Capital in the 21st Century
This is a documentary based on the 2013 book of the same name by French economist Thomas Piketty. I have a copy of it sitting on a bookshelf, but even if you've never read it you might recall the stir it made at the time, which was pretty impressive for a book about economics. In it, Piketty laid out an argument for the progressive taxation of global capital, rationalized by his research into economic history showing that capital grows faster than economies as a whole, giving the owners of it — the major economic players in the game of life (so to speak) — a built-in advantage over everyone else. One that, if left unchecked, inevitably results in astronomical inequalities in wealth and political power over time, which in the past have resulted in untold human suffering and even war.
Here's the official U.S. trailer:
The documentary is available on several streaming sites, including YouTube Movies for $4.99 (if you don't subscribe to any streaming services), but I'll just seed the Netflix page here.
S E E D E D C O N T E N T
Capital in the Twenty-First Century
Here's an excerpt from an article about the documentary:
“CAPITAL IN THE 21ST CENTURY”: FINALLY, A MOVIE THAT TELLS THE STORY OF HOW WE GOT INTO THIS MESS
... “Capital in the 21 st Century” understands that the daily facts about capitalism seem boring, irrelevant, etc., to most people because they’re not part of a story. They’re like baseball scores when you don’t know anything about baseball’s rules or teams or history. But understanding the story of capitalism is like understanding all of that about baseball, plus having a team to root for, and realizing that, if your team loses, you’re going to die. This makes the business section much more exciting.
The movie starts by going back to the period 250 years ago when capitalism first gained momentum via the Industrial Revolution. Until then Europe was feudal, with a swarm of kings, dukes, earls, and marquessates holding most of the wealth in the form of land.
But factories generated new, insurgent wealth. Both the American and French revolutions were in part fights between old feudal elites and a new business elite struggling to be born. And while the old and new elites disagreed on who should be in charge, they both agreed that regular people shouldn’t be.
While no one remembers this, even the Communist Manifesto in 1848 acknowledged the accomplishments of the business class. “The bourgeoisie,” Karl Marx and Friedrich Engels wrote, “has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals.”
The problem was that in the pursuit of profit, capitalism also generated spectacular new forms of exploitation. “Capital in the 21 st Century” spends time on examples such as the massive expansion of slavery, the murderous rampages of European colonialism, and “master and servant” laws in the United Kingdom that made it illegal for workers to quit. The movie’s key point about this time is that unbound capitalism made countries richer overall, but there was nothing inherent in it that improved life for regular people. In fact, it was in many ways worse for them than when they were governed by lords and ladies.
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Here's a clip from the documentary in which a professor from UC Irvine talks about an experiment they conducted which simulates basic class differences with a regular Monopoly board game.
I found the attitude differences expressed by the players interesting, but not as interesting as the part about how none of the 'rich' players attributed winning to the obvious advantage they were given by the rule changes.
You could try it at home if you have a Monopoly game.
I know it's just a simple analogy, and the game always ends up with a winner anyway, but it does kind of illustrate the advantage and privilege the wealthy have over the poor, especially when just starting out in life and trying to get ahead.
Right before someone goes bankrupt and loses the game, be sure to check and see if telling them to pull themselves up by their bootstraps helps.
This might even be something social studies teachers could do in the classroom to help illustrate what class differences actually mean in life. After the pandemic, of course.
There is a way to have capitalism and economic "equality" co-exist. Wealth taxes such as Elizabeth Warren proposed a few years ago. Since it would be destructive of capitalism to imbed "fairness" in laws about capitalist activity, undue profit needs to be taxed and the excess returned to the larger society in the form of social programs. Otherwise the inequality just gets greater and greater.
That's basically Piketty's main theme, with a special emphasis on capital.
Here's a documentary anyone interested in this topic would probably appreciate
One wonders if those who really should watch this for historical perspective to enable them to properly analyze where the USA is heading (and why) will actually do so. I suspect not.
Recent comments elsewhere on the site are partly why I posted this. No idea if anyone will actually watch this (or maybe even read the book), but at least the subject is on-topic here.
It's a rigged game in favor of the ''haves'' and IMO, it isn't going to change. The US will follow the current path until, when? revolution?
And it isn't even hard to see. Hell, a few months ago Bezos made $13 billion in a single day without even lifting a finger, it was just a function of the stock market. Of course, he's lost billions because of stock fluctuations, too. But still, as the linked article points out, by July he'd already added $74 billion to his net worth this year alone.
I don't even like thinking about that. Full-blown revolutions against capitalism have a track record of making things worse instead of better.
I just hope that before long we start seeing more support for regulating capital and levelling the playing field a good amount. It blows my mind that there's so much opposition to it, especially considering America's own economic history from the Gilded Age through the rise of the labor movement. Then again, a lot of things about this country have been blowing my mind lately.
Propaganda efforts funded by the very wealthy almost certainly explain much of the opposition, though. They've been successful in making it into a partisan political identity thing, even among the poor (against their own interest). And, boy, did they get what they paid for. Even Charles Koch recently admitted that it's gone too far.
