Stephanie Flanders examines the revolutionary and controversial ideas of Karl Marx which, as the global financial crisis continues, are once again being taken seriously.
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00:00Dover, the most dangerous man in Europe, is about to arrive on Britain's shores.
00:17His preachings are so incendiary he's been forced out of his native country.
00:27Only liberal Britain will tolerate his presence on her soil.
00:33He heads to London to live in exile.
00:36The year is 1849.
00:43And the man is Karl Marx.
00:45Incredibly, this most dangerous of thinkers might offer the key to understanding the mess
00:49we're in today.
00:55Most people know Marx as the father of communism.
00:59You might be surprised to hear that most of what he wrote was about capitalism.
01:05And today his ideas about that are being taken seriously right at the heart of global business.
01:12His analysis was pretty on the button and explains a lot I think about some of the things
01:17that we see going on around in our economy today.
01:21For Marx, the best argument against capitalism was that it was inherently unfair.
01:26His ideas on inequality have more resonance than ever today.
01:32What Marx did do is to install this sense of urgency.
01:37Things cannot go on forever the way they are.
01:42In this series, we'll explore the lives and revolutionary thinking of three extraordinary
01:46men.
01:49John Maynard Keynes, Friedrich Hayek and Karl Marx.
01:55Their worlds were changing as never before.
01:58They saw that the fate of nations would hang on the power of money and they had radically
02:03different ideas about how to control it.
02:06Today, the stakes could hardly be higher.
02:11Of all the great thinkers who analysed capitalism, Marx had the most radical advice of all.
02:17Get rid of it.
02:32In 1989, Karl Marx's reputation lay in ruins.
02:39For most of us, the fall of the Berlin Wall meant the end of Marx.
02:44The Nazis rejected the horrors of a violent and repressive police state.
02:50And because the communist countries claimed Marx as their inspiration, his ideas were
02:55cast aside as well.
02:59Marx became associated with communism, indelibly associated with communism and indelibly associated
03:05with communist regimes because these regimes did their work in the name of Marx.
03:11So the association was very, very powerful.
03:15In fact, it was they who were claiming Marx rather than Marx, as it were, claiming them.
03:21But in the last few years, something strange has happened.
03:25It's like the global financial crisis has brought Karl Marx back from the dead.
03:30Now we still don't care what he said about communism, but people are going back to see
03:35what he said about capitalism, all its deep-seated flaws, with a nagging doubt.
03:41Is it all now coming true?
03:48When times were good, Marx was nowhere.
03:52But now the Western economies are in crisis, he's attracting new interest right at the
03:57heart of the economic establishment.
04:00From a former IMF chief economist...
04:03Marx is right on a number of dimensions.
04:08He certainly is right that income inequality can be a source of tremendous tension.
04:15To the man who saw the 2008 crisis coming...
04:19He understood that there are situations in which capitalism and globalisation can lead
04:26to economic crisis.
04:30And an economist at one of the world's leading banks.
04:33It's quite hard to convince people who live in Chelsea or Chelmsford that this is of great
04:37relevance to them, but actually it's worth a bash.
04:44Marx's key insight was that capitalism was inherently unstable.
04:49He said we'd lurch from crisis to crisis and that society would become increasingly unequal.
04:59Marx divided the world into bosses and workers.
05:03For him, they would always be at odds and that battle was a recipe for crises.
05:11To make profit, bosses squeeze what they pay workers.
05:15The crisis comes when workers then don't have enough money to buy what bosses are trying
05:21to sell them.
05:22For decades after World War II, all of that looked completely wrong.
05:27We'd had years of stable growth and workers were taking a larger share of the pie.
05:32But not anymore.
05:36Marx would explain this crisis in terms of the fact that ordinary people haven't got
05:41enough money to spend.
05:42Why haven't they got enough money to spend?
05:44Because there's been a big redistribution over the last few decades away from ordinary
05:49people towards capital, towards wealth.
05:57And for Marx, there's no turning back.
06:01Capitalism would produce bigger and bigger crises and then it would collapse.
06:11Marx had a very simple formulation about crises, which is that they are manifestations of the
06:17fundamental flaws or contradictions, as he called them, of capitalism.
06:23How would Marx have suggested solving the crisis is, of course, by abolishing capitalism.
06:31To understand the Marxist view of the mess we're in, we first have to see the world today
06:36as Marx might have seen it.
