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-I believe that open markets and free enterprise are the best
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imaginable force for improving human wealth and happiness.
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-(Protesters): Who protects the bankers?
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Police protect the bankers!
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-Did you ever have a moment of doubt about capitalism?
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-Is there some society you know that doesn't run on greed?
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-How would Smith see the economic world around us?
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-I think Keynes would have said the problem is the hole
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in the economy.
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-Hayek really wrote "The Road to Serfdom"
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as a warning. -You always have to be careful
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with Marx about the one-liners.
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-Polanyi, for me, was an intellectual earthquake.
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-I mean, if I had to stereotype Ricardo, I would say he would
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look like George Soros.
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-(Narrator): We were told that capitalism is the product
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of big thinkers and big ideas, but is it true? How did ideas
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shape our lives? What is their relation to reality?
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Can they help us understand today's economic crisis,
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let alone the future of capitalism?
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-Dawn in Nanjing, China's last surviving communist commune.
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On the surface, a time warp complete with revolutionary
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posters and radio-news piped into the main square.
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But the community claims it rediscovered Marx's values
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as a defence against China's roaring capitalism.
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London's financial center; Marx is unexpectedly being
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rediscovered here as well.
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-And all Marx and Engels' warning of the dangers
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of monopoly capitalism and concentrated finance have
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come to pass.
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-And we thought he was gone forever.
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-With the collapse of the Soviet Union and the fall of communism,
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that system of government was consigned to the dustbin
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of history and Marx was thrown out along with it.
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-So it is possible that we misread Marx?
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Is it possible that his insight into 19th century capitalism
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has more relevance now than in past decades.
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-Carl Marx's house in Trier, Germany, besieged by Chinese
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tourists.
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-Karl Marx was born in 1818 in the Rhineland, which is
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the westernmost province of Prussia.
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It was an interesting part of the Greater Germany because
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it had been occupied by Napoleon. And so, it'd been
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initiated in the ideas of the French Enlightenment.
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And that was a milieu in which he was raised.
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-"I can feel no regret", wrote a young woman to her loved one.
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"I shut my eyes very tightly. Once again, I lay close
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to your heart, drunk with love and joy."
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A romantic love letter like so many others. The innocence
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of the early 19th century in a provincial German town.
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The only difference is that the man the letter was addressed
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to was Karl Marx.
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-In Trier, he met Jenny von Westphalen.
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She was quite a catch for Marx because he was the son
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of a Jewish lawyer and was, by such, a social outcast.
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She was the daughter of a Prussian baron.
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-So he got educated in Trier and then he went to Berlin.
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I guess the expectation was that he'd go to college and be
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a good boy and learn law or something like that.
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He was politically very much engaged because there were
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all these kind of questions of after the French Revolution,
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would there be a sort of liberal democracy? What was going
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to happen to the autocratic regimes in Germany and so on?
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He was kind of mixed up in all of that.
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-More than a century later, the romantic student from Trier
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had been transformed into the menace of western governments
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and capitalist countries.
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-Captain Capitalism! -Ah, making out the old
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Christmas list, I see. Let's see here: world peace, an end
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to world hunger, free healthcare. This isn't
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a Christmas list, son. Who the hell taught you this, child?
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-Santa did.
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-Marx had become a bogeyman, the conspirator behind
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every social demand.
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-That red suit gives you away, Karl!
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-Captain Capitalism! So, you discovered my plan.
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Santa Claus is truly I, Karl Marx, the undead
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founder of communism.
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-The reason for this radical transformation from a promising
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young student into a dangerous revolutionary, can be found
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in the basement of the Trier Museum, kept in a safe.
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-In that year, Europe erupted in popular revolts. It was
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the moment Marx had been waiting for after years of agitating
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for radical, political reforms.
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-"A spectre is haunting Europe", opens The Communist Manifesto."
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The spectre of communism, all the powers of Europe have
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entered into holy alliance to exorcise this spectre."
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-Unfortunately for Marx, he was always late in all
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of his writing and he didn't publish "The Communist
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Manifesto" until after the 1848 revolts had begun.
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So he couldn't take credit for those, but and in fact,
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'The Communist Manifesto" was sort of lost in the revolution,
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it was only rediscovered later.
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-The story behind "The Communist Manifesto" did not begin
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in the 1848 revolution, but in Paris, 5 years earlier
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when Marx met Friedrich Engels, the revolutionary son
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of a wealthy industrialist.
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-They met in a Paris café that was known worldwide as being
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a place where chest masters matched wits. Marx and Engels
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spent 10 days and 10 nights talking and at the end
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of that time, they came out feeling that they were
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completely in agreement in all things. And a beautiful
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relationship was born.
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-Marx meeting Engels was, I think, a crucial moment
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He meant somebody who was actually engaged in working
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in the factories of Manchester and therefore could talk
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to Marx about the labour process.
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-"They are worse slaves than the Negros in America".
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wrote Engels. "For they are more sharply watched and yet it is
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demanded of them that they shall live like human beings,
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shall think and feel like men. This they can do only under
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glowing hatred towards their oppressors, which degrades
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them as machines."
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-Marx went to Manchester with Engels for a little trip
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in 1845. He saw the people who were living in the most
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degrading conditions, who were building this industrial future
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by working in the factories.
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He saw the families that had been torn apart by the factory
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work. The mothers who had to give their infants opium
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in the morning so that they could go off to work
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and assumed that the children are going to be drugged
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all day and they wouldn't have to be cared for.
