ottomans
and the Spanish all made celebrities
of their chefs. And this again is typifying
the end of an empire, where things were so great
we have this last oomph of momentum, that we used to be great,
and we felt great, and we don’t feel it anymore. So everyone is out
searching for it. Well, maybe it’s in the best food
or the best clothes or the best music
or the best movies or a reality TV show
or another magazine. But you can never get enough
of what you don’t need. What you need
is a strong moral conviction that is pervasive throughout
the society… and integrity reigns. There is a vast apathy. There is a vast amoralism,
even a political nature to it, that is to say there are vast numbers
of people who don’t give a damn. And so there is this
– natural, I suppose – entropy, any living organism
which an empire is of course, over time dies. The question is:
How does it die? Does it die in a violent
cascade of events? Or does it die
over a long period of time? The Baby-Boomer Generation
were born into this Age of Decadence. Perhaps unwittingly they’ve broken
the unspoken intergenerational contract. Through unfettered consumerism,
spiraling house prices, and a desire for eternal youth, the Baby-Boomers have squandered
future generations’ inheritance. My generation, the generation
right after my generation, I think we forgot that little phrase
in the preamble to our Constitution which says “and our posterity.” All of a sudden
it became “us”. Period. The Baby-Boom generation
which I’m a part of has gone and done the biggest
misallocation of capital in the history of mankind. We have had cheap oil or cheap energy
is a better way to phrase it, we have had an abundance of ideas and we have chosen a system
and perpetuated it that is probably
one of the worst ways to use the blessings
that were bestowed upon us and we are going to pay a price
for that. Human beings are inconsistent
and paradoxical. We hope for peace
and immortality, but continually invent new ways
to destroy each other. We’re capable of the kindest,
most noblest acts; and the most horrific
atrocities. Human beings
are complex creatures. I mean for example we‘re capable
right now, at this minute, of acting in such a way
as to make it likely, if not certain, that our grandchildren
are going to face terrible disasters, and we are consciously acting
to accelerate that likelihood even though we all
love our grandchildren. How can we be
more contradictory than that? In spite of all
the economic activities of last 50, 60, 70 years,
since the Second World War, and all the industrialisation,
we have not yet managed to solve the problem of poverty,
deprivation, hunger, malnutrition. Millions of people every night
go to bed without food, and millions of people
are throwing away their food. Waste on the one hand, and poverty and deprivation
and hunger on the other hand. Malnutrition on the one hand
and obesity on the other hand. What kind of system
have we created? Why, with such brilliant
knowledge on the planet, are we still struggling
to distribute wealth fairly? How has the human race developed a
flawed system of government and economics that serves the few
at the expense of the many? And with such poverty
in an age of plenty, why have we not
had the will to change such a vicious
social structure? Greed is the fundamental kind of
ingredient for the immoral economy. The problem is not that
there is not enough in the world. People say that there is poverty
we have to create more wealth. There is enough in the world
for everybody’s need – as Mahatma Gandhi said, but not for anybody’s greed. But is it just greed,
or does it go deeper than that? Is the problem systemic? BANKING When plunder becomes
a way of life for a group of men
living together in society, they create for themselves
in the course of time a legal system
that authorises it and a moral code
that glorifies it. Frederic Bastiat As a civilization
we’ve obviously had a great run. We’ve done very well –
we had the Industrial Revolution; we survived that. We built a lot of
modern military technology; we have survived that, so far. We built a banking system, and we’re still struggling
with that part of it, but you know,
we’ve had a good run. It’s kind of like when I was working
on Wall Street for 7 years I had the experience that some people would
have working at a meat processing plant, they become vegetarian, and you work on Wall Street
and you see how these banks like Goldman, J.P. Morgan,
these other banks make money, when you see money,
it kind of makes you sick! Well, I think if the people knew
what the banking system is up to, as Henry Ford said, there would be
a revolution tomorrow morning. The fact is most people think that
what a bank does is lend you money that someone else
has put in the bank previously. But what a bank actually does,
what a commercial bank does, is to create money from nothing,
and then lend it to you at interest. If I do that, if I manufacture money
in my own home it’s called counterfeiting. If an accountant creates money
out of nothing in the company accounts, it’s called
‘cooking the books’, but if a bank does it,
it’s perfectly legal. And so long as you allow
fraud to be legalised then all kinds of problems are going
to pop up in the economic system you can’t do
anything about. Private banks
create money out of nothing and lend it at interest. Now, that sounds absurd. When I teach sophomores, you know,
about money and banking, and how banks…
they never believe it. And so you have to go through it
again and again, ‘Yes, banks really do create money,
they really do, here is how it happens.’ And it’s absurd!
And they’re right to doubt that that could possibly be
what’s really going on. But it is! Now if the banking lobby is very strong,
they’re going to say: “Well, we don’t want to change this system,
we’re making so much money out of it. What we have to do is: Try and convince the people that
it’s their fault, that their wages claims
are too high and that’s why we’re having
lots of inflation,” or “People are
speculating on housing and that’s why
house prices are going up.” What they’re not
going to say is that this is happening because banks
are creating money out of nothing and pumping it into the system,
and that’s why prices are going up. But how is it that we’ve ended up
with a system in which banks have the power
to create money? Since 1971,
when President Nixon took the United States off
what was left of the gold standard, the world has operated under a
system of money known as ‘fiat’. The dollar, the pound, the euro
are all government fiat currencies. Fiat is a Latin word
meaning ‘let it be so’. It is the law that this
government currency be money. Indeed,
without that legal enforcement and the fact that we must pay
taxes with this money, that dollar bill or that computer digit
that represents a dollar would be pretty much
meaningless. Only the government has
the power to issue fiat money, but banks can create it
through lending. Over the last 40 years, since this system of fiat money
became the global norm, the supply of money
has grown exponentially. In fact, we’ve have seen the greatest
growth in the supply of money in history. But who benefits? Of course, those that have
the power to issue money: governments and banks. Then, those companies and individuals
that get this money early. They can spend it before the prices
of the things they want to buy have risen to reflect
the new money in circulation. In other words, they get services,
products or assets cheap. But prices soon rise, so holders of assets,
such as houses or shares, will then see gains without there
necessarily being any improvements to the company
or house in question. Often this can lead
to speculative bubbles. But what about those
at the bottom of the pyramid? Those on fixed
wages or incomes, those who live
in remote areas or those with savings? By the time this newly created money
has filtered down to them, the prices of the things
they want to buy have increased, their savings buy them less
however, and their wages
remain largely unchanged. In some cases
they have to take on debt just to be to afford the things
they were previously able to buy, which means they have
to go back to the banks. In reality, this process
of creating money only redistributes wealth from the bottom
to the top of the pyramid. And thus that ever-increasing gulf
between rich and poor gets bigger and bigger… …and bigger. Well… when you get off the gold standard
and you go into a fiat money currency combined with a fractional
reserve banking system, you end up compounding debt faster than you can ever
possibly produce to support that debt. So eventually you are going to
find yourself back into debt slavery. And that’s what’s happened
in the U.S. For every dollar GDP,
for example, in the U.S. it now also creates something
like $5.50 worth of debt, because this is what happens
when an economy flips over and basically capsizes. And of course the
government solution now to address all the problems is basically to create more debt. You can never get enough
of a currency that doesn’t work, you can print it till kingdom comes
but you can’t print wealth and you can’t get yourself out of debt
by making more debt. If you could print wealth Zimbabwe would be the largest, most
prosperous country on the planet – we all know it doesn’t work. Of the money in the world today,
97% is of it is debt. The French philosopher Voltaire
once said, ‘All paper money eventually returns
to its intrinsic value – zero’. For three generations the world watched the fight
between capitalism and communism. But in the 1980’s the Russian economy
started to collapse, the Soviet Union capitulated and so-called capitalism
reigned supreme… Before 1989 we had a battle
between communism and the market. And in that battle
there was a sense of ‘let’s not expose the flaws
in the market economy.’ This is too important
of a battle that you don’t criticize
‘our team’ while we’re fighting
‘their team’. And their team,
social authoritarianism, with a failure to deliver wellbeing
to their society, it was very clear that if you had
to choose between these two, which was better? Communism failed first
for various reasons: it was inefficient, human rights
lack of respect and so-forth. So capitalist West has been continuing
in a triumphalist mode thinking
“Our adversary has failed, that means
we’re doing everything right”. Both systems are trying
to do something which is fundamentally impossible: Grow forever. And they’re both going to fail.
