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Documentary, BBC The Super-Rich and Us - 2. Episode 2
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00:00the super-rich are taking over 85 people now are the same as half the world's population
00:12you don't get this stuff that I can never before has money been so polarized people
00:22struggling to buy them all just by their rent a tweet to pay utility bills for the 21st century
00:27will be the most unequal period in human history my name is Jacques Peretti and last time I revealed
00:35how billionaires will woo to this country explain how important Britain is as a tax haven for the
00:42super-rich it's very important it's the most attractive location now on the planet but the
00:47plan to bring them here was flawed a model which is based on a top 1% generating and consuming all
00:55of the growth simply isn't sustainable this time we'll see how far from happening by chance
01:00soaring inequality was a business opportunity for the wealthy to make money out of us you would invest
01:09a lot in the super rich and you would invest also in companies that serve the super poor what you see
01:15during that period is a series of fairly intentional policies designed to guarantee that most people are
01:23in debt Britain's inequality has risen every year this century it's driving society apart and now
01:32even the super rich could be in trouble so are the pitchforks coming things keep going the way they
01:37are for sure they're gonna come this is London fashion week part of the super rich social calendar
01:54but this isn't simply an invite-only fashion event it's a glimpse into a world wouldn't exist without the
02:03new extremes of wealth address can cost a hundred thousand pounds at one of these shows that's five
02:16years worth of income for an average British household is that really right that people should be spending a
02:24hundred thousand pounds on a dress they can only charge these prices because of the soaring wealth of
02:32their customers the super rich in having their own independent state it's a bottle exclusive
02:40bubble nowhere is this exclusivity