06:44Capitalism's most implacable critic was born in the picture postcard town of Trier in what
06:50is now southwest Germany.
06:52Marx comes across as a young man, as this sort of energetic, fiery, hairy figure.
07:01He was known as the wild boar or the moor, which points to his Levantine complex.
07:07He was full of ideas.
07:08He was full of debate.
07:10He liked big drinking sessions and then deep philosophical debate about the nature of Christ
07:16and German romanticism and politics.
07:20As he studied, Marx came to believe the world was sharply divided into those who own the
07:25means of production, the capitalists, and those who own nothing, the workers.
07:31The conflict between these two groups, for Marx, shapes how society works.
07:37The foundations of Marxist thinking was materialism.
07:40That when you cut away religion, ideology, politics, at its root were the material relations
07:47between man, the need for food, the need to have a roof over your head.
07:52This is what ultimately drives so much of human interaction.
07:57What was unique in Marx, he didn't see economy just as a special sphere.
08:04He saw economy as the structuring principle of the entire social totality.
08:12So that what happens in economy, the way it structures our ideologies and so on, this
08:18again is another lesson today, maybe even more pertinent than in the times of Marx.
08:30We might see a complex modern economy, which all of us have a stake in, but Marxists would
08:36say the same old rules still apply.
08:39For them, the divided society Marx saw is still broadly here today.
08:45They see workers still slaving away, and capitalists or bourgeoisie still exploiting them, always
08:53striving to make more profit.
08:57In Marx's world, any capitalist that doesn't seek maximum profit is soon replaced by one
09:02who does.
09:06Where the system follows a completely predictable course, he would say, to its own destruction.
09:13It's not an idea that many people accept.
09:17He was completely wrong, including the idea that capitalism was merely a phase and contained
09:24within it the seeds of its own destruction.
09:26That's not the case.
09:28Well everything is bound to collapse if you wait long enough.
09:31I mean the earth is going to be sucked into the sun someday.
09:35And of course what we're really talking about when we talk about capitalism is individual
09:40liberty and property rights.
09:43Could those come to an end?
09:44Well they have in places, it's possible, but I'm not seeing any signs of it.
09:50You'd be forgiven for thinking the total collapse of capitalism sounds a little implausible.
09:57How could seeking profit be so disastrous when it's done such amazing things?
10:06Just look at how we eat under capitalism.
10:11We get fresh fruit flown in from all over the world.
10:15We could choose from 700 types of breakfast cereal.
10:19We have enough of it and it's all safe to eat.
10:24This incredible plenty and the technology it depends on didn't come from the state.
10:30It's what happens when you let capitalists compete for profit.
10:35They didn't do it for our benefit.
10:37They did it because it made them rich.
10:41So at first glance, Marx's idea that capitalism's search for profit would be its downfall sounds
10:48absurd.
10:49Profit may often sound venal, it may often sound wrong, but it is what pushes progress
10:53ahead.
10:54It is actually what drives the world forward.
10:57And that's what Marx could never quite handle.
10:59The profit motive is essential.
11:01I mean, after all, what is the profit motive?
11:03It's just a way of achieving a better society by people wanting to better their own individual
11:11lot.
11:12In terms of economics, Marxism is not very much used today.
11:16And that's because he was wrong on several of the fundamentals.
11:19But if you erect a building on cracked foundations, the building itself is cracked.
11:27When you think of how fundamentally the profit motive has shaped and enriched our world,
11:32it's no wonder Marx fell out of favour.
11:34But we shouldn't dismiss Dr Marx quite yet.
11:38It's true, he talked quite a lot about class exploitation, misery, chaos, but he didn't
11:45think capitalism was all bad.
11:47Far from it.
11:52This cocktail bar in London's Soho hides a revolutionary past.
11:57It used to be the Red Lion pub, site of a clandestine meeting of communists in 1847
12:05that would echo down the ages.
12:12It was at that meeting that they commissioned Karl Marx and his sidekick Friedrich Engels
12:17to write one of the most incendiary pamphlets of all time, the Communist Manifesto.
12:23It goes through a number of drafts, Engels is the key drafter on the texts.
12:28But then Marx takes it away and in a massive essay crisis style just sits down and writes
12:36the thing.
12:37And that's the beauty of it, because it might have been organised by a committee but it's
12:42written by one man and that energy, that brio, that passion which is in the manifesto
12:47comes from the fact it has a single author in the final stages, which is Marx.