One failed first. Capitalism’s going to fail…
later. Or it’s failing now. America right now
is in a very interesting position. Because in the past
200 – 300 years of its history it’s a culture and country
which has almost always existed on the assumption that
resources could be expanded. If there was a problem
you always tried to deal with it by expanding the pie,
‘Go West young man’. Make the pie bigger so that
everyone has got a bigger piece. Now it’s facing a world
where possibly resources are beginning to be
more constrained, and where it’s going to have
to divide up that pie, and inflict pain on people. And that’s something
which it is not well prepared for. How has the country
moved so far from the intentions
of its founding fathers? How has the American dream
become so distorted? Over the last 30 to 40 years capitalism has taken
this extreme form, and a lot of it goes back to
the economist Milton Friedman, from the Chicago School and Ronald Reagan,
and Margaret Thatcher, and others buying into
these policies, that really encouraged people
to take on huge amounts of debt, encouraged privatisation, smaller governments supposedly, although bigger militaries,
so actually… …the government spending goes up.
U.S. Military Spending. deregulation, getting rid
of rules that govern the people who run our institutions,
especially our corporations. It’s as though we are suddenly
are supposed to believe that the human beings who stood
at the top of corporations don’t need to be regulated.
They are some sort of… gods! Milton Friedman,
his protégés, the Chicago Boys, and the neoclassical ideology beat the classical approach
to economics and became the framework
for what we today call capitalism. There are two main
competing economic approaches which determine
how we humans manage the world
and distribute wealth. These are the classical
and neoclassical schools. The classical school favours
less government interference, more personal autonomy and recognizes that humans cannot
function without natural resources. The neo-classical school, which has a more dismissive view
of natural resources, thinks government
should rule the economy, solve social problems and leave the free market to
look after the distribution of wealth. The neo-classical school emerged
around 100 years ago due to vested interests’ desire
to protect their assets. This meant that neo-classical
mathematical models and assumptions were divorced from reality. They are based on
“what ought to be” instead of the classical models
which are based on “what actually is”. It’s these neo-classical models
– which favour large corporations – that have been used
to legitimise the financialization
of the global economy. Championed by Ronald Reagan
and Margaret Thatcher, neo-classical economics
still dominates policy-making today. The Reagan revolution,
as it’s called in the U.S., obviously the
Reagan-Thatcher revolution, to think about it
more globally was a big change
in power structure and a big transfer
of opportunity and wealth. Now it’s not that
the poor gave it to the rich, it was a transfer
within the well-to-do, so that the financial sector
in particular in the U.S. for example, but also
in the UK and some other places, became vastly more profitable, and wages in that sector went up a lot, we focused on bonuses, but also base
salaries went up – overall compensation. So there is a transfer from the
non-financial part of the economy to the financial part
of the economy that actually is unprecedented as far as we can see
in any of the available data to us and I’m talking about all of
the recorded human history. In 1932, in the aftermath of America’s
Great Stock Market Crash, a piece of legislation was passed
to protect society. The Glass-Steagall Act
was introduced to separate
ordinary high street banking from investment banking. 67 years later,
in 1999 – under the influence of
Treasury Secretary Larry Summers and his predecessor Robert Rubin – President Bill Clinton repealed
the Glass-Steagall Act. Once again banks could take
ordinary depositors’ money and speculate with it
on virtually anything they liked. Wall Street has become
a very particular type of casino. And it’s unfortunately not the kind
of casino they have in Las Vegas which is, you know, a perfectly
legitimate form of entertainment. It is a casino
that has massive negative repercussions
on the rest of society. So it’s not just losing your money
on a few wild nights, it’s about the way in which
those organisations lose their money impacting the whole of society leading to a massive loss of jobs. U.S. Unemployment Rate This unfettered gambling pushed the entire global financial
system to near collapse. With balances
and debt obligations larger than the GDP
of entire countries, the banks had become
too big to fail. The West was unprepared and bankers met their reeling
and disorientated governments: “You have to bail us out,
we need money, if you don’t give us the money
the whole thing goes down. And what are you going to do with
millions and tens of millions of people who have lost everything
in their bank account? You will have a revolution
on your hands. So fork over the money. Borrow… borrow the money, create it out of nothing
and give it to us, so that we can
face our problems and not go under… or otherwise.” And this is what Mr Hank Paulson
did in the U.S. Congress. He just went there one day
and he told them: “We need $700 billion,
and we need it now – or else.” Is this system we call capitalism
really capitalism? In a capitalist system
government is supposed to be small. But today the state is more bloated
and invasive than it’s ever been. Individuals and companies are
supposed to operate in a free market. Good enterprise
is rewarded with profit and flawed enterprise
with failure. But during
the 2008 banking crisis the people saw
the Western economic system divided in a way they were told
could never happen. Socialism for the rich,
capitalism for the poor. And in America for example the banks that got in trouble
got bailed out by the government, that’s socialism. And they… people are arguing against
socialism in America, and yet this is probably the most socialist
country in the world right now. We have a system which isn’t even
a proper capitalist system; rich people make mistakes,
they don’t get punished, poor people make mistakes