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For a man like Marx, a social, political theorist and economic
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theorist, to go there would be to walk right in the laboratory
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of humanity, of industrial humanity.
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-While in 1848, "The Communist Manifesto" was ignored, in 1917,
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it was the blueprint for the Bolshevik Revolution
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and its global ambition.
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-Ever heard of Karl Marx? In his mind, communism was born
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more than a hundred years ago.
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-Marx has now been transformed into a global threat.
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-This is the Kremlin, citadel of Russian communism.
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Looking closer, we see a public display of giant portraits
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of communist leaders.
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Here was a new face, but in the background was an old one,
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Karl Marx's.
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-The Marx that people in the 20th century and
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in the 21st century ran away from was the Marx of
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"The Communist Manifesto".
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That's the person that, I think, capitalist governments
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and democracies and Western governments held up as
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the person who was responsible for communism and its atrocities
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in the 20th century.
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-So maybe we got it all wrong. We focused so much on
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the revolutionary message of "The Communist Manifesto"
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and ignored the bulk of the document, which analyzed
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the real revolution that Marx wrote about: capitalism.
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-Ladies and gentlemen, Karl Marx and Friedrich Engels
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were the first to chart the uncompromising,
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unrelenting, compulsively iconoclastic nature
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of capitalism. It has pitilessly torn asunder the motley
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feudal ties that bound man to his natural superiors,
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and has left remaining no other nexus between man and man
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than naked self-interests, than callous cash payments.
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And it was Marx who revealed how capitalism would crush
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languages, cultures, traditions even nations in its wake.
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In one word, it creates a world after its own image, he wrote.
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I would like to suggest to you that Marx has rarely seemed more
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relevant. Marx's stock resurgence on a 150 year tip
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was how the New York Times, the New York Times! Marked
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the 150th anniversary of the publication
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of "The Communist Manifesto".
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A text which more than any other, as they put it,
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recognized the unstoppable wealth-creating power
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of capitalism, predicted it would conquer the world
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and warned that this inevitable globalization of national
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economies and cultures would have divisive and painful
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consequences.
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-After the publication of "The Communist Manifesto",
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Marx was expelled from Continental Europe. He was
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once again a refugee, this time arriving in London in 1849.
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-Imagine Dean Street in 1850, the year Karl Marx and
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his family moved into this Soho neighbourhood.
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The streets were teeming with refugees, people who had fled
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failed revolts on the continent. They arrived in this country,
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some with only their clothes on their backs, many not even
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speaking the language.
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Marx and his family were among the lucky, but all they had,
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three adults and three children, were two rooms in an attic.
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And in those cramped quarters, Marx tried to make sense
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of what he had just experienced and what he saw on the streets
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around him.
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-And next door, a brand new exhibition opened,
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right at the time Marx began writing "Das Kapital".
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An exhibition celebrating the achievements
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of the Industrial Revolution.
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-It was a triumph of industry. Man's greatest achievements
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were on display and so this was the dawn of a new era.
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King Capitalism was on the throne, and yet Marx
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up in his garret was busily scribbling why the system would
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never work. Yes, it produced wonders, but it would also
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produce great destruction.
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-I teach Marx and the question I always ask is: what can
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we learn from Marx and what do we have to do for ourselves?
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And I think that's a very important question to ask
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because very frequently in the past, people have read
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their Marx and then sort of plugged reality into it
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and then said: Ah here's the answer. I don't think
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you can do that. I think there's only a limited set of things
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we can learn from Marx. Paradoxically, we can't really
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learn that much about socialism or communism or the future
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from Marx. We can learn a great deal about how capital works.
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-(Quote): The wealth of societies in which capital
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modes of production prevail, presents itself as an immense
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accumulation of commodities. Our investigation must therefore
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begin with the analysis of a commodity.
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Karl Marx, "Das Kapital", Volume 1.
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-Tom? Tom, what do you want for breakfast?
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-What did you say? -What do you want for breakfast?
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-I don't care.
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-(Quote): A commodity is in the first place, an object
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outside of us. A thing that by its properties satisfies
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human wants.
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"Das Kapital"
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-While she gets Tom's breakfast, let's take a closer look
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at that pan. The iron ore for that pan came from the Mesabi
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Range. So let's start there and see what happens.
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Maybe it'll give us an idea of just what it is we have.
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-Now what Marx does in Volume 1 of Kapital is have a little
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section called the "Fetishism of Commodities" and what it
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basically means is that our daily experience doesn't
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actually tell us or give us all the information we need
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to understand how a system is working.
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Our daily experience is we take some money and we buy
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a commodity and we take it home, that's our daily experience.
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But that doesn't tell you anything about the labour
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that went into the commodity. It doesn't tell you anything about
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why it is that this commodity costs twice as much as that
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commodity.
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And Marx is kind of saying that the market system
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disguises all of those social relations.
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-(Quote):There are many different commodities
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with different use values but they have only one common
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property left, that of labour itself.
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"Das Kapital"
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-The Industrial Revolution, which we conventionally date
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from around 1780 was founded upon the creation of the factory
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system with large-scale machinery and of course,
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a labour process that was very different from that which
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artisans making their cabinets and so on engaged in.
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This conversion and its rise of industrial capitalism from 1780
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onwards was, in Marx's view, a crucial transformation.
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-(Quote): The worker is related to the product of labour
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as to an alien objet. The more the worker spends himself,
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the more powerful becomes the alien world of objects
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which he creates, the poorer he himself, his inner world,
249
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becomes. Karl Marx
250
00:19:22,541 --> 00:19:24,558
-This iPad worker, who asked for his identity to be hidden,
251
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has been given a camera to film his life outside the factory.