12:57You may know it for its revolutionary calls for a new age.
13:01What might surprise you is that it also contains very perceptive and admiring writing about
13:06capitalism.
13:08I think what's surprising about a lot of Marx's writing is that you find in amongst the communism
13:14a lot of good analysis of capitalism and actually you also find within it quite a lot of praise
13:21for capitalism.
13:22Marx's attitude towards capitalism is basically ambiguous.
13:26He's, at the same time, he was honest, dear Marx, ultra fascinated.
13:31He was fully aware that this is the most productive dynamic system in the history of humanity
13:38and so on.
13:39He praises it for its huge force, as far as he can see it, for progress, for tossing aside
13:45the traditions and the customs of the old world and making way for a new one.
13:51And I think it's quite interesting that the more intelligent modern Marxists feel much
13:55the same way.
13:58The truth is Marx did understand that the drive for profit would achieve incredible
14:03things.
14:07It's been the first to show what man's activity can bring about.
14:11It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts and Gothic
14:16cathedrals.
14:24He did really get the kind of global aspect.
14:26He got the idea that people were suddenly being able to get things from all the way
14:30around the world in a completely new way and the impact of that.
14:34The need of a constantly expanding market for its products chases the bourgeoisie over
14:38the entire surface of the globe.
14:41It must nestle everywhere, settle everywhere, establish connections everywhere.
14:48It creates a world after its own image.
14:51But you know, there's got to be a downside for the bourgeoisie.
14:56Modern bourgeois society is like the sorcerer who is no longer able to control the powers
15:01of the netherworld whom he has called up by his spells.
15:05What the bourgeoisie therefore produces, above all, is its own gravediggers.
15:12Its fall and the victory of the proletariat are equally inevitable.
15:17How can Marx think capitalism is so brilliant and also so doomed?
15:22Well, the answer lies in how it treats the workers.
15:34To understand Marx's analysis of crises, we have to first understand the capitalism that
15:39he knew.
15:4119th century capitalists might have built wonders surpassing Egyptian pyramids, but
15:47they also forced their workers to endure terrible conditions and pay.
15:52It is difficult to overstate the horror of industrialisation in Europe.
15:59In 1829 Liverpool, for example, a life expectancy at birth was about 28 years.
16:05And that was the lowest age since the Black Death.
16:09So the impact of the Industrial Revolution on life chances, on life expectancy in the
16:14great cities of Europe, in Hamburg, in Berlin, in Manchester, in Liverpool, in Birmingham,
16:23in London, was absolutely terrifying.
16:26This was a revolutionary epoch of change which for the working classes, which for the proletariat
16:35in the 1820s and 1830s had devastating consequences for their standards of living.
16:40Marx is certainly revered amongst historians as the preeminent analyst of mid-19th century
16:47capitalism.
16:49No one before Marx, or possibly since, has really been able to get into that system of
16:56mid-19th century Western European capitalism based on a kind of urban manufacturing set
17:05of relationships.
17:07Whether that's relevant today is a very interesting question.
17:11The horrors of Victorian working conditions clearly shaped Marx's economics.
17:18In his time minimum pay for proles meant maximum profits for bosses, and any bosses who did
17:24choose to pay more usually went bust.
17:32Subsistence wages will always be paid in the Marxian system.
17:36So now subsistence wages of course is a little bit of a flexible object, right?
17:42What we think of as subsistence wage now might not be the same as Marx thought it was in
17:46the mid-19th century, but still there's no obvious way that wages will arrive above a
17:52subsistence level.
17:54He thought there would always be downward pressure on wages and that wages would come
17:57down to the minimum that enabled bare survival.
18:00They couldn't go lower than that otherwise the workers would die, but he thought they'd
18:03be depressed down to that minimum.
18:05The reality of course has been the opposite.
18:07It has been a continual advancement in wages, year in, year out, decade in, decade out.
18:16Marx was wrong.
18:18He thought it would all get so bad the workers would overthrow the system.
18:24Yet even as he was writing, reformers were beginning to get rid of the worst employment
18:29practices.
18:32Capitalism got kinder, not nastier, but the idea that the competing interests of bosses
18:37and workers would cause crises, well that does seem relevant today.
18:45Marx wrote that the ultimate cause of all real crises always remains the poverty and
18:50restricted consumption of the masses.
18:53Put simply, if workers aren't paid enough, they don't have enough money to spend in shops
18:57and the economy doesn't stay afloat.