and they get punished, or even worse,
that they don’t make any mistake and they are forced to pay
for the mistakes of the rich. When the taxpayer
is footing the bill for the misplaced
speculation of bankers then suddenly instead of the economy
serving the human being, the human being is now
in perpetual service to amoral financial organisations. It was the Head of the
Federal Reserve Bank, Alan Greenspan who, after 9/11,
slashed interest rates to encourage lending. Bankers needed
new participants to keep cash flowing
into a system that had become
a global pyramid scheme. All this newly created money
entered the housing market and created unprecedented inflation – house prices rose and rose. New mothers were forced back
into the workplace to service huge home loans and the Anglo-American dream
became all about land speculation. The housing market in the West
isn’t about ownership. The housing market’s
in the West because it’s the only way
ordinary people can get ahead, and ordinary people
can’t get ahead but by wages. What we’ve created is a mass
bubble economics around housing, as that sucks in
a huge amount of capital, takes capital for genuine
innovations in the economy, and puts it
into a speculative use that has no genuine
productive outcome. It’s interesting, if you talk to
people in Germany, for example, they don’t see a connection between
owning a piece of property and their being inclined
towards being democratic. There are lots of people
who rent their housing there and they are perfectly comfortable
with that arrangement. But it is true that
in somewhat different contexts both Mr Reagan and Mrs Thatcher
pushed for more people to own housing, and actually this is part
of the problem because if you push people
to buy housing before they are ready, if you push
very dubious loans on them, and they don’t understand what
they’re getting themselves into, you can have huge
adverse repercussions. Exactly what led to,
in part, the subprime housing crisis
in the United States. That’s not anything to do
with democracy that’s just a bad economic idea. The breakthrough that occurred
around the year 2000 in the U.S. was when bankers found out
that the poor are honest. They realised that if you’re poor,
if you’re not rich, you have a different set of values and you think
that a debt is a debt and it’s something
that has to be paid. And the people will try to pay
the debts that they are stuck with, even if the debts are not valid. Even if the debts are
much more than they expected, even if they really
can’t pay the debts. The lending and banking
institutions, when they drew up contracts with interest rates,
with flexible interest rates, I think they knew
in the beginning that these problems
were going to come back later on when folks weren’t going to be able
to afford the mortgages. As the interest rates increased,
they put a lot of people in situations where they were
taking food out of refrigerators, taking kids out
of higher education, they’re not able
to afford college anymore, and it is making a really,
really bad situation worse. The banks engaged
in what was a criminal conspiracy, to charge more
to the Blacks and Hispanics. The banks got together,
backed the Bush administration, to block the state prosecutions
of racial lending in order to exploit
and charge more to the minorities. These were loans
which were made by one of the major lenders in the city
and in this country, Wells Fargo, in which Wells Fargo targeted
minority communities in the city; put borrowers into loans
that they could not afford, put borrowers into loans
that were of the subprime variety, therefore more expensive and
less advantageous to the borrowers. Hiding predatory lending practices in the small print
of complex financial products was only ever going
to enrich one set of interests. Many of the communities in which
African-Americans live in the city, were establishing momentum, there was development activity
that was occurring, we were seeing signs of vitality in many
of these communities, and… the results of the
Wells Fargo foreclosures and the subprime lending practices
of that lender, and others, has significantly impaired that
progress and brought it to a halt. They don’t come
into the heart of it. Like you in the heart of it
so you see, they don’t really see the trouble if
they don’t come into the heart of it, they stay on the outside of it. That’s like looking
at the cover of a book and seeing the outside of a book
but if you don’t go inside the book, then you will never know
what the book is about. So they’re not worrying
about nobody else but themselves. And I think it’s wrong, because if they
come in the heart of it and they see, they’d be willing to help. What happened in Baltimore is just one example of what
is happening all around the world. One way to frame this injustice is by branding it a race issue. But when we look really closely we can see that there is
something at play here that transcends race. Profit. Not an accident for instance,
that we had the deregulation of our financial industry
that was such a disaster. The lobbyists
of the finance industry amount to five
per congress person. They pay five people
for every congressman to explain to them,
persuade them, that they should pass legislation
that is favorable to the financial industry. The poor people
who are devastated don’t have the money. They couldn’t hire
five per congressman. So the way our democracy works –
it’s an unlevel playing field. The financial sector
has acquired enormous power, partly through political contributions,
so buying favours, but mostly through
ideological control, convincing people
that finance is good, more finance is better and unregulated finance
without limit is best. And that is really
the cornerstone of this, what we call in the U.S., the
Wall Street-Washington corridor. I mean if people need any proof
as to who is controlling Washington, when the bailout came
after Lehman Brothers collapsed, 80% of the population
were against the bailout. Notwithstanding that,
the Congress passed the bailout just showing,
in my view anyway, that it’s really under the control
of banking interests. It’s not a reflection
of good democracy when a company, a group
of companies, an industry, says: “Our interests are more important
than the national interest.” How can that happen?