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Once these workers were peasants with a connection to the land
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and its products. Now, they're part of an assembly line.
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Alienation, argued Marx, is built into the manufacturing
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process of commodities.
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-To Mark, it's the idea of living labour, which is so
257
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crucial, which distinguishes him very much from the classical
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political economists who saw labour as a fact of production.
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They call it a factor of production. It's a thing,
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which gets put into production and produces something.
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To Marx it's not, it's a process.
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I used to teach an introductory geography class and the first
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lesson, I would say: Can you tell me where your breakfast
264
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came from today?
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-Come on, Bernie, time for breakfast!
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-They would say, well, I went to the cafeteria.
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I'd say okay, but where did it come from? Well, I went to
268
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the supermarket. Where did it come from? Where did it come
269
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from? Where did it come from?
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After a little while, I'd get them to go back and start
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to think about the person cutting sugarcane
272
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in the Dominican Republic and that sugar gets on your
273
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breakfast table and you have a relationship with that person
274
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who's cutting the sugarcane. But the market doesn't tell you
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anything about that, it disguises all of that.
276
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-A lush countryside in India hides what Marx saw as another
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characteristic of market expansion: the transformation
278
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more and more of life into commodities.
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This group of cotton growers banded together to fight
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the invasion of their fields by genetically modified seeds.
281
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-Seed in India has been recognized as the source
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of life and the very word "Bija", "Ja" is life.
283
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Every ritual is about keeping seed forever.
284
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-Those seeds have now been genetically engineered and made
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into a commodity which farmers are encouraged to buy annually
286
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with the promise of higher yield.
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-Biotechnology answering the world's call for a better
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future today.
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-For some of these women, the new promise of the commodity
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of seeds turned into a nightmare. Genetically
291
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engineered seeds, which needed to be purchased every year,
292
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pushed their husbands into debt.
293
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-So they always borrow to get the seed on credit.
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Now the creditors take collateral in terms of the land
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mortgage. So two years later, when the farmer cannot pay
296
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back, the new moneylender, who is the agent of the seed
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00:23:54,333 --> 00:23:58,142
and chemical companies, comes and says: your land is today
298
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mine.
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They don't tell their wives the seed has got us into debt.
300
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When they get into debt, they are ashamed. When they know
301
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they're losing the land, they're shocked because the bond
302
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with the land is still vital for the peasant culture.
303
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That's the day the farmers will drink pesticide to end
304
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their lives and the figure has now hit 260 000 suicides.
305
00:24:57,791 --> 00:25:01,142
It is the greed of capital accumulation that has turned
306
00:25:01,166 --> 00:25:04,393
seed into something that has to be bought every year.
307
00:25:04,417 --> 00:25:07,809
That has been turned into a commodity, a consumer
308
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product and the combination of new sources of profit
309
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for corporations.
310
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-I think that the idea of life as a commodity really, it's
311
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interesting because is a cow a commodity? Or pig?
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00:25:34,208 --> 00:25:36,351
I would say they've been commodities for a very long
313
00:25:36,375 --> 00:25:41,767
time and we don't really care about that. So, where do we draw
314
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the line? And the line may be in human beings. I think
315
00:25:45,208 --> 00:25:49,142
what we really worry about are human beings.
316
00:25:49,166 --> 00:25:53,393
-And we as a society might have already crossed this line.
317
00:25:53,417 --> 00:25:56,976
-Her announcement made headlines around the world.
318
00:25:57,000 --> 00:26:01,725
Angelina Jolie underwent a double mastectomy after
319
00:26:01,749 --> 00:26:05,393
a genetic test showed she had a mutated BRCA1 gene, giving her
320
00:26:05,417 --> 00:26:10,725
an 87% chance of getting breast cancer. Her news put
321
00:26:10,749 --> 00:26:15,059
this company Myriad Genetics, front and center. It has patents
322
00:26:15,083 --> 00:26:19,832
on the BRCA1 and 2 genes.
323
00:26:20,541 --> 00:26:23,517
-Once life is transformed into a commodity, it is subject
324
00:26:23,541 --> 00:26:26,558
to market laws. Investments in genes like those in seeds,
325
00:26:26,582 --> 00:26:31,558
need to be protected by patent keeping competition away.
326
00:26:31,582 --> 00:26:35,184
-It's the system we have in this country, the investment system
327
00:26:35,208 --> 00:26:36,393
we have, which many people do think are the reason why
328
00:26:36,417 --> 00:26:41,267
we have been the leader for so long in so many areas,
329
00:26:41,291 --> 00:26:44,623
that's just the way it works.
330
00:26:45,791 --> 00:26:47,976
-So the production of commodities according to Marx,
331
00:26:48,000 --> 00:26:52,059
not only transforms life, it changes our perceptions
332
00:26:52,083 --> 00:26:54,832
of nature and of ourselves.
333
00:26:55,999 --> 00:26:59,142
-Marx's theory of social change again is a process, a process
334
00:26:59,166 --> 00:27:03,975
that says ideas have to change, but if the production process
335
00:27:03,999 --> 00:27:06,976
doesn't change, then the ideas don't mean anything.
336
00:27:07,000 --> 00:27:08,226
The production process can change but if the ideas don't
337
00:27:08,250 --> 00:27:12,393
change, it doesn't mean anything. So, it's
338
00:27:12,417 --> 00:27:14,309
the relationship between the production process
339
00:27:14,333 --> 00:27:16,809
and the ideas and the social relations and the institution
340
00:27:16,833 --> 00:27:20,623
arrangements and daily life has to change.