19:01Some believe this idea is very useful in understanding the crisis we're living through today.
19:19Let's take a look at the last 40 years of history through the prism of Marx's theories
19:25to show how they might explain the mess we're in.
19:29An imaginary Marxist broadcasting corporation would see it all as a good old 1970s style
19:35class struggle.
19:39The fight is over wages.
19:41Capitalists want to pay less, the workers want to get more.
19:47In the 70s, powerful trade unions battled to keep wages high.
19:54But then we come to the 80s, fight back time for the capitalists.
20:03Marx would have seen Margaret Thatcher and Ronald Reagan as acting purely in the interests
20:07of the capitalist bosses.
20:11It was their governments that helped business by getting rid of the obstacles that made
20:15it hard to cut wages.
20:18The violence and intimidation we have seen should never have happened.
20:23It is the work of extremists.
20:25It is the enemy within.
20:26If they do not report for work within 48 hours, they have forfeited their jobs and will be
20:32terminated.
20:36So for the Marxist broadcasting corporation, the capitalists won in the 1980s and they
20:41kept on winning.
20:43The guaranteed high wages and job security that workers had enjoyed until the 70s had
20:48gone, and downward pressure on wages started to lay the seeds of the crisis we see today.
20:57It's an appealingly simple story, but how much truth is there in it?
21:02While we know the Marxist view of history is right about one thing, at least in Britain
21:06and America, earnings at the very top have soared in the last few years and everyone
21:10else has been squeezed.
21:13In Britain, real earnings have been flat or falling for the best part of ten years, since
21:17before the crisis.
21:19In America, that's been happening since the 1970s.
21:27In the United States, a full-time male worker, median, income has stagnated for a third of
21:34a century.
21:36No increase.
21:37The increase in the income today is the same as it was 15 years ago.
21:43All the increase in the income has gone to the top.
21:46The share of income in the United States that was going to the top 1% of the households
21:5420 years ago was around 12%.
22:00Today that share is closer to 23%.
22:10Things haven't gone that far in the UK, but inequality is certainly creeping up the agenda.
22:16But rather than see it as a deliberate strategy on the part of greedy capitalists, we have
22:22to recognise there are bigger forces at work.
22:31A lot of it's down to new technology.
22:39Work previously done by hand is now done by machines.
22:46With fewer workers needed, there are more competing for every job, meaning bosses can
22:50pay them less.
22:54But perhaps the most significant factor is globalisation.
23:00With falling barriers to trade around the world, global business has gained access to
23:04a giant new pool of cheaper labour.
23:09You have brought into the market now millions and millions of new workers in China, in India,
23:17in other parts of Asia, in parts of South America, Brazil for instance.
23:22So that process has transformed the capital labour ratio on a global scale.
23:31Clearly competition from countries around the world has put pressure on certain jobs,
23:38typically jobs that can be done at a distance.
23:40So for example, an analyst can as well be sitting in the Philippines or in Mumbai to
23:50do the job that is done at a much higher price in New York.
23:58Many workers in the rich countries are now competing with an industrial reserve army
24:03running into the billions.
24:05I think in emerging market economies, there will be an overwhelming vote in favour of
24:10what has happened because almost everyone is better off than they were and would have
24:15been.
24:16But that's less evident in the industrialised world where many lower paid people have become
24:21even lower paid relative to those who have prospered and that is a concern.
24:30It's an analysis that rings true even for the leader of the world's biggest economy.
24:34Long before the recession, jobs and manufacturing began leaving our shores.
24:43Technology made businesses more efficient but also made some jobs obsolete.
24:48Folks at the top saw their incomes rise like never before.
24:52But most hardworking Americans struggled with costs that were growing, paychecks that weren't,
24:59personal debt that kept piling up.
25:01So for Marx, low wages would be the root cause of the crisis we're living through today.
25:07Even leaving aside the morality question of whether it's fair to have a highly unequal
25:15distribution of income and wealth, even purely in terms of economic efficiency, having that
25:23redistribution of income from labour and capital, from wages to profit, has a negative
25:30economic effect because it tends to reduce aggregate demand, because it reduces the income
25:35of those who tend to spend more.
25:38Of course, in the late 20th century that problem could be solved, temporarily of course.
25:44Step forward, the credit card.
25:49You had more inequality, you had more concern amongst the public, and I think that put
25:54pressure to do something.