Very easy: That’s the role of campaign
contributions, lobbying in America’s political structure. We have a flawed democracy. This is an advanced oligarchy,
in the sense that its main mechanism
of control, if you like, is through convincing people
that you really need, for example, the 6 biggest banks
in the United States, in the particular
form they exist today, with the very light level
of regulation. And if you don’t have them,
if you try to change that, all kinds of awful things
will happen. And this is not
really blackmail. It sounds like blackmail, but they
convince you it’s not blackmail, it’s just the way the world is, there’s
nothing you can do about it. Oh my goodness, you just
have to cooperate with them. Yeah, it’s very clever. The Fed is essentially the lobbyist for the
commercial banking system. When you say you want to turn
regulation over to the Fed, you are saying
the financial sector and Wall Street should be self-regulated. And Wall Street
has veto power over whoever is going to be
the Head of the Federal Reserve. As long as you give veto power
over the regulators to Wall Street, as long as you pick
the bank regulators from the banking industry itself, you can forget any thought of calling it
“regulation”. It’s “deregulation”. And to call it
“regulation” instead of “deregulation” is using Orwellian
double-think. Democracy
is government by the people. Plutocracy
is government by the rich. In a typical plutocratic state economic inequality is high, social mobility low, and, because of continuous
exploitation of the masses, workers find it nearly impossible
to climb out of poverty. The Equal Voting Rights movement
in the early 20th century abolished a system where rich people
had more votes than poor people, but today lobbying
has put pay to that and reduced the
American political system to a mere clearing house
for the concerns of the rich. The Goldman Sachs machine
is one of using profits to buy
influence in Washington, to change laws to make it easier
to make money on Wall Street, to be used to buy influence
in Washington. So it’s a self-reinforcing
malfeasance machine that is continuing to grow as a parasite in the economy and continuing to kill the host. Famous for claiming it did
‘God’s work’, Goldman Sachs is one of the most influential
investment banks in the world. Its alumni often occupy
positions of great influence in governments
and central banks. In September 2008, barely a month before
the stock market crash, Goldman – supposedly
a pillar of the free market – changed its banking status
from investment to commercial. This meant it was now eligible
for state protection. Socialism for the rich,
right there. Goldman Sachs are extremely
efficient at what they do. Their task is to make money, they make bank robbers
like Willie Sutton look like modest amateurs. They’re huge bank robbers, but it’s legal. The system is set up
so that they can do it. In the recent years
they have been selling securities put together from mortgages
that they knew were worthless, so they are selling these things
to unwitting consumers, making a ton of money
out of it. Meanwhile, they are betting
that they’re going to fail because they know that
what they are peddling is rotten. So they placed bets with credit
defaults, and lots of other things with the huge
insurance company AIG, and that was insuring
Goldman Sachs against the failure
of the stuff they are peddling. During America’s subprime collapse Goldman traders Michael Swenson
and Josh Birnbaum made a $4 billion profit
by short selling junk mortgages. Backed by Dan Sparks, internally Goldman Sachs called
their position the ‘Big Short’ and bet against their own clients. Senator Carl Levin called Goldman Sachs
Chief Executive Lloyd Blankfein to a Senate subcommittee
to testify under oath. Much has been said about
the supposedly massive short Goldman Sachs had
on the U.S. housing market. The fact is, we were not consistently
or significantly net short the market in residential mortgage-related
products in 2007 and 2008. We didn’t have a massive short
against the housing market, and we certainly
did not bet against our clients. Riding the Big Short in 2007
made billions of dollars for Goldman. And so far, they’ve got away scot free
with this massive heist. So they’re now back, bigger
than before, richer than before, biggest profits they’ve had
in history, huge bonuses… They’re doing great! A lot of what they are doing has,
in fact, probably… maybe all of it, has almost nothing to do
with the benefit of the economy. Can there be any objection to genuinely talented people
earning big money if they bring something new
and tangible to the world, if they take great personal risks
with their own money, and actually bring
greater prosperity for all? In a free market,
if I have a brilliant idea that I can run an automobile
on grass clippings, as an example, and I produce that car, my motivation might be
to make money. But if the market says:
“My goodness, this is the greatest automobile
ever invented by mankind”, and I make a billion dollars,
I’ve not only served myself but I have served everyone else
that needs transportation. And that is the brilliance
of our free market, is that paradox that you can serve yourself
and simultaneously serve others. And that’s what it’s all about. But how many of the general public
have achieved greater prosperity through a banker’s bonus? It was against the holy backdrop
of St Paul’s Cathedral in London that Goldman Sachs Vice-Chairman
and mouthpiece Lord Griffiths, gave insight into
how certain bankers really think. The devoted Christian
defended extortionate bonuses: “I am not a person of despair,
I am a person of hope. And I think that we have
to tolerate the inequality as a way to achieving greater
prosperity and opportunity for all.” A fundamental Christian view,
and I would say of Islam as well, and certainly of Judaism, is that wealth is to be shared. Money has to be shared.
You can’t take it with you. And from that
develops a whole lot of stuff about justice and
the economy and so on. And we’ve lost that,
and instead we’ve got people
accumulating more and more. And I just think it’s… I just think it’s disgusting
that people have… lost their homes,
they’ve lost their jobs, they can’t pay
their mortgages, from bankers
who made a big mistake and then paid enormous
bonuses. I am sorry, that is simply wrong, and I can’t understand why we are not more… vociferous about that. When rich people tell you that
they specifically have to be rich through these egregious
rip-off mechanisms, that’s just self-serving
propaganda and it should be disregarded. It is true that if you… when you organise human society,
some people get ahead and some people struggle. That’s a natural mechanism. But saying: “Oh,
we’ve got to have inequality therefore Goldman Sachs
must be organised along the following lines”, that’s a complete non-sequitur. At what juncture, what point, does morality enter
into economic calculus? In a way, many people think that
Adam Smith gave us a free pass; a way not to think
about morality, because what Adam Smith
said was that individuals in the pursuit
of their self-interest are led, as if
by an invisible hand, to the general well being
of society. Now let me make it clear,
Adam Smith didn’t really say that. That is, Adam Smith
was very much aware that businesses
when they got together conspired against the public
interest, raised prices, he was aware of monopoly, he was aware of
the importance of education, that the private sector
couldn’t provide, so he himself is aware
of all of the limitations, but his latter day descendents have forgotten all those caveats. Adam Smith was the godfather
of classical economics. But since its publication, his work has been used
as a political football – financiers twisting his words
to suit them. Lord Griffiths advocates ruthless
individualism to push this idea that if bankers get rich
then we get rich too through a process known as
Trickledown economics or Horse-and-Sparrow theory. If you feed the horse enough oats some will pass through
to the road for the sparrows. The idea is that extreme wealth
concentrated on small minority will eventually trickle down
to everyone else. But it doesn’t work. Because by the time
the money reaches the people at the bottom of
our money pyramid, it has lost
its purchasing power. But the public are now confused as to why our political leaders
have allowed this to happen and quite naturally,
now ask: Why? Because our political processes
are badly flawed. They are badly flawed because of the dependence on
lobbyists and campaign contributions. So that’s why my view, and a view
of I think a lot of people, is that we have to restructure
our political processes to give more voice
to the ordinary citizen and less voice to the interest group,
to money groups, to those who have taken
such a large role in shaping our tax code
and our regulations and so forth. I stood on the front step
of Colin Powell’s house. And I look at him and I say
“What next, Boss?” And he says
“What do you mean?” And I said “What next…
where are you going next?” “I am writing a book.” I said “I know you are going
to write your book, but you are not going to do that
for the rest of your life, where are you going next?” He said “Maybe
a Cabinet position, but first… but first… money.” I said “Money?”