341
00:27:22,083 --> 00:27:26,184
-The world congress on industrial biotechnology and
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00:27:26,208 --> 00:27:28,725
bioprocessing the world's largest industrial biotechnology
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event.
344
00:27:30,375 --> 00:27:33,142
-The fetish of commodities according to Marx masks
345
00:27:33,166 --> 00:27:36,767
their role in impacting social change. Barely 60 years ago,
346
00:27:36,791 --> 00:27:38,850
scientific innovations were rarely patented and never
347
00:27:38,874 --> 00:27:42,249
industrialized in such a way.
348
00:27:44,624 --> 00:27:48,393
-1955, a year of anxiety and triumphs. A major medical
349
00:27:48,417 --> 00:27:52,476
hurdle was crossed with the discovery by Dr. Jonas Salk
350
00:27:52,500 --> 00:27:55,309
of the anti-polio vaccine.
351
00:27:55,333 --> 00:27:58,226
-60 years ago, no one talked about patenting the polio
352
00:27:58,250 --> 00:28:01,017
vaccine or selling it for a fee.
353
00:28:01,041 --> 00:28:03,642
-Who owns the patent on this vaccine?
354
00:28:03,666 --> 00:28:07,850
-Well the people I would say. There is no patent. This is...
355
00:28:07,874 --> 00:28:11,351
could you patent the sun?
356
00:28:11,375 --> 00:28:13,975
-I mean, I can think back to a time when we had ideas,
357
00:28:13,999 --> 00:28:19,975
crazy ideas now, about social solidarities. We're all
358
00:28:19,999 --> 00:28:23,832
individuals now. That's what neoliberalism changed.
359
00:28:26,417 --> 00:28:30,809
-The 60's caught capitalism completely off-guard. How a
360
00:28:30,833 --> 00:28:33,101
company is to sell products to a generation that has
361
00:28:33,125 --> 00:28:35,558
rejected consumerism?
362
00:28:35,582 --> 00:28:37,809
The answer was to tune into the movement and to sell
363
00:28:37,833 --> 00:28:40,184
to the individual in everyone.
364
00:28:40,208 --> 00:28:44,017
The strategy worked, the marketing machine captured
365
00:28:44,041 --> 00:28:46,934
the spirit of the 60's individualism and made
366
00:28:46,958 --> 00:28:48,600
it its own.
367
00:28:48,624 --> 00:28:50,809
-So Marx has what I call a co-evolutionary theory
368
00:28:50,833 --> 00:28:53,975
of social change and to the degree that capital is
369
00:28:53,999 --> 00:28:56,809
a permanently revolutionary configuration, so we would see
370
00:28:56,833 --> 00:29:01,040
movements in ideas, movements in social relations.
371
00:29:01,833 --> 00:29:04,142
-Leaving ideology behind, we now derive a sense
372
00:29:04,166 --> 00:29:06,558
of personal identity and empowerment from the goods
373
00:29:06,582 --> 00:29:10,309
we purchase and consume. -Go on, break the rules, define
374
00:29:10,333 --> 00:29:14,642
who you are...
375
00:29:14,666 --> 00:29:17,142
with our sneakers.
376
00:29:17,166 --> 00:29:18,558
-By the time he gets towards the end of Kapital, Marx does
377
00:29:18,582 --> 00:29:22,809
something interesting. He comes back to the idea of fetishism.
378
00:29:22,833 --> 00:29:25,101
And the big fetish is of course the money form
379
00:29:25,125 --> 00:29:27,249
and the credit system.
380
00:29:29,166 --> 00:29:33,309
-You have money jitters? Ask the obliging Bank of America
381
00:29:33,333 --> 00:29:38,809
for a jar of soothing instant money. M-o-n-e-y in the form
382
00:29:38,833 --> 00:29:44,476
of a convenient personal loan. Available now
383
00:29:44,500 --> 00:29:47,207
at Bank of America.
384
00:29:52,375 --> 00:29:55,184
-In order to expand tomorrow's demand and increase profits,
385
00:29:55,208 --> 00:29:58,975
today's production needs to be financed.
386
00:29:58,999 --> 00:30:01,142
-That means the credit system has to come in here, and what we
387
00:30:01,166 --> 00:30:04,558
can derive from this immediately is that the accumulation of
388
00:30:04,582 --> 00:30:07,725
capital in history has always been paralleled by an
389
00:30:07,749 --> 00:30:13,040
accumulation of debt. You can't have one without the other.
390
00:30:13,999 --> 00:30:16,975
-(Quote): A large portion of this money, capital, is always
391
00:30:16,999 --> 00:30:20,517
necessarily purely fictitious, that is title value,
392
00:30:20,541 --> 00:30:24,850
just as paper.
393
00:30:24,874 --> 00:30:27,249
Karl Marx, "Das Kapital"
394
00:30:29,375 --> 00:30:32,309
-One of the things that Marx did, I think, very neatly,
395
00:30:32,333 --> 00:30:39,725
was to demonstrate fundamental and foundational underlying
396
00:30:39,749 --> 00:30:44,142
relations and that underlying relation between accumulation
397
00:30:44,166 --> 00:30:47,351
of debt and the accumulation of capital can be looked at
398
00:30:47,375 --> 00:30:52,207
in a number of very specific ways. I'll give you one example.