The key here (as you obviously know) is leverage. What many people do not seem to comprehend is that there is a point where an individual's leverage is too much over the top. We must remember that it is society that enables wealth. Without society the leveraging opportunities would not exist. It is thus society that has the right to mitigate the leverage. The reason society would do this is to keep itself healthy. When the power differential becomes too great, societies implode and everyone loses.
For some people to understand this they need examples. So I will offer an example scenario. Our society could, for example, offer an open-ended opportunity for our most ambitious, bright, energetic soles to pioneer disruptive technology and change the world. And these folks (and their helpers) will become magnificently wealthy in the process. But their ability to enjoy an exponential growth in wealth will be mitigated at a certain level. Let's pick $200 million as the individual level just to have a number. Growing from $200 million to $250 million will be at a linear pace (not exponential) with the excess redirected back into society in general. Growing from $250 million to $300 million would be slower paced still. There is, in effect a diminishing return dynamic at the upper end of wealth accumulation.
Now, when over-leveraged wealth is held by society, it is used for public good. That could mean anything from infrastructure to health care. It should go to general quality of life for everyone.
Finally, I am of the opinion that our government would fuck this up. That if this wealth were truly held by society as described, that government would waste it, redirect some to private pockets, etc. I do not know if we will ever evolve to a government that could responsibly deal with the people's money so that remains the biggest impediment (IMO) to this notion.
Not to mention the power big money has over politicians at the moment, especially the Republicans.
Let's revisit the game of monopoly. Let's make the objective of the game is to acquire everything; acquire all the properties and all the money in the bank.
In the unaltered game the initial phase is competition for advantage controlled mostly by chance. But whoever gains an advantage needs to keep all the players in the game to acquire everything. Forcing the other players out of the game eliminates the possibility of acquiring everything. The game ends before everything can be acquired. The player with the advantage can leverage that advantage to acquire properties. However, the player with the advantage must utilize benevolent behavior to keep the other players in the game.
The advantage provides the means to acquire. Benevolent behavior provides the method to acquire.
Of course the real world economy is much larger and more complex than a board game. However the means and methods are the same in the real economy. The size of the real world economy only means the game is played across many generations rather than the hours required for the game of Monopoly.
I think you're reading a little too much into that Monopoly thing and missing the point.
And as far as benevolence goes, you should watch the doc (if you haven't) and revisit the early days of capitalism, before the labor movement existed.
Before the labor movement, the monetary system was based upon a metallic reserve. Simply creating money out of thin air wasn't possible. The money supply was limited by available resources. That's no longer the case. So the comparison to the early days of capitalism isn't as straightforward as is being suggested. The game of monopoly simulates early capitalism with a finite money supply. Today the money supply is unlimited.
The game of monopoly can be played to achieve different objectives. One objective would be to force the other players out of the game. And there are players in the real economy pursuing that same objective. Another objective for the game would be to acquire everything by leveraging advantage and utilizing benevolent behavior. Under today's capitalism governments, in general, are pursuing that second objective.
Under a metallic reserve the objective was to force players out of the game resulting in a cycle of severe depressions. The Great Depression of the 1930s wasn't the first severe depression and may not have been the most severe depression in history. Eliminating the metallic reserve was viewed as a way to keep the players in the game by removing the limitation on the money supply and avoid severe depressions. As we've seen that only shifted the cause of depressions away from the money supply and toward other finite resources. And the elimination of the metallic reserve really hasn't changed that overleveraging scarce resources is still the cause of depressions.
Elimination of the metallic reserve hasn't changed the game. What has changed is the objective of the game. Today's capitalism requires keeping players in the game as long as possible. That shift in objective requires using advantage as the means of acquisition and using benevolence as the method of acquisition. A player that owns it all can be charitable because they will get back whatever they give.
Not governments, aristocracy. The exceptions are state capitalist nations where the state predominantly owns the productive resources of the economy. Then, still, it is the authoritarian elites (a form of aristocracy) controlling capital.
Yes, what you are calling the aristocracy has become a technocratic oligarchy inseparable from government.
Gifting the economy to the financial sector has transformed the United States (and much of the world) into a system of monetized socialism. The monetary system has displaced labor and production as the means of supply. See my explanation @5.2.7
In a monetized economy the government owns and regulates the money supply supply through central planning. Governments can create and distribute money however they wish. There are no longer any limits on the money supply. So it shouldn't be surprising that a technocratic oligarchy would attempt to control government.
I use the term aristocracy because, for all of recorded history, it is the correct term to refer to the holders of economic power .
It's impossible to avoid 'haves' and 'have nots'. Nature is not equitable. Random chance does not provide equal outcomes although random chance is fair. The simple fact that planet earth is the only planet in our solar system suitable for life bears witness to the inequalities baked into the universe.
We cannot change the unchangeable. Blaming the 'haves' won't accomplish much. The advantages of the 'haves' cannot be eliminated. Killing the rich and redistributing what they own may reset the disparity meter but the cycle of disparities will begin again. Disparity and inequality is baked into the natural functioning of the universe. There aren't enough degrees of freedom that allows overcoming inequalities.