He said “Yeah, millions. That’s the only way
you can be a Cabinet officer in the American government” “Oh, wow.” The Democrats and the Republicans
are beholden to corporate interests, and until they become un-beholden
to those corporate interests we will never have
a well-governed republic. TERRORISM Political language… is designed to make
lies sound truthful and murder respectable, and to give an appearance
of solidity to pure wind. George Orwell The inherent iniquity in our system
of money, banking and politics has not just had consequences
domestically, but also on a
massive scale globally. Western leaders have presented their military campaign in Iraq,
Afghanistan and Pakistan as a moral obligation. But are there
other reasons for it? The first financial beneficiary
of America’s foreign policy is the military. In particular, those who supply it
with arms and equipment. The military has won wars, but how successful has it been
in its bigger aim to eradicate terrorism? The drone attacks
not only failed but they’ve created
extra extremism. They’ve helped in
radicalisation of youth in the North West Frontier and also in
certain parts of Punjab and Pakistan. And because time after time…
And sometimes, you know… There’s a feeling that America
does this deliberately, to de-stabilise Pakistan. I am not so sure about that,
but I certainly think those people who
actually support this policy, every time you kill ten,
the so called ‘terrorist’, you create 500 more,
because they see the drone attacks as an attack on the
sovereign state of Pakistan. If they really wanted
to flush them out, there was no need for a
huge military operation in Swat, causing the entire district to become
internally displaced persons. The population of Swat
is 1.8 million, there are 2.3 million refugees
in the country, the whole district
has been emptied. This wouldn’t have
been necessary if they had carried out a surgical
commando operation to get the militant leaders. But they allowed them
to escape, all of them. After the military,
the next financial beneficiary are those who win the contracts
to conduct the rebuilding process. In the West, people might even
feel optimistic when they hear that the U.S. is pumping tens of billions
of newly-created dollars into developing nations
to build infrastructure. But often this too doesn’t seem
to achieve the publicized goals. Is there another reason
we give these countries aid? We economic hit men have created
the world’s first truly global empire. And we’ve done it primarily
without the military. We work many different ways, but perhaps the most common is
that we’ll take a Third World country that has resources
our corporations covet, like oil, and then arrange a huge loan
to that country from the World Bank
or one of its sister organisations. However, the money never
actually goes to the country. Instead it goes
to our own corporations to build infrastructure projects
in that country, power plants, highways,
industrial parks, things that benefit a few
wealthy families in that country, as well as our corporations, but don’t help the majority
of the people at all. They are too poor
to buy electricity or drive cars on the highways, and don’t have the skills
to get jobs in industrial parks. But they are left holding
a huge debt. Infrastructure… which has used heavy loans from the World Bank and IMF, and made from grounds
from Western countries, they’ve all gone into benefitting
the elite and the feudal classes, and they have not
benefitted the people. A lot of money goes to these consultants and
companies from the West, who charge
huge amounts of money and actually the real money
on projects and on ordinary people is very limited. The masses
have very little already, so those landlords
who have the infrastructure and who are going
to make money because of the infrastructure
that is built through their roads, they will prosper. But the ones who
don’t have any resources, they’ve not had jobs, there isn’t an
economic activity for them in terms of
manufacturing goods, so they can sell
and they can also prosper. When you don’t have that,
what do they do? They resort to joining the Taliban, because they see
the enemy coming in and taking away
what little bit they have. President Obama, I understand,
wants to invest $7.5 billion in Pakistan’s infrastructure to alleviate poverty and, you know,
take away all the divisions, and all the anti-American
sentiment over here. But whatever his reasons are,
we can do without it. In fact it’s the worst
possible thing he can do. This kind of help is actually
going to be a hindrance; it is just going
to make matters worse, it will bring this contrived
war on terror into our rural areas. How much of U.S. foreign policy
is genuinely altruistic? And how much is it influenced
by the banks and corporations that profit so tremendously
from it? America’s evangelism
of democracy is riddled with contradictions, not least of which
this idea of promoting democracy
at the point of a gun, or opposing regimes
which are democratic, but not in the way
that America wants. So too this idea that America has been
promoting free market capitalism has also been riddled
with contradictions. Because the reality is that American
firms tend to make most money when countries are
at the cusp of change, certainly American
financial firms, and in a sense, they want markets
that are changing structurally but not too free
and too transparent because they make money
when markets are a bit opaque. Is it any wonder developed nations are fighting
in underdeveloped countries when so many are making
so much money out of it, without ever really
having to face up to or even witness the
consequences of their actions? “So what if 5 million kids
died in Africa because of debt last year. You know I got a bonus
of a million pounds, and…” If I have that conversation,
I have had it with some… bankers who’ve been
in the business a long time, and… they listen politely,
they are very polite, very charming, and at the end they say: “Well, Tarek
it’s very lovely meeting you again”, and they go back to the office and do another loan deal
for Tanzania or something. I’ve known a lot of ‘terrorists’,
quote-unquote. I’ve met them,
I’ve interviewed them for books, I’ve known them since
I was an economic hit man, I’ve never met one
who wanted to be a terrorist. They all wanted to be with
their families, back on the farm. They’re driven to terrorism
because they’ve lost the farm. It’s been inundated with water
from a hydro-electric project, or with oil from oil derricks. Their farm has been destroyed. They can’t make a living
for their kids. Or in the case of
the Somali pirates, their fishing waters
have been destroyed. And that’s why
they’ve turned to this, it isn’t because they
want to be pirates or terrorists. Now there may be
a few crazy people, there are a few crazy people,
people with their nuts loose, there’ll always be serial killers,
there’ll always be crazy people, maybe Osama bin Laden
is one of them, but they do not get a following unless there’s a terrible
injustice going on, and people are starving
and they’re deprived, and then they will follow
these crazy people because they seem to offer
an alternative. If we want to do away
with terrorism, if we want to have what we
in the U.S. call ‘Homeland Security’, we’ve got to recognise that the whole planet
is our homeland. What does the word
‘terrorist’ actually mean? Many “terrorists” would sooner
describe themselves as ‘freedom fighters’. Could it be that
the charge of “terrorism” could just as easily be made against Western corporations,
speculators and policy-makers? When we talk about terrorism
it means what they do to us. Not what we do to them. And what they do to us
can be pretty ugly, although… it’s not even a fraction
of what we do to them. I mean, take, say, 9/11. That was a pretty serious
act of terrorism. Maybe the worst single act
of terrorism in history. But it could have been worse. Suppose for example that Al Qaeda
had bombed Washington, bombed the White House,
they killed the President, installed a harsh
military dictatorship, and brought in
a bunch of economists who drove the economy
into its worst disaster in history. That would have been
worse than 9/11. And I am not making it up,
it happened. It’s called the first 9/11
in South America, namely in Chile. On 11th September 1973 the democratically elected
Chilean President Salvador Allende was overthrown in a coup. A dictatorship under
Augusto Pinochet was established that ruled Chile until 1990. There was the systematic suppression
of all political dissidence. Thousands were imprisoned
and murdered. Who was involved
in that first 9/11? It’s not hard to find them. They were right in Washington
and London, and so on. But that’s off the agenda,
that doesn’t count. There is a principle of ideology that we must never