25:56Democracies work well with pressure, put pressure for the politicians to do something for the
26:01people being left behind.
26:03The right thing to do, in my view, would have been focused much more on education, on skill
26:07building.
26:09What happened was a more shorter term solution, which was give them credit.
26:16With consumer credit, people can carry on spending even if they haven't got the money.
26:23The economy stays afloat, and the capitalists still make their profit.
26:29As we know, it went well beyond credit cards.
26:33What ultimately brought the crisis to a head was the billions borrowed on mortgages.
26:38People thought the value of their house would keep going up forever.
26:43Consumer credit is beautiful because if your house price is increasing and you're borrowing
26:48against the increase in value of your house, you don't feel you're borrowing away into
26:53debt.
26:54But, of course, you are.
26:58In America, it happened on a massive scale.
27:01There, as we know, the capitalists were getting richer and richer.
27:09They couldn't spend all of their extra money.
27:11Driven, as ever, by the desire to make more profit, they lent it out in riskier and riskier
27:18ways.
27:20The name given to this lending might well be familiar.
27:27Subprime.
27:32What we did is, as the incomes of most Americans were stagnating or even declining, we said,
27:40don't let it bother you.
27:43Keep spending as if your income was going up.
27:46They did that very well.
27:48Who would oppose it?
27:49The banks are making money?
27:51The households who are getting their house?
27:54The politicians who have happy constituents?
27:57There is no nobody who's going to be unhappy in this process until it collapses.
28:02Subprime is the end game, if you like, of the debt solution to the lack of a market.
28:12And it's the culmination of trying to evade crises which arise out of lack of effective
28:21demand in the market.
28:24And then what you do is you end up creating a credit crisis instead.
28:28So subprime is the end of that process.
28:33And we all know how it ended.
28:38In retrospect, it seems obvious.
28:40Lending to people who couldn't afford it wasn't a lasting solution to anything.
28:45It led to a housing bubble which burst, threatening some of the world's biggest banks.
28:51And thanks to our integrated world, what started in the United States spread and infected the
28:57entire system, causing a global recession.
29:07Capital, when it's faced with a problem, usually seeks to move it around.
29:13It moves it from one sector to another, or from one geographical region to another.
29:20Any part of the world that's in economic difficulties will seek to unload those difficulties on
29:24another part of the world.
29:28What will also happen is that if there's a problem in the banking system, they will seek
29:33to move it into the state system.
29:35And if there's a problem in the state system, they'll try and move it onto the taxation
29:39and austerity of the people to extract the wealth from a population.
29:46It's an extraordinary tale.
29:48And a lot of people would say it's completely wrong.
29:52Marxism doesn't actually work.
29:53But it keeps coming back because it makes for a good story.
29:57I don't think low wages played any role at all in causing the crisis.
30:00The crisis was caused by governments and central banks flooding the market with cheap credit
30:04and cheap money because politicians don't like the downturn in an economy that throws
30:09people out of work.
30:10I think it may have, to some degree, increased the level of indebtedness that people went
30:15into the crisis with, which I think intensified how deep the crisis became.
30:22But it wasn't the underlying cause.
30:23It was a contextual factor which made it a bit worse.
30:26But the idea that low wages may have contributed to the crisis is gaining ground in some surprising
30:32places.
30:35It was on this trading floor.
30:37It was probably the weekend before Lehman's went bust and it's normally a little bit noisy.
30:44But at the time it was, you could hear a pin drop, it was that deathly quiet.
30:49I could almost feel that the global system was frozen.
30:55And it was quite a scary thought.
30:56It took me back to a lot of the things that I used to read about and study when I was
31:01much younger, the days when I actually read Marx for fun.
31:05It was a comment that I posted up on a newswire and it was one of the most commented upon
31:12pieces for quite a few weeks.
31:15There are a lot of people who were quite opposed to the idea that anything that was socialistic
31:21or Marxist could be at all considered serious in the mainstream.
31:26A lot of this hate mail, I have to say, came from the United States.
31:29And I was accused of being an Obama clone.
31:32So there was a lot of negative reaction from, I think, people that probably predictably
31:39had already tied their own ideological colours to the mast.
31:43But the people who do find value in Marx aren't necessarily going to follow him all
31:47the way.
31:48I don't think anybody seriously believes that this is all about the dawn of the dictatorship
31:55of the proletariat or anything like this.
31:57I think Marx helps in framing the problem, but I think the solutions have to be different
32:03given the different environment we are in.