399
00:30:55,582 --> 00:30:58,517
Tract housing is being built. Where did the builders get
400
00:30:58,541 --> 00:31:02,558
the money to do it? They borrow the money from a financial
401
00:31:02,582 --> 00:31:05,975
institution and say: give me the money and I will buy
402
00:31:05,999 --> 00:31:09,351
the land and I'll build the housing. Okay and then,
403
00:31:09,375 --> 00:31:14,040
they'll be a rate of return on that and I'll pay you back.
404
00:31:15,791 --> 00:31:17,975
Now, in order for that to happen, they have to be able
405
00:31:17,999 --> 00:31:21,184
to sell the housing to somebody. Buyers out there, they go
406
00:31:21,208 --> 00:31:23,184
to the same financial institution and say: lend me
407
00:31:23,208 --> 00:31:26,600
some money to buy the house that you have financed
408
00:31:26,624 --> 00:31:29,309
the production of. This is fictitious capital
409
00:31:29,333 --> 00:31:32,226
at work, because the financial institution that has surplus
410
00:31:32,250 --> 00:31:35,976
money is actually funding both the production
411
00:31:36,000 --> 00:31:39,416
and the consumption of the housing.
412
00:31:42,333 --> 00:31:45,558
Right now, we are in a crisis where fictitious capital is
413
00:31:45,582 --> 00:31:49,142
all over the place. But what Marx does is this brilliant
414
00:31:49,166 --> 00:31:52,351
of saying: there's a surface appearance, which is the fetish,
415
00:31:52,375 --> 00:31:55,351
I'm going to go behind it and actually be able to describe
416
00:31:55,375 --> 00:31:59,809
to you the nature of this fetish which creates this thing called
417
00:31:59,833 --> 00:32:03,416
fictitious capital.
418
00:32:11,624 --> 00:32:13,558
-Adrian Subaru could be described as a victim
419
00:32:13,582 --> 00:32:18,351
of fictitious capital. A victim of debt which was never his.
420
00:32:18,375 --> 00:32:19,684
His story begins here in the Romanian Parliament
421
00:32:19,708 --> 00:32:23,249
on December 23rd, 2011.
422
00:32:25,041 --> 00:32:27,393
-Romania's Parliament cancelled the no confidence vote
423
00:32:27,417 --> 00:32:29,517
on Thursday after a Romanian electrician staged
424
00:32:29,541 --> 00:32:31,249
a one-man protest.
425
00:33:26,582 --> 00:33:29,142
-On his t-shirt he wrote: you have gunned us down,
426
00:33:29,166 --> 00:33:33,142
you have killed our children's future. You can take away
427
00:33:33,166 --> 00:33:37,249
our money and our lives, but not our freedom.
428
00:34:18,791 --> 00:34:21,516
-From this tiny apartment in Bucharest, Adrian Subaru
429
00:34:21,541 --> 00:34:24,684
and his wife raised two kids on his small salary of a public
430
00:34:24,708 --> 00:34:28,040
TV technician.
431
00:34:33,958 --> 00:34:38,141
After 2011, his salary was cut by 25% and so was the financial
432
00:34:38,166 --> 00:34:42,248
help for a special education for Calin, their autistic son.
433
00:35:20,125 --> 00:35:23,892
-How and why did the debt of his country lead to Adrian Subaru's
434
00:35:23,916 --> 00:35:26,249
desperate act?
435
00:35:31,250 --> 00:35:34,226
-That was shocking to all Romanians, I presume,
436
00:35:34,250 --> 00:35:38,184
but because this is my way of thinking, I frame
437
00:35:38,208 --> 00:35:43,249
that episode, that tragic episode into a much wider frame.
438
00:35:46,458 --> 00:35:49,975
For many years, I thought about the way the financial industry
439
00:35:49,999 --> 00:35:56,725
has gone awry, the derailed high finance and what was not going
440
00:35:56,749 --> 00:36:00,142
well.
441
00:36:00,166 --> 00:36:04,059
We realized that a growth model based on free movement
442
00:36:04,083 --> 00:36:08,351
of capital, total financial liberalization
443
00:36:08,375 --> 00:36:12,184
and over-borrowing by the private sector creates
444
00:36:12,208 --> 00:36:16,393
fragility and creates vulnerability for the economy
445
00:36:16,417 --> 00:36:21,642
as a whole and may be very, very painful when something,
446
00:36:21,666 --> 00:36:25,832
when a crisis occurs.
447
00:36:28,791 --> 00:36:31,767
-In Romania, foreign capital in search of return flooded
448
00:36:31,791 --> 00:36:36,832
Romanian banks which fuelled growth based on debt.
449
00:36:38,833 --> 00:36:43,393
-The bankers stepped in and they helped the consumer
450
00:36:43,417 --> 00:36:48,623
growth and money was flooding into the country.
451
00:36:53,375 --> 00:36:58,975
Lots of foreign savings flooded to Romania via banking channels
452
00:36:58,999 --> 00:37:03,017
and they reached the Romanian consumers and everybody could
453
00:37:03,041 --> 00:37:09,351
afford buying new things like cars and houses.
454
00:37:09,375 --> 00:37:15,767
And then the people thought: we have reached the market
455
00:37:15,791 --> 00:37:20,184
economy and we can afford more. But actually, there were
456
00:37:20,208 --> 00:37:24,207
too much expectations and maybe some false expectations.
457
00:37:26,166 --> 00:37:29,184
-Romania is now the latest European country wrestling with
458
00:37:29,208 --> 00:37:32,832
violent protests over budget cuts and financial issues.