look at our own crimes. We should on the other hand
exalt in the crimes of others, and in our own nobility
in opposing them. The root causes
of so-called “terrorism” will not be solved by increasing
economic inequality. If governments really are serious
about combating terrorism then they must start with real
structural reform back home. As long as banking empires chase infrastructure and debt deals
in pursuit of profit, the West will continue to export
injustice through finance. Millions more will be displaced, terrorism will thrive, and neocolonialism will continue to end more
and more lives around the world. RESOURCES The things you own
end up owning you Tyler Durden What’s happened is
that we have moved from a relatively empty world
to a relatively full world – that is empty of us
and all of our stuff, to now full of us
and all of our stuff. In my lifetime
the world population has tripled. And the populations
of other things, of cars, houses, boats… all these other things that put
a load on the environment too, just like human bodies, those have
vastly more than tripled. So the world is very, very full
of what we might call man-made capital. And it’s becoming more and more
empty of what used to be there, what we might call
natural capital. We are the first generation; we in the rich developed world
are the first generation to have got to the end of the real benefits of
economic growth. For hundreds of years the best way of raising
the real quality of human life has been to raise
material living standards. And that’s what’s driven
the huge rises in life expectancy and increases in happiness and other measures of well being. But all those have now become
detached from economic growth. And although life expectancy
continues to rise in the rich world, it’s no longer related to the amount of economic growth
a country has at all. And the same is true
for measures of happiness and measures of well-being. The paradox is
the more we grow, the more poverty we create. Our self-interested
economic system seems to be continually
missing a trick. So as we keep plundering
the Earth’s natural capital is it time to rethink our
Western definition of progress? When I look at the world,
I look at it much the way Royal Dutch Shell
looks at it. They have one of the best strategic
entities in the world, private or public, and Royal Dutch Shell
has posited two scenarios. One is called Blueprint,
and is obviously a planned corporate structure
where world leaders get together and they think about things
like energy transformation, planetary warming, and dwindling
fossil fuels, and so forth. The other is called Scramble. And Scramble is pretty much
what it sounds like too… it’s a mess. Interestingly enough,
in 2075 – the ending year for
these scenarios, as I recall – we get to about the same place. It’s just that Blueprint leaves a lot
less blood on the floor. Scramble leaves a lot of blood
on the floor, as people fight for these resources
and so forth. The reason oil companies
are drilling miles under the sea is that the world’s
easily-accessible oil has already been found
and, largely, consumed. Not only are
oil supplies dwindling, major new metals discoveries are becoming increasingly rare. 40% of the world’s agricultural land
is seriously degraded and ever more volatile yields continue to be unevenly distributed. It may be that the looming
environmental threat is not global warming but the exhaustion
of the world’s resources. We’re going to have struggles for finding the lands sufficient
to grow the agricultural products for what the UN says is will be
a 9 billion Earth population. We’re going to struggle over non-renewable fossil fuels,
as they run out – I think Shell posits about
2075 they’ll be gone, and we are going to struggle
over things like water and other precious resources that are necessary to our life
and to our economy. And, this could be, as Shell says,
a Blueprint affair, with world leaders working together
to share and share alike or it could be a real mess, and Shell incidentally
bets on the mess. Just like the Baby-Boomers failure to look to the next generation our outdated competitive mentality for a world of depleted resources could have
devastating consequences. Our economic set-up
encourages one-upmanship, competition and comparison, whereas the progress
humans have made over millennia has been largely based
on cooperation. In any species,
in almost any animal, there is always the potential
for huge conflict, because within any species, all members of that species
have the same needs. So they might fight each other
for food, and shelter, and nest sites
and territory and sexual partners,
all that kind of thing. But human beings have always had
the other possibility. We have the possibility to be
the best source of support and love
and assistance and cooperation. Much more so
than any other animal. And so other people
can be the best or the worst. You can be my worst rival or my best source of support. In a progressive society
to meet our common economic, social
and cultural needs we must move from globalisation
to localisation. The benefits of a communal sense
of fellowship, responsibility and purpose in a life driven by production,
not consumption would lead to happiness
and satisfaction. Indeed we must ask: Have our modern consumerist
lifestyles made us happy? I think if one had been living
in the 19th century and somebody had told you
that 100 years later people were going to be living in this extraordinary
wealth and comfort, you know, with central heating,
and being able to throw away such a high proportion
of our food as we do, we’d imagine that
we’d be living in a state of extraordinary
social harmony, and… everything would be rosy. And it’s really quite remarkable
the contrast between, if you like, the material success
of our societies and the social failure. The growth economy demands that
we make consumption a way of life. He who ‘dies with the most toys’
became the ambition and retail replaced
spiritual satisfaction. Unsurprisingly,
sales of anti-depressants sky rocketed. The fact is that
the world economy over the last few years,
a good share of my lifetime has been built
either on the military, or on producing items
that most people don’t need. And really don’t even want
if you come right down to it, but we all got to have them. Consumerism is driven by
our extraordinarily social nature, that we want to have the stuff so we look good
in other people’s eyes. It’s because I experience myself
through other people’s eyes, their feelings of shame
and embarrassment or pride, and… maybe feeling envied,
all those things. So… the goods are just
a way of, if you like, mediating the relationship
between yourself and others in this extraordinarily
alienated hierarchy. What’s really suffered is
human relationships, family life, the things that
really matter to us. And in the end the only thing
that makes human beings happy, isn’t money, it’s very clear
that past a certain level you only get marginal gains
from wealth. What really makes us happy
is other people. It’s our relationship
with other people that’s really being damaged
by the last 30 years. We trust them less,
we have less interaction with them, we bond less than ever before,
we marry less, and marriage is under more
threat than ever before, and all the associations
that represent sort of permanent,
unconditional human affection are being eroded or damaged. And that is the real legacy
of the last 30 years. And in some sense we’ve got to
recover and re-humanise our lives. Otherwise, not only will they be
nasty, brutish and short, but they’ll be lonely. The West is coming
to the realisation that its human project
is failing. The West was so convinced that if you push people
to achieve as individuals, that accumulated achievement
of individuals would make for
a successful society. And what the West
is now beginning to realise is that the individual achievement, without incorporating
the vulnerable community is a myth. The idea was:
“Make your own life, be individually aspiring, and then you’ll be
individually achieving, and then you’ll be
individually prosperous, and then you’ll be
individually happy.” You end up doing that
in a glass jar and the glass jar
has a limited height, and it is encapsulating, and in the end you die
of lack of oxygen. Human beings are alive
because they seek attachment, and because they’re propelled by affection. So, the isolated
achieving individual in the end implodes. In order to find a purpose in life
it has to be outside yourself. It matters not how you
construct it outside yourself as long as it is a positive value
added to society pursued. But it has to be outside yourself,
it can’t be yourself. If you are pursuing yourself you are pursuing the abyss
as Nietzsche said, you are going to wind up