We should be paying more attention to providing what people need than griping about the rich. Everyone driving a Rolls Royce is not an appropriate goal.
Nor should it be. A purely egalitarian system is impossible unless it was forced against nature by an authoritarian rule. It is grossly unfair and undesirable. The phrase is referring to gross inequities in terms of wealth and privilege, not the fact that people have different levels of wealth.
Do you see any problem whatsoever with Jeff Bezos (current richest person) controlling 186 billion dollars of personal wealth?
Note: I am not asking you about a person with a net worth of $20 million dollars vs one with a new worth of $500,000. That is, I am not talking about natural disparity that would result from one person applying one's skills, working hard and being successful to another who engaged in a more mediocre career ambition. I am talking about capital leveraging ... the kind of leveraging that is enabled by society. Should society allow such runaway leveraging which results in capital being accumulated into a tiny minority of the citizenship? Where 1% holds as much wealth as the other 99%?
Do you see any problem at all here?
No, I do not see Jeff Bezos controlling $186 billion as a problem.
The problem is that controlling $186 billion allows denying people basic necessities. The purpose of any type of economy is to allow people to obtain what they need to live. And the economy of the United States is failing to fulfill that purpose.
Taking from the rich and giving to the poor won't solve that problem. That may change who are the 'haves' and 'have nots' but cannot eliminate inequalities and disparities baked into the universe. A complex economy is not 100 pct efficient. No economic system can be constructed that will achieve the equivalent of perpetual motion.
IMO what we need is clarity on expectations. What do we expect the economy to achieve? Once a goal has been established then the economy can be regulated to achieve that goal. That's not an easy undertaking because it will require ensuring that the 'have nots' have enough. How much is enough?
Taking is not what I have suggested. I have suggested a systemic change to mitigate runaway leveraging of capital.
I agree that we need to make systemic changes to the economy. My view is that we need to clarify what we expect from the economy to guide those systemic changes.
An economy that achieves what is expected will make being rich less relevant. IMO the current attention focused on the rich arises from a recognition that the economy is not meeting expectations. But focusing attention on the rich is actually a distraction. What the rich does or doesn't do isn't as important as how we regulate the economy to provide what we expect. We seem to be focusing too much attention on the wrong end of the economy.
We agree on this point.
The problem is made worse by overpopulation. Money is spread too thin on the lower end which makes it too had to build up a reserve. i
But there isn't any limit on the supply of money. The limitation of a metallic reserve has been eliminated. People like to throw around the label of fiat money. What that means is money no longer represents anything of tangible value.
The world has gradually been moving toward a socialized monetary system. Governments control the supply of money and can distribute that supply of money however they choose. Productive economies are being replaced by monetized economies. And the public owns the means in that monetized economy. That's why I've pointed out that the United States is already a socialist economy.
Labor and production are antiquated and obsolete vestiges of capitalism in a monetized economy. Gradually budget deficits will no longer matter. Fiscal policy will be directed toward benevolent behavior to keep all the players in the game. Eventually the money supply will become so large that the government can be charitable; the government will get back what it gives. Believe it or not that was the idea behind the Laffer curve where tax cuts would increase revenue.
The reality is that capitalism is regulated by demand-side economics. Supply-side economics won't work under capitalism. Under capitalism, allocation of labor and resources depend entirely upon economic signals from the demand-side of the economy. A market cannot be created without consumers.
Socialism is a supply-side economic system where allocation of labor and tangible resources are regulated by central planning to control supply of goods and services. Monetized socialism replaces labor and tangible resources with money and controls the supply of money. Monetized socialism displaces tangible labor and resources as the means of supply with money as the means of supply.
Today's governments have the ability to make everyone millionaires. But that won't accomplish anything. The natural disparities and inequalities baked into the universe only means that todays billionaires would become trillionaires. In reality nothing would change. Monetized socialism won't work better than any other type of supply-side economics.
Everyone should look closely at the game of Monopoly. There is no labor component in Monopoly. Winning the game does not involve exploiting workers.
Monopoly mimics a consumer economy. And winning the game involves exploiting consumers. It's important to note that consumption in the game is not by choice. The players are required to move (and consume) according to the roll of the die. Using money to add houses (adding capital) increases ability to exploit consumers who have been forced to consume.
There isn't any way to apply socialist economic theories to the game of Monopoly because there are no workers (or production) included in the game.
I dont think the analysis of the game as used in the study used labor vs capital as one of its criteria. The point was that some of the participants had built in advantages when the game started. Which is what those who inherit wealth have in the game of life.
But the advantage allows greater exploitation of consumers in the altered game just as in real life. Consumers are the source of money that enables disparities.
Using slave labor to produce something that is obsolete and no longer needed won't make anyone rich; assuming consumers have a choice. Getting rich requires exploiting consumers. That is the what the game of Monopoly simulates. That is how real world capitalism works, too.