32:07Except Marx would insist the trap is inescapable.
32:12Workers must seek profit above all else or they'll go out of business.
32:16So why would they ever choose to give workers a bigger share of the pie?
32:21What Marx would say is that we have to look for ways out of this crisis which look beyond
32:28the restoration of capitalist class power.
32:31And I think this is a time when we actually need to start thinking about the revolutionary
32:36solution again.
32:41But who exactly is revolting against whom?
32:44Marx divided the world neatly into workers and capitalists, but today his stark distinction
32:49is incredibly blurred.
32:51Bosses work for themselves and workers own shares.
32:55In our modern world, enough of us do have a stake in the system, whether mobile phones
33:00or pension plans, to stave off talk of armed revolt.
33:05I think capitalism survives because at its core it works.
33:10It pushes progress.
33:12It pushes people forward.
33:14It appeals to a basic thing in people's lives, which is to try and get ahead, to try and
33:18improve things for their children.
33:20The fact that more people win from it than lose from it is the thing which keeps on pushing
33:25it ahead.
33:26But what about the people capitalism's failing?
33:29What does Marx have to say to them?
33:32Unfortunately for all his criticism of capitalism, he offers us next to no idea of what a fairer
33:38alternative might look like.
33:46As Marx entered his final years, he seemed quite content with the way things were.
33:52He'd been poor for a lot of his life, but by 1856 he had enough money to move to London's
33:58suburbs.
34:03The young firebrand now looked like part of the establishment.
34:08He would spend his day walking around Hampstead Heath.
34:11He would spend his day in correspondence.
34:14He would spend his day reading the Times.
34:17He would worry about personal finances.
34:19He would worry about his daughters and the expense of their piano lessons.
34:24He lived a remarkably bourgeois life in many ways.
34:30Marx didn't want to rush revolution.
34:33To understand why, we need to understand his analysis of world history.
34:41He saw the great sweep of humanity's endeavours from the caveman to the slave societies of
34:48Greece and Rome to the feudalism of kings and castles, all of which was replaced in
34:56turn by our own capitalist system of bosses and workers.
35:02Incredibly unfair, but also incredibly productive.
35:09Marx said only when we got everything we could out of capitalism could we afford to have
35:14a revolution.
35:20In his words, the knell of capitalist private property sounds.
35:25The expropriators are expropriated, all to be replaced by more or less nothing.
35:34Irritatingly, there's next to no alternative laid out.
35:39Marx, basically, was not the one who simply gave us a blueprint, you know, five stages
35:45after capitalism, communism, here you have the basic guidelines, what to do and so on.
35:50No, no, it's up to us.
35:52He just opened up the field.
35:56Is there an alternative to capitalism?
35:58I've no idea.
35:59Well, I suppose there could be all kinds of alternatives, dead silence, starvation, or
36:06the end of the world.
36:07I simply have no idea if there is an alternative.
36:09It doesn't occur to me.
36:10It doesn't seem to me to be important.
36:11It's like saying, is there an alternative to weather?
36:15I think he would have written a lot more had he lived 10 years more on what a socialist
36:22republic would look like.
36:25And who knows, but that might have saved the world a lot of bother.
36:35Without his blueprint, we all know what happened next.
36:41There weren't any revolutions in the rich, developed countries, as Marx predicted.
36:46Instead, it happened in one of the world's poorest nations.
36:53Soviet Russia may have left Marx far behind, but it was an attempt to try something else.
36:59Many have drawn lessons from its failure.
37:02The truth is, at the moment, there are different forms of capitalism.
37:06Some have slightly more social democracy.
37:08Some are closer to laissez-faire.
37:10And there's a continuum between them.
37:12But on the big argument about whether you really want to have a communist system or
37:16a capitalist one, that is pretty much won everywhere, I think.
37:21There are more humane versions of capitalism or more barbaric forms of capitalism.
37:27But I don't think there's a systemic alternative to capitalism.
37:31Will there ever be?
37:32Yes, I would think so.
37:33I mean, you know, nothing is forever, absolutely nothing.
37:37And capitalism is not forever.
37:43But anyone looking for a fairer alternative knows they can't ever repeat what happened
37:49east of the Berlin Wall.
37:51Dictatorship, political oppression and millions of ruined lives.
38:03From 1945 till 1989, this was the main remand centre for political prisoners in communist
38:10East Germany.