459
00:37:34,166 --> 00:37:38,142
-The bubble finally burst here as everywhere. Debt as
460
00:37:38,166 --> 00:37:42,416
Marx foresaw, is a form of fictitious capital.
461
00:37:44,166 --> 00:37:47,975
As a public employee, Adrian was never part of the boom.
462
00:37:47,999 --> 00:37:50,850
But when the bubble burst, the State turned against
463
00:37:50,874 --> 00:37:54,040
its weakest citizens.
464
00:37:58,999 --> 00:38:01,393
-Capital is perpetually moving its crisis tendencies around.
465
00:38:01,417 --> 00:38:05,309
If you look at the most recent crisis, it started
466
00:38:05,333 --> 00:38:07,226
in the housing market.
467
00:38:07,250 --> 00:38:10,809
-If deputies Allen Mathias and Derek Stevenson come
468
00:38:10,833 --> 00:38:14,101
to your door, your house no longer belongs to you.
469
00:38:14,125 --> 00:38:15,809
It belongs to the bank.
470
00:38:15,833 --> 00:38:18,017
-It then went to financial institutions.
471
00:38:18,041 --> 00:38:19,892
-There's blood in the streets and no one knows when
472
00:38:19,916 --> 00:38:22,351
the bleeding will stop.
473
00:38:22,375 --> 00:38:24,725
-It then became State debt. It's now being pushed onto
474
00:38:24,749 --> 00:38:28,725
the people, but people are not in a position, very frequently,
475
00:38:28,749 --> 00:38:33,101
to bear that. So it's now moving back to financial institutions
476
00:38:33,125 --> 00:38:36,207
in some instances.
477
00:38:36,999 --> 00:38:40,184
Marx is, I think, very good at giving us a sense of how
478
00:38:40,208 --> 00:38:43,642
this moves around. And as it moves around, of course,
479
00:38:43,666 --> 00:38:48,832
it engages in a process of destruction.
480
00:38:56,417 --> 00:38:59,767
-On the far end of the global trail of the tsunami
481
00:38:59,791 --> 00:39:03,351
of fictitious capital in search of return, is India,
482
00:39:03,375 --> 00:39:06,249
one of the world's largest emerging markets.
483
00:39:08,791 --> 00:39:12,184
-The term emerging markets emerges in the late 1980's,
484
00:39:12,208 --> 00:39:16,975
early 1990's as well. And it's actually coined by people
485
00:39:16,999 --> 00:39:21,184
at the World Bank and the IMF in order to describe those
486
00:39:21,208 --> 00:39:25,416
economies which are going to be growing very rapidly.
487
00:39:27,749 --> 00:39:31,517
Now, why are they so concerned about growth? Not just because
488
00:39:31,541 --> 00:39:35,558
they believe that growth will address poverty. But they are
489
00:39:35,582 --> 00:39:40,309
interested above all in the quantitative measure of growth.
490
00:39:40,333 --> 00:39:43,767
What's the reason for that? If you examine deep enough,
491
00:39:43,791 --> 00:39:47,351
you'll find that if the real economy, instead of 5% per
492
00:39:47,375 --> 00:39:50,393
annum, let's say GDP in these areas is growing at 8% or 9%,
493
00:39:50,417 --> 00:39:56,226
the returns to financial investors in financial markets
494
00:39:56,250 --> 00:40:00,416
actually grow by orders of magnitude, greater.
495
00:40:05,333 --> 00:40:10,351
So India in 2009 was the third most lucrative stock market.
496
00:40:10,375 --> 00:40:13,351
The Bombay Stock Exchange was actually getting annual returns
497
00:40:13,375 --> 00:40:16,393
of on average about 48%, which is remarkable. So what
498
00:40:16,417 --> 00:40:21,850
you actually notice is that India has become an outpost
499
00:40:21,874 --> 00:40:26,040
of global finance capital.
500
00:40:29,166 --> 00:40:31,351
-Finance capital, which Marx called fictitious is said
501
00:40:31,375 --> 00:40:36,142
to have lifted around 200 million people up to the middle
502
00:40:36,166 --> 00:40:38,850
class, but left behind an estimated 800 million more,
503
00:40:38,874 --> 00:40:42,623
surviving on one dollar a day.
504
00:41:26,541 --> 00:41:30,184
-Stagnation so severe that in the United States for example,
505
00:41:30,208 --> 00:41:33,142
a CEO was making 20 times more than his employees
506
00:41:33,166 --> 00:41:38,600
in the 1950's. In 2000, his salary ballooned to 120 times
507
00:41:38,624 --> 00:41:45,040
and in 2013, it almost doubled again to 204.
508
00:42:18,916 --> 00:42:22,558
-This is CNN Breaking News.
509
00:42:22,582 --> 00:42:25,226
It was a Monday morning like none other in the 158 year
510
00:42:25,250 --> 00:42:27,892
history of financial giant Lehman Brothers.
511
00:42:27,916 --> 00:42:31,832
The company went bankrupt.
512
00:42:35,166 --> 00:42:38,309
-If capitalism is not on its deathbed as Marx predicted,
513
00:42:38,333 --> 00:42:40,600
then what could be an alternative theory to explain
514
00:42:40,624 --> 00:42:45,040
the 2008 financial crisis and its aftermath?
515
00:42:48,166 --> 00:42:50,558
-We recognize that the very nature of globalization, which
516
00:42:50,582 --> 00:42:57,184
creates ever higher standards of living, also is the process
517
00:42:57,208 --> 00:43:00,309
which we call creative destruction. The problem with
518
00:43:00,333 --> 00:43:06,040
creative destruction is that it is destruction.
