All language subtitles for Capital in the Twenty First Century (2019).eng.forced

I was born in 1971 and was 18
in 1989 when the Berlin Wall fell.

I sat glued to the radio and listened
when the communist regime fell.

As a student, I traveled to Romania,
Hungary and Russia.

I was there and saw the
consequences of the collapse.

I saw a failed economic and social system.

A political system that had
promised personal freedom

but instead created misery
and political repression.

When the Communist
House of cards fell,

the capitalist
argument was reinforced

but it went too far.

The fall of the Soviet Union led
to an eternal belief in liberalization.

It was accompanied by a new
glorification of private property.

As a result, rising injustices
increased nationalism and xenophobia

just as before the
First World War.

The 21st century scares me,
because when I compare it with history,

we risk returning to a capitalist system similar to
the unequal world of the 19th and 20th centuries.

In Europe during
the 18th century,

capital was concentrated
to a small group of people.

The nobility made up one percent of the population.

Money limited social mobility.

You could not climb very high relying on work or study.

Often, in literature,
films and popular culture

we can follow the importance
of capital throughout history.

It is a darker story than the idyllic notion
of development and enlightenment.

The 18th century was no static world.

New political ideas demanded
equal rights for all

and an end to
inherited benefits.

The French Revolution was to a certain
extent based on double standards.

Their vision of "equality" was at best optimistic,
somewhat naive and at worst a bit cynical.

It was pretended that it would be equally
spontaneous, a bit like a fairy tale.

But political institutions needed
educational institutions, health care,

transport and a tax system
aimed at high-income earners.

At the time of the French Revolution
there was no such thing at all.

It was during this time
in the 19th century

that division of labor, inequality
and power was established worldwide.

First with slaves and then with a
relentless colonial rule.

It is difficult to say how much of Europe's
wealth comes from their colonial past,

but the dominance gained during
the industrial revolution

was linked to a military rule.

Between 1870 and 1914, Britain and
France, the great colonial powers,

owned very much the world over.

They raised so much profits,
dividends, interest and rents

that they continued to invest
in other parts of the world.

The rest of the world worked for them.

Around 1914,
in a city like Paris,

one percent of residents owned 70
percent of what was possible to own.

Two thirds of the population died
without owning any property.

Nationalism increased and the countries
of Europe began to compete a little

because of the extremely
strong social tensions

due to a stagnant standard
of living and injustice.

Nationalism, competition between
countries, was used by the elite

to forget the class conflict and instead
rally around a national identity.

It contributed to the outbreak
of the First World War

in the summer of 1914.

If you read John Steinbeck's
"Grapes of Wrath"

you understand how enormous the
shock was when the system broke down.

When the banks went bankrupt,
people lost their money.

Demand in other areas declined, which in
turn led to bankruptcies and unemployment.

The great crisis of the
1930s was so traumatic

that the public and their political
representatives blamed capitalism.

War itself destroys capital.

First, you bomb and totally destroy cities.

But that's only a third of the capital.

What are the other two thirds?

One third is inflation, which destroyed public
debt to private individuals who funded the war.

The other third are new rules such as rent regulation,
state ownership and budget regulation.

The destruction of capital was not only bad
because society's balance of power was changed.

All are equal in the face of death.

War, all the victims and all the hopelessness,
make us realize that we are all human beings.

The new political context ultimately led to the
enlightenment and equality proclaimed in the 1700s.

If you follow the evolution of
inequality during the 20th century,

the strong middle class is
the most striking change.

Until 1914, there was no middle class.

It was almost as poor as the poorest.

During the first 30-35 years after the war,
economic growth prevailed.

Purchasing power increased significantly especially
among the lower classes and the middle class.

They could buy consumer goods,
get a better standard of living,

save for a house
and raise capital.

They were not very wealthy, but not poor either,
and held much of the country's capital.

But the middle class's share of capital has declined
more in the United States than in Europe.