38:13Today it's been turned into a memorial.
38:21It's possible that places like this explain why even capitalism's toughest critics today
38:33seldom talk seriously about replacing it.
38:42You can see with all these protests in Europe, Greece and so on, I was in Spain, in Greece
38:48asking always the same question, OK, what do you want?
38:53Apart from some purely moralistic answers, I didn't get any good concrete proposals,
38:59you know, answers like, oh, money should serve people, not people serving money.
39:05My God, Hitler and everyone would have agreed with this, I'm sure.
39:09You would have thought that with this implosion of the banking system at the heart of the
39:14capitalism in the United States, with the United Kingdom and so on, there would be a
39:19huge rush to Marxism and extreme socialism.
39:26That hasn't really happened.
39:29It is quite surprising and I'm very pleased.
39:37But if memories of this place do fade, could there ever be an alternative to capitalism?
39:44Or should what happened here be a lesson for all time?
39:47I think if you remove the free market, you're removing people's ability freely to trade
39:51with each other, to acquire the things they want and sacrifice for them the things that
39:57they value less.
39:59You're removing people's ability to enrich and improve their lives.
40:02It is a perfectly natural part of the human condition.
40:06Adam Smith said the effort of every person to improve their condition, you know, he thought
40:09it was so basic.
40:10If you deny people the opportunity to do that, then you'll have to build some kind of compulsion
40:15into it.
40:16You have to make people behave in a way in which they would not spontaneously behave.
40:22If someone wants to seek an alternative to capitalism, and they're saying by seeking
40:27that alternative that capitalism is a system rather than a fact of life, and they're saying
40:35that, for instance, that human nature can be altered, fundamentally they're revealing
40:39themselves as a utopian.
40:41And the problem with utopia is that it can only ever be approached across a sea of blood,
40:46and you never arrive.
40:47This is my big mantra.
40:49When we leftists are accused of utopians, maybe, but the only real utopia is to think
40:54that with some cosmetic changes, things can go on indefinitely the way they are now.
41:01A rising star is from your slumbers, a rising criminals of wands, for reason in revolt
41:14ne'er thunders, and the glass bends the ages…
41:18Marx died in 1883.
41:21In a speech at his grave, his long-time friend and collaborator, Friedrich Engels, declared
41:26his name and work will endure through the ages.
41:29For most of the 20th century, his name did endure, though usually for all the wrong reasons.
41:40Still there are plenty of people today who still believe we should strive for an alternative
41:44to capitalism.
41:48Marx did bring together concrete economic analysis with a certain emancipatory hope.
41:56The message, it's still a beautiful one.
42:00Maybe you ordinary people have a chance.
42:03I'm not a great eulogizer, actually, of anyone, to tell you the truth.
42:07But if one were to write a tribute to him, one would go back to Marx's favorite character
42:15in Greek mythology, Prometheus, who gave the earthlings fire.
42:25And that is what Marx gave citizens all over the globe, the fire necessary to transform
42:33their lives forever.
42:44But what value does Marx have for those less inclined to revolution?
42:50Fundamentally, Marx reminds us if capitalism doesn't work for everyone, it might not work at all.
43:00There's no doubt that there have been significant changes in inequality and in the distribution
43:06of income which make you pause about the benefits of the development of output and prosperity
43:13that we've seen.
43:15I don't think you can afford to believe that the benefits of a market economy and bringing
43:21prosperity will be there unless there is a collective commitment to keep the system going.
43:25And that does require people to believe that everyone will benefit in the end.
43:30I think some of the ugliness of capitalism that he saw in the 19th century seems to be
43:38reappearing in the 20th and 21st.
43:41In a way, we have to keep our perspective on this.
43:47Health conditions are much better.
43:49Living standards are starting from a higher level.
43:53But it is still the case that things aren't the way they ought to be, and they're not
44:01moving in the way they should be.
44:03We have to find a way of creating jobs which are broad-based, which pay reasonable amounts,
44:13but at the same time without going against the basic laws of competition.
44:20Marx was right to see capitalism as inherently unstable and often unfair.
44:26Keynes and Hayek saw that too, but Marx was the first.
44:30And unlike them, he didn't think we should find a way to live with it.
44:35He said capitalism would bounce back from crises and reinvent itself, but in the end
44:40a compelling alternative would appear and capitalism would collapse.
44:46For all that rings true now in Marx, on that he seems to have been dead wrong.