519
00:43:07,582 --> 00:43:09,226
-Creative destruction was a term coined by the early
520
00:43:09,250 --> 00:43:14,207
20th century economist Joseph Schumpeter.
521
00:43:15,417 --> 00:43:17,767
-Schumpeter's key idea of creative destruction was
522
00:43:17,791 --> 00:43:19,725
the idea that capitalism is constantly revolutionizing
523
00:43:19,749 --> 00:43:23,207
itself from within.
524
00:43:24,749 --> 00:43:26,517
He called it the process of industrial mutation,
525
00:43:26,541 --> 00:43:30,142
where there's incessant change destroying the old and bringing
526
00:43:30,166 --> 00:43:33,434
in the new and the agent of this change, the person who carried
527
00:43:33,458 --> 00:43:36,416
this change out is the entrepreneur.
528
00:43:40,375 --> 00:43:43,642
-Every once in a while, a revolutionary product comes
529
00:43:43,666 --> 00:43:47,309
along that changes everything.
530
00:43:47,333 --> 00:43:49,476
-So the basic idea of creative destruction is that there's
531
00:43:49,500 --> 00:43:51,351
a new product that's the creative side for a new
532
00:43:51,375 --> 00:43:56,558
method of producing and that's all to the good, but there's
533
00:43:56,582 --> 00:43:59,558
also the destruction side which is that it wipes out
534
00:43:59,582 --> 00:44:03,142
some earlier method or product and there's a loss there.
535
00:44:03,166 --> 00:44:05,976
There's a social loss, there's a human loss. Schumpeter didn't
536
00:44:06,000 --> 00:44:08,684
pay quite as much attention to the loss side as
537
00:44:08,708 --> 00:44:11,017
to the creative side.
538
00:44:11,041 --> 00:44:16,142
-Today we celebrate the first glorious anniversary
539
00:44:16,166 --> 00:44:18,975
of the information purification directives. We have created
540
00:44:18,999 --> 00:44:23,725
for the first time in all history a garden of pure
541
00:44:23,749 --> 00:44:26,623
ideology.
542
00:44:43,541 --> 00:44:50,725
We are one people, with one will, one resolve, one cause.
543
00:44:50,749 --> 00:44:58,142
We shall prevail!
544
00:44:58,166 --> 00:45:02,809
On January 24th, Apple Computer will introduce Macintosh.
545
00:45:02,833 --> 00:45:09,416
And you'll see why 1984 won't be like 1984.
546
00:45:30,417 --> 00:45:32,558
-So are we in the midst of a crisis, which is part
547
00:45:32,582 --> 00:45:37,351
of an endless cycle of creative destructions or in the midst
548
00:45:37,375 --> 00:45:40,476
of a system which as Marx predicted is indeed in
549
00:45:40,500 --> 00:45:43,207
a terminal downwards spiral?
550
00:45:46,791 --> 00:45:48,393
-It was probably the weekend before Lehman's went bust.
551
00:45:48,417 --> 00:45:54,184
And it's normally a little bit noisy, but at the time,
552
00:45:54,208 --> 00:45:56,767
it was, you could hear a pin drop. It was that deathly
553
00:45:56,791 --> 00:46:01,393
quiet. And I could almost feel that the global system was
554
00:46:01,417 --> 00:46:06,623
frozen. And it was quite a scary thought.
555
00:46:09,000 --> 00:46:11,767
It took me back to a lot of the things that I used to read
556
00:46:11,791 --> 00:46:14,809
about and study when I was much younger. The days when
557
00:46:14,833 --> 00:46:17,476
I actually read Marx for fun.
558
00:46:17,500 --> 00:46:20,767
-All Marx and Engels' warning over the dangers of monopoly
559
00:46:20,791 --> 00:46:24,975
capitalism and concentrated finance have come to pass.
560
00:46:24,999 --> 00:46:31,558
So why then no total collapse of capitalism? Because right
561
00:46:31,582 --> 00:46:36,684
around the world governments have been forced to bail out
562
00:46:36,708 --> 00:46:40,832
the so-called free market.
563
00:46:43,166 --> 00:46:45,809
We have bailed out the banks, we have subsidized industries,
564
00:46:45,833 --> 00:46:47,184
we sorted out the insurance sector, we've underpinned
565
00:46:47,208 --> 00:46:51,850
financial services. It is the forces of collectivism
566
00:46:51,874 --> 00:46:56,832
which have saved capitalism.
567
00:46:59,417 --> 00:47:04,226
-In 1991, socialism died, at least communism,
568
00:47:04,250 --> 00:47:09,416
in the Eastern Block. In 2008, capitalism died.
569
00:47:10,208 --> 00:47:13,975
When I was a young student of economics, the great
570
00:47:13,999 --> 00:47:17,809
debate was between socialists who believed in central planning
571
00:47:17,833 --> 00:47:22,226
and Hayekians or liberals who believed in the miracle
572
00:47:22,250 --> 00:47:26,517
of the market in organizing economic activities.
573
00:47:26,541 --> 00:47:32,142
The argument of the pro-market theorists was that capitalism is
574
00:47:32,166 --> 00:47:37,600
a Darwinian struggle where the fittest prevail and the less
575
00:47:37,624 --> 00:47:41,476
fit, the more inefficient, the least productive
576
00:47:41,500 --> 00:47:43,351
and profitable perish.