in the abyss. PROGRESS I have never let my schooling
interfere with my education. Mark Twain One of the most powerful
cultural frameworks that shapes the way we think
today in the West is the Hollywood
film construction. And it follows a particular
cultural pattern in that there is a beginning,
there is a middle, and an end. There is drama, tension,
there is resolution, there is usually a goodie
and a baddie and there is usually a story to hold
the medium of human beings. This Hollywoodisation
of the way that people communicate, and the way they tell stories
about themselves, and view their recent history, has very much impacted
how we look at the financial crisis in that people look at the beginning,
the middle and the end, they look at the drama
around Lehman Brothers, and they wanted, say,
a resolution. And they wanted baddies, they wanted
sacrificial victims as well. So people have focused
on a few individuals. And the idea that somehow it wasn’t just one or two individuals
who were at the root of the problem, it was a systemic problem, that actually almost everyone who
participated was in some way guilty, either of
outright negligence or simply failing to ask
the right questions, or simply failing to ask why money
was so cheap for so many years. The idea that it was
a systemic flaw is something which is
very hard for people to grasp, and even harder to depict
as a good story. Perhaps there is this feeling
of helplessness because we don’t understand
what the real problem actually is. Cleansing a few ‘bad apples’
will not rectify the flaws at the heart of
the Western economic system. A system that should be
protecting people is in fact the very thing that’s
enabling our Four Horsemen to ride with such vengeance. The modern day Four Horsemen – a rapacious financial system, escalating organised violence, abject poverty for billions and the exhaustion
of the Earth’s resources – are riding roughshod over those
who can least afford it. They gallop unchallenged
because the cognitive map that’s been put in place by our
schools, universities and our media does not encourage us
to question accepted norms. Instead there is apathy. In a sense I think we are
rather depressed societies. We’ve got used to the idea that
there’s nothing that can be done, there is no alternative,
that, you know, we are never going to deal with
these environmental problems and we live in a dog-eat-dog society,
and that’s it. I think what we have
to take away from this, is a recognition that… most of these problems
can be very substantially improved by making our societies
more equal, reducing the income differences. And that also helps us to solve
the environmental problems. We can reach a society that is
qualitatively better for all of us. Well the apathy
is sort of engineered because you don’t have any discussion
of this in the public media. Hardly by surprise,
the public media are owned by the real estate
and the financial interests, and they are not going
to explain to people the integration between the financial,
insurance and real estate sectors – the FIRE sector. There’s this disinformation
going on, passing the buck, denying
what the real driving factors are. All of these are common strategies. In fact even in education you can see that banks
have helped to set up universities they’ve funded them,
they fund think tanks, they have educational foundations,
they own newspapers. All of this stuff is going on
as a kind of propaganda exercise so that the people don’t actually
work out what the problem is. You should not assume
because, you know, you don’t have a background
in economics or in law, that these issues are somehow
too complex for you. They’re not complex at all,
it’s very simple. It’s about power,
and it’s about democracy. And you understand that
just as well as I do. One source of this disinformation is the neo-classical
school of economics. These economists and academics
have been successful in convincing the world
that their models were gospel. But just as Gutenberg’s printing press
was revolutionary in the 16th century today we are at the dawn
of internet enlightenment which will remove
the cloud of ignorance upheld by academic
and media gatekeepers. Education can be a form
of mass mind control and it’s astonishing that today
neo-classical economics continues to be taught
in all Ivy League universities. I do get letters from students in economics departments
at other universities. They’re in some graduate programme
or something, and they say: “I have just read
such and such that you wrote, and this is the kind of thing
that interests me. I’m stuck in this programme here in which I can’t even
talk about any of that. What’s your advice?
What should I do?”… What they’re teaching you is
what you’re going to have to oppose, a lot of it. I mean some of it’s useful,
go ahead and learn it, and the reason for learning
the rest of it is: know your enemy. An individual might not be able
to change the system, but they can change themselves. If we’re not offered
proper education, we must begin our own. And a good place to start is to become re-acquainted
with the classical economists. And with something
that so few question, but that affects us all: our system of money. If the monetary system
of the world is not reformed then we are headed towards
the end of industrial civilisation. I won’t say that we are going
to the end of humanity, but it’s just going to be absolute collapse of our world
as we have known it, because it can not
function on fiat money. And none of those
who are responsible for this want to admit it,
but that is the fact. The fiat system of money
is a man made law, and it’s been abused. Is there a form of money
whose law is not set by man? When you look
at natural law and gold… I sort of describe gold as
being a natural form of money. All of the gold that has been
mined throughout history still exists in it’s
above ground stock. It’s about the size of 2 ?
olympic swimming pools, if you put all that gold
together in one place. The key is that this
above ground stock of gold grows by about 1 ? % per annum, which is approximately equal
to new world population growth, and is approximately equal to
new wealth creation. So, the net result of this
is that… you have this
very good consistency in gold’s purchasing power
over long periods of time because the supply-demand equation
is very much in balance. To achieve human liberty you really need to have
sound money, and gold is the only way
to do that because only gold is outside
of the control of politicians. With modern man made
monetary processes, a chronic excess of debt has
built up at every level of society. Debt is now
regarded as normal. It isn’t. It’s a form of slavery. But how much
do we question our debt? And what should we
now do about it? The classic example,
most recently of a debt cancellation, was the German economic miracle
in 1947. The Allies cancelled all domestic and international
German debts except for the debts that employers
owed their employees for the previous few weeks, and except for
a basic working balance that everybody was able
to keep in the bank in order to buy food
for the next few weeks or so. Essentially you would follow
the five or six pages that the currency reform
of 1947 did in Germany. You would start
with a clean slate. That means that everybody
would own their property free and clear. And the problem here is
that you’d wipe off the savings that are the
counterparts to the debt. That actually would not be
such a bad thing if you look at the fact
that the… wealthiest 1%
of Americans have concentrated an enormous amount of wealth
in their own hands, more than at any earlier time
since statistics have been kept. Our system of taxation
also needs addressing. Currently we’re taxed
on what we produce. Perhaps it would be
more progressive to tax what we consume. How many American people realise
that the Founding Fathers never intended Americans
to be taxed on their labour? In other words, they weren’t meant
to pay income tax. The tax system
that was exported from Britain, a relic of colonialism,
has duped the world. The most important element
of a tax system is to do what everybody
expected to be done in the 19th century, and that is to base
the tax system on land taxation, on the free lunch of land value, and on what John Stuart Mill
called the ‘unearned increment’. The income that landlords made
in their sleep, as he put it. Who made oil in the ground,
coal or iron ore? These are things which are not
the product of human effort, of course extracting them is,
but their existence is not. And so the rents
from natural resources are a wonderful
source of taxation. Nobody made them, so… And when you do tax them, you cause all others
to use them more efficiently. So this seems like really
the excellent thing to tax, rather than labour and capital. If the governments use