The new direction can be quite alarming
if we look at the 21st century.

A major challenge for the future
is whether the middle class shrinks

and we risk an impoverished
middle class like 100 years ago.

All countries must tell us why they are richer
than others or why they have become poor.

That's what Reagan and Thatcher
told their constituents.

In the US there was a feeling that Germany and Japan,
those who had lost the war, caught up.

Reagan, and to some extent Thatcher,
pointed it out and said:

"Look, they're about to catch up.
We have to change something, but what?"

"It's the fault of the welfare state
brought about by the New Deal."

"It has made us weak."

"We must return to the mythical capitalism
of the 19th century and gain new power."

When capital becomes
too concentrated,

its influence over the media and the financing of political
campaigns and parties that benefit the most increases.

Their motto: "one dollar, one vote"
or "one euro, one vote"

goes against the motto of
democracy: "one person, one vote".

In 2015, Google Alphabet estimated a
profit of $15.5 billion in Bermuda,

but they aren't doing
anything in Bermuda.

It is an example of how countries are
stealing tax bases from each other.

Another is wealth management.

They sell shell companies, numbered accounts
protected by bank secrecy, to wealthy families.

You cannot levy additional taxes on
what you can not measure.

We live in a statistical
fog about who is wealthy,

who owns the building in New
York, in Paris?

When we try to look it up,
we find shell companies.

You can fight the tax haven
in a fairly simple way.

Penalties must be imposed on
countries that facilitate tax evasion

and change the calculation of
taxable profits in all countries.

Take Apple for example.

Imagine Apple making
$50 billion in profits.

Ten percent of all sales
are made in France.

Then France could say:

"Ten percent of Apple's global profit,
$5 billion is to be taxed in France."

Today, multinational companies can manipulate
a lot of things but not where the customers are.

They are in France, Germany,
England, USA, not in Bermuda.

Since the late 1970s, Chinese average
income has increased by about 800 percent.

That's a huge amount.

However, the average income for the
rich has increased by 2000 percent.

It is a country of growth but
extremely unfair growth.

Inheritance has once again become
as important during the 21st century

as in the 19th century
in England and France.

Inheritance means that a small part
of the population can live very well

because the inherited
wealth creates an income.

Returns have almost always been
higher than economic growth.

If we go back to the 18th
century until today, 2018,

the world economy has increased by
1.6 percent per year for 300 years.

This is much less than the return on
capital, which is 4-5 percent per year.

Is it a disaster? Not necessarily.

If everyone owns
part of the capital

if everyone owns an apartment and
participates in a pension fund,

it is not bad if the
return is higher.

The problem is in the concentration of
ownership and thus the power of society.

It leads to a resurgence
of social hierarchies

and increased tensions among
the working and middle classes.

There are always politicians who are
attracted to the increase in inequality.

This was evident even before 1914.

I'm worried about the 21st century.

We fail to regulate
international capitalism,

and don't make multinationals
and billionaires pay taxes.

Then we let our anger out on immigrants.

It hurts less than going
after the companies.

But to solve the increased injustices,
we have to tax capital progressively.

And ownership can not last forever.

Those who have a lot of capital
should give back to the general

one, two, three percent,
or five or ten if you have billions.

If you continue to invest wisely with high
returns you will continue to prosper.

If you get a high
return, but do nothing,

the tax will erode
that mechanism.

In this way we can control the concentration
of capital and then also the political power

as well as the right to
property for the middle class.

Many do not want to discuss
taxes on income and inheritance

but without it, the attempts to regulate capitalism
have terrible consequences for everyone.

The challenge of creating a more just society
is different than in the 20th century.

The important thing is that
it is not technically impossible.

It is a political and
intellectual challenge.

And given the story, we can be optimistic.

If we want a society that
is peaceful and harmonious,

we must avoid it
being too unfair.

I am in favour of capital control
and an overrun of capitalism.

With means that are more
democratic, more participatory

and that allow us to see a
future in the 21st century.