577
00:47:43,375 --> 00:47:46,142
-The New York State's attorney said that Citigroup, Merrill
578
00:47:46,166 --> 00:47:48,393
and seven other banks which got a 175 billion dollars in tax
579
00:47:48,417 --> 00:47:54,309
funded bail out money, paid out 33 billion in bonuses.
580
00:47:54,333 --> 00:47:58,393
-What happened after 2008, with a particular way in which
581
00:47:58,417 --> 00:48:04,184
the bankers were saved was Darwinism inverted.
582
00:48:04,208 --> 00:48:08,558
The more unsuccessful you were as a banker, the greater
583
00:48:08,582 --> 00:48:13,558
your bank's losses, the greater the support you got from
584
00:48:13,582 --> 00:48:16,558
the tax payers and the more successful you became
585
00:48:16,582 --> 00:48:19,558
at extracting from the rest of society the surplus that
586
00:48:19,582 --> 00:48:24,184
the rest of society was producing. So we have a new
587
00:48:24,208 --> 00:48:27,476
regime which I call "bankruptocracy". It's
588
00:48:27,500 --> 00:48:31,040
the rule by bankrupted banks.
589
00:48:39,999 --> 00:48:42,184
-The whole point about the contradictions in capitalism
590
00:48:42,208 --> 00:48:46,017
is not specifically whether Marx's analysis is relevant,
591
00:48:46,041 --> 00:48:48,142
which personally I think, in many ways it is,
592
00:48:48,166 --> 00:48:52,809
but it's the outcome, it's the synthesis and our capacity
593
00:48:52,833 --> 00:48:57,207
to basically nurture and establish coping mechanisms.
594
00:49:04,833 --> 00:49:07,142
On Marx's tombstone, as you know if you have been there,
595
00:49:07,166 --> 00:49:10,142
there's a inscription taken from the thesis on Feuerbach
596
00:49:10,166 --> 00:49:12,975
which says: the philosophers have only interpreted the world
597
00:49:12,999 --> 00:49:16,809
in various ways, but the point however is to change it.
598
00:49:16,833 --> 00:49:18,558
Which is precisely what our antecedents have done
599
00:49:18,582 --> 00:49:23,226
by developing coping mechanisms like institutions of the rule
600
00:49:23,250 --> 00:49:26,975
of law, limited liability companies, trade unions,
601
00:49:26,999 --> 00:49:30,767
mutual societies, insurance, welfare and technological
602
00:49:30,791 --> 00:49:35,934
discoveries that drive productivity income and jobs.
603
00:49:35,958 --> 00:49:39,101
Finding those coping mechanisms is an endless task and we need
604
00:49:39,125 --> 00:49:41,832
to make more progress.
605
00:49:51,582 --> 00:49:55,351
-Marx finally finished "Das Kapital". He had watched
606
00:49:55,375 --> 00:49:59,558
his wife become ill, his daughter suffer ill-health
607
00:49:59,582 --> 00:50:03,558
and poverty. He had buried now four children by the time
608
00:50:03,582 --> 00:50:08,600
"Das Kapital" was published and the family waited for
609
00:50:08,624 --> 00:50:11,142
the recognition that they all believed he deserved
610
00:50:11,166 --> 00:50:15,975
for a book that they felt would not only change their lives,
611
00:50:15,999 --> 00:50:19,351
but would change the world and nothing happened.
612
00:50:19,375 --> 00:50:22,975
When "Das Kapital" was published, Engels and the family
613
00:50:22,999 --> 00:50:25,351
frantically started writing reviews in order for it
614
00:50:25,375 --> 00:50:27,684
not to be ignored, but their reviews were the only ones
615
00:50:27,708 --> 00:50:31,142
really that were written.
616
00:50:31,166 --> 00:50:35,809
-Marx never really recovered. He died on March 14th 1883,
617
00:50:35,833 --> 00:50:39,517
2 years after Jenny. Only 11 people showed up
618
00:50:39,541 --> 00:50:44,767
at his funeral. Friedrich Engels eulogized him. "On the afternoon
619
00:50:44,791 --> 00:50:49,393
of the 14th of March 1883 at a quarter to 3", Engels said,
620
00:50:49,417 --> 00:50:54,832
"the greatest living thinker ceased to think."
621
00:50:59,666 --> 00:51:02,393
-The Marx family was originally buried in a very small and
622
00:51:02,417 --> 00:51:06,642
modest plot, here in Highgate, just down the row from where
623
00:51:06,666 --> 00:51:09,623
the monument is today.
624
00:51:13,041 --> 00:51:17,393
In 1956, the communist party decided that Marx, such
625
00:51:17,417 --> 00:51:20,517
a monumental figure, really deserved a larger
626
00:51:20,541 --> 00:51:23,416
memorial.
627
00:51:29,791 --> 00:51:32,809
And so they built this. And in a way, I think this really
628
00:51:32,833 --> 00:51:36,517
is a very good indication of what happened to Marx's
629
00:51:36,541 --> 00:51:41,101
legacy, Marx's ideas, how it was interpreted and misinterpreted
630
00:51:41,125 --> 00:51:43,832
in the 20th century.
631
00:51:55,999 --> 00:52:00,017
-In 1929, capitalism seemed to be on its knees and Marx's
632
00:52:00,041 --> 00:52:02,351
prediction came closer to fulfilment than ever.
633
00:52:02,375 --> 00:52:06,725
Two individuals had diametrically opposed ideas
634
00:52:06,749 --> 00:52:10,351
of how to save capitalism from itself. The debate between them
635
00:52:10,375 --> 00:52:15,207
has shaped the past century and is still raging today.
53585