The web is abuzz with great videos on rethinking economics – from 3 minute talking heads to 2 hour documentaries. So I’m launching a video club on this blog to share the best that I’ve watched, to debate and critique their perspectives, and to discover other people’s top recommendations.
First up are four fab films on capitalism:
1. Capitalism by Stiglitz (2005) 43 minutes. Let’s kick off with this authoritative mainstream view from Joseph Stiglitz, once chief economic adviser to Clinton, and chief economist at the World Bank. He tells the story of capitalism through the story of his home town, New York City, which, as he says, “symbolises all that is great and all that is deplorable about the capitalist system.”
His view in short? “While I believe capitalism is the only practical way to run an economy or society, I’m also worried about the way in which a particular brand of free market capitalism is being promoted around the world.” His worries focus on the resulting wealth inequality and financial instability at home, and enduring poverty and debt in developing countries.
The documentary uses great historical film footage to give a basic introduction to ideas such as Adam Smith’s ‘invisible hand’, ‘free’ vs managed markets, globalisation, and the inherent instability of capitalist economies. But there is no mention of social exploitation, environmental degradation, or other externalised costs.
Stiglitz is a staunch defender of capitalist economies, claiming, ‘Capitalism needs to win the hearts and minds of people all across the world – the dangers of not doing so cannot be exaggerated…It’s in all of our interest to make capitalism a fairer system’. And his closing words (filmed in 2005) now sound prescient: ‘It’s been the most dynamic period of history – and it’s not over yet.’
2. Capitalism: A Love Story, by Michael Moore (2009) 127 minutes. Like Stiglitz, Moore tells the story of capitalism through his hometown – but rather than walk the heady streets of New York City, he beats the pavements of Flint, Michigan, once home to General Motors, now half boarded up.
He focuses on the experience of families at the sharp end of the capitalist bargain: those evicted because of foreclosures on their sub-prime mortgages, or those sacked overnight without back pay when the economy crashed.
But he also makes sure to focus our attention on the corrupt heart of corporate capitalism, highlighting, for example, the role played by former Goldman Sachs executives in steering US Treasury policy from the inside during the post-crash banking bailout.
Moore has a talent for reminding us that there have been earlier eras of strong public ethics, and leaders not afraid to speak of them – such as Carter who in 1979 warned the American public that ‘Owning things and consuming things does not satisfy our longing for meaning’, or Roosevelt who back in 1944 had proposed for the US a second Bill of Rights that promised health, education, decent housing, living wages, and security for all – captured in striking film footage which had been lost until Moore rediscovered it in the process of making the film. All well worth watching.
3. Crises of Capitalism by David Harvey (2010) 11 minutes. David Harvey is one of the best known Marxist thinkers and this witty RSA Animate is a brilliant summary of his take on the cause of the 2008 financial crisis – told not on a trip around his hometown, but on a trip around a Monopoly board.
Many reasons have been given for the crisis, says Harvey: human nature, institutional failure, erroneous theory, and national culture. But the real reason was systemic risk – or what he calls ‘the internal contradictions of capital accumulation’ because (quoting Marx), “Capital cannot abide a limit‘.”
When financiers reap the lion’s share of economic growth (which they have done since the 1980s), wages don’t rise, so middle and working class demand drops out of the economy. It has to be replaced by credit cards, creating spiralling household debt – leading inevitably to mortgage defaults and collapse.
Taking the opposite view to Stiglitz, Harvey concludes “Any sensible person right now would join an anti-capitalist organisation“. It’s essential and compelling viewing.
4. Capital in the Twenty-first Century, by Thomas Piketty (2014), 4 minutes. There’s no choice but to conclude with the newest bloke on the capitalist block because Piketty’s work has had such instant impact and has reignited deep debates on capitalism. His already best-selling book is long and dense, but to be honest, most of his videoed presentations are too (such as this one at the Economic Policy Institute). He really deserves a 10 minute animate to make his spoken message far more accessible (and I’ll bet plans for a Piketty RSA Animate are underway…). While we wait for that, it’s lucky that his publisher made a reasonably snappy little video that captures some of his key points.
When the rate of return to capital (call it r) is higher than the growth rate of the economy (call it g) then wealth becomes more and more concentrated. And Piketty argues that we are back into an era where r is greater than g. As he calmly puts it, “You’d better start with some initial wealth“.
It’s a stark message, but he claims that he is not purely pessimistic. There are several possible futures, he says, and, ‘”There’s nothing natural in the history of income and wealth distribution.” But we are on a dangerous course: if the wealth at the top of the distribution keeps rising faster than global growth, all the wealth will soon belong to a very small elite and, “There will be a level of inequality which is simply not compatible with our democratic and meritocratic values“.
So there’s four very different perspectives on capitalism. Well worth a video night in, with a bowl of political popcorn to top it off.
Stiglitz, Moore, Harvey, Piketty: who amongst them captures the essence of 21st century capitalism?
And if you have some must-see recommendations to add to the list – from anywhere in the political spectrum – let me know.