this land site value that’s supplied by nature, not by human labour,
not by a personal enterprise, then the government
would not have to tax wages in the form of income tax, it wouldn’t have
to apply sales tax that adds to the price
of doing business, and it wouldn’t have to add
the proliferation of business taxes. This tax system – advocated by
all the classical economists – would begin to address
global poverty as it would allow citizens
in developing countries to keep their resource wealth. In developed countries it would begin to address
our housing and debt crisis and unleash
the kind of entrepreneurship needed to refloat
our economies. Perhaps we should
also resurrect another timeless principle
for workers that was promoted
during the Industrial Revolution. The idea that people who work
in a plant ought to own it, is just deeply built into
working class culture. So right around here at the early Industrial Revolution
in the late 19th century, working people simply
took for granted, that yes, of course, the workers should own
the mills in which they work. Anything else is an attack
on our fundamental rights as free citizens. They also took for granted
that wage labour is hardly different
from slavery. It’s different only because
it’s temporary, and then you can be free. One of the ways you can be free
is by owning your own plant. That was not an exotic view –
that was Abraham Lincoln’s view. In fact it was a principle
of the Republican Party in the late 19th century. It’s taken a lot of effort to drive
those ideas out of people’s heads, but they’re still there
and they are very relevant. It was the Greek philosopher Plato
who said the ratio of earnings between highest and lowest paid
employee in any organisation should be
no more than 6:1. In 1923 banker J.P. Morgan declared
no more that 20:1 was optimum. Yet today’s salary difference between top and bottom earners
in global corporations can be higher than
500 or a 1,000:1. When you are up
in the range of 500:1 inequality the rich and the poor
become almost different species – no longer members
of the same community. Commonality of interest
is lost, and so it’s difficult
to form community and to have good
friendly relationships across class differences
that are that large. When the public
do vent their outrage at inappropriate earnings,
the common defense is to move the debate
to the psychological realm and quote mercurial British
economist Herbert Spencer. He coined the phrase
‘survival of the fittest’ and his words are now used
to justify excess. Competition in business
is a good thing, but the playing field
must be level. Monopolists have too much because the system
they game is rigged. Under the current
economic set-up the fitness of the vast majority
of the world’s population is irrelevant. Those that are made to pay
for this crisis are not those that caused it. But those who caused it
– for survival – will no doubt try to marginalise
this film as socialist or even Marxist. I’m a capitalist.
I’m a business person. I believe in the basic principles. That’s why
I’m completely appalled by seeing these
principles destroyed by monarchs, monopolists, who have totally destroyed
the system from within, on Wall Street, and this is completely
unacceptable. I’m a capitalist.
I think capitalism can do it. It’s not a question
of getting rid of capitalism. It’s a question of getting rid
of this terrible form of capitalism. Capitalism, more broadly understood
as market economy, not only has a future, I can’t see
the future of the world without it. But the question is:
What kind of capitalism? What kind of market economy? A system of reformed capitalism
built on independent money, a tax system based
on consumption, not income, and employee-owned businesses would begin to build an economy that’s not dependent on constant
growth to service its debt. We’ve endured the so-called
‘free market’ for centuries. But far from being free it’s led us to destroy nature
and each other in a vain attempt to progress. It’s absolutely ludicrous
to suggest that somehow there’s a scientifically
defined boundary of the market that we should never change. And of course that is what
the free market economists want you to believe. Because once they convince
you of that, and claim that – on top of that they claim
that they have the truth, because they
are PhD’s in economics – then they can tell you
whatever they want and then you’ll have
to accept it. But that’s where
we have to take these guys on. Politics is about drawing
the boundary of the market. I mean,
when you think about it, a lot of things have been
taken out of the market over the last
two, three centuries. Two, three centuries ago
you could… buy and sell
human beings, child labour, a lot of things that you didn’t
imagine you could buy and sell today. So, I mean, over time we have
re-drawn this boundary and there is nothing wrong with
re-drawing the boundary again. Things that were considered
absolutely reasonable in the 1850’s like selling any chemical
on the street corner and telling you that it’s
a pharmaceutical drug that maybe good for you, things like that, that were
absolutely commonplace then are now serious
criminal offences. The same thing will be true of
active money management in a 100 years. The breakdown we saw
in the Great Depression and witnessed again
at the beginning of the 21st century occurred because
– in the name of growth – much was taken out of the system
by those who contribute very little. Multinational corporates
and banks will always want to grow
without having to compensate those people who actually
do the work to produce the surplus. In the past every time too much was taken
by those who contributed little people rose up to halt
the violent practices enacted by a tangible enemy. Today the question is:
With such a formless enemy pervading every element of our
economic and democratic process, can it be done again? Of course it can be done again.
Look it’s a cycle, I mean… we’re not debt peons,
we may be rats running around a little wheel
in somebody’s big cage somewhere. The finance rises,
finance rises, finance becomes organised, you make a lot of money
in banking, it’s easy to go out
and buy politicians, but the essence of democracy,
the essence of American democracy is this repeated confrontation,
a repeated showdown, and in the 1830’s Andrew Jackson beat
the second bank in the U.S., in the early 1900’s Teddy Roosevelt beat J.P. Morgan
and Johnny Rockefeller, in the 1930’s
Franklin Delano Roosevelt, FDR, beat everyone from Wall Street. And now we have to do it again. The one single thing
that makes me optimistic, rather than cynical, pessimistic, is my students. First, I do not see the desire to go
to Wall Street amongst them, I see the opposite. Second, I see a disdain amongst them
for people who are motivated… not just they don’t want money, I see a disdain amongst them for people who
do just want money. The crisis we face today
are created by humans and what is created by humans
can be changed by humans. So we are all capable
of transforming our world. Revolutions are philosophical. Getting organised and preventing the
culprits camouflaging the real problem means it’s possible to embark
on a bloodless revolution against the violent organisations
and barbaric leaders who’ve trashed the economy. Central banking,
rigged capitalism, land speculation,
income tax and neo-classical economics
have corporatised democracy, stunted progress, perverted
the course of human destiny and compromised
the future of this planet. If these issues aren’t addressed then the next implosion
will be on a scale unimagined. Whatever the propaganda: At the beginning
of the 21st century, central banks’
unregulated cheap money pumped up land values which created an
unsustainable asset bubble in a world that once again
operates a rigged tax system that enriches
entrenched privilege. Neo-classical economics have
ruined life for the bottom billions, tempted everyone into
intergenerational conflict and created massive suffering
that has no limits. Human beings
go mad in crowds, and come to their senses
slowly and individually. History is littered
with examples of people who threw themselves
off the yoke of oppression to adopt radical change, only to end up
with popular new rulers that maintained the status quo. To really understand something is to be liberated from it. Dedicating oneself
to a great cause, taking responsibility
and gaining self-knowledge is the essence
of being human. A predatory capitalist’s
truest enemy and humanity’s greatest ally is the self-educated individual,
who has read, understood, delays their gratification and walks around
with their eyes wide open. An invasion of armies
can be resisted, but not an idea whose time has come. Victor Hugo


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