Capital in the Twenty-First Century

of bankruptcy and unemployment. 99 00:31:51,284 --> 00:31:54,788 The crisis of the 1930s creates such a strong trauma 100 00:31:54,871 --> 00:31:57,999 that leads to the public and politicians 101 00:31:58,417 --> 00:32:01,628 holding capitalism accountable. 102 00:36:04,913 --> 00:36:08,458 We want to see no more class divisions. 103 00:36:10,001 --> 00:36:12,504 We want to be one people. 104 00:36:13,046 --> 00:36:18,051 And you, my youth, are to be this people. 105 00:39:00,713 --> 00:39:04,634 The wars themselves are used to destroy capital. 106 00:39:06,469 --> 00:39:11,057 Firstly, there are bombings that destroy entire cities. 107 00:39:11,140 --> 00:39:12,140 But at the same time, 108 00:39:12,183 --> 00:39:15,979 this only accounts for a third of the total loss of capital. 109 00:39:17,814 --> 00:39:20,859 So where do the other two-thirds come from? 110 00:39:20,942 --> 00:39:24,946 A third is from inflation that destroys the public debt, 111 00:39:25,029 --> 00:39:29,325 which was lent by the citizens to finance the war. 112 00:39:30,159 --> 00:39:33,538 And then there is a third from new rules, 113 00:39:33,830 --> 00:39:35,456 like rent controls, 114 00:39:35,540 --> 00:39:37,417 nationalisations and financial regulations. 115 00:39:39,210 --> 00:39:43,298 But this collapse of capital is not necessarily a bad thing 116 00:39:43,381 --> 00:39:46,092 because the power relationships within society are transformed. 117 00:40:06,362 --> 00:40:09,407 Everyone is equal in the face of death. 118 00:40:10,533 --> 00:40:14,913 Wars, with their death and despair, 119 00:40:15,163 --> 00:40:20,043 are also moments when humanity is found in us all. 120 00:40:29,886 --> 00:40:33,806 This new political context will ultimately lead 121 00:40:34,223 --> 00:40:38,311 to a realisation of the spirit of the Enlightenment 122 00:40:39,312 --> 00:40:41,606 and of equality proclaimed in the 18th century. 123 00:44:15,945 --> 00:44:18,447 If you look at the development of inequality 124 00:44:18,531 --> 00:44:22,160 through the 20th century, the most striking transformation 125 00:44:22,243 --> 00:44:27,331 is the growth of an extremely strong middle class. 126 00:44:28,749 --> 00:44:32,295 Until 1914, the middle class doesn't exist. 127 00:44:33,045 --> 00:44:36,299 Or more accurately, they're almost as poor as the poorest. 128 00:44:40,344 --> 00:44:42,430 The decades after the war - 129 00:44:42,513 --> 00:44:45,224 30 years that saw glorious economic growth - 130 00:44:45,308 --> 00:44:49,562 are marked by a steep increase in purchasing power, 131 00:44:50,021 --> 00:44:53,482 especially for lower and middle-class workers 132 00:44:53,524 --> 00:44:58,404 who can buy consumer goods, improve their standard of living 133 00:44:58,529 --> 00:45:02,617 and save money to buy a house and acquire capital. 134 00:45:15,421 --> 00:45:20,051 They're a group who are neither very rich nor completely poor, 135 00:45:20,134 --> 00:45:22,970 but still have a substantial share of national capital. 136 00:45:36,192 --> 00:45:37,652 But in recent decades, 137 00:45:37,735 --> 00:45:41,239 the share of wealth owned by the middle class 138 00:45:41,322 --> 00:45:44,408 has started to decline sharply in the US 139 00:45:44,700 --> 00:45:46,327 and a little less sharply in Europe. 140 00:45:50,539 --> 00:45:53,584 Clearly we've taken a very different direction, 141 00:45:53,668 --> 00:45:57,546 which can be quite disturbing if we look into the 21st century. 142 00:45:59,966 --> 00:46:02,677 One of the greatest challenges for the future 143 00:46:02,760 --> 00:46:05,763 is whether the middle class will continue to shrink, 144 00:46:05,846 --> 00:46:08,474 with the risk of returning to an impoverished middle class 145 00:46:08,557 --> 00:46:11,143 like we had a century ago. 146 00:51:51,442 --> 00:51:54,820 Every country feels the need to tell a story about 147 00:51:54,903 --> 00:51:59,366 why it's richer than another or why it has become poorer. 148 00:51:59,867 --> 00:52:03,996 And it's this story that Reagan and Thatcher tell 149 00:52:04,455 --> 00:52:07,124 the American and British public. 150 00:52:32,941 --> 00:52:35,235 In the United States there was a feeling 151 00:52:35,444 --> 00:52:37,863 that Germany was catching up, 152 00:52:37,946 --> 00:52:39,823 that Japan was catching up - 153 00:52:39,907 --> 00:52:42,493 these countries that lost the war. 154 00:52:42,576 --> 00:52:46,538 And Reagan, and also Thatcher to a certain extent, 155 00:52:46,622 --> 00:52:49,667 use this ideological argument to say, 156 00:52:49,875 --> 00:52:52,252 "Look, these countries are catching up. 157 00:52:52,336 --> 00:52:56,131 "Something needs to change. What could we change? 158 00:52:56,215 --> 00:52:59,218 "Ah, it's because of the welfare state 159 00:52:59,968 --> 00:53:03,222 "that was put in place following the New Deal. 160 00:53:03,305 --> 00:53:05,182 "That's what's made us soft. 161 00:53:05,265 --> 00:53:07,893 "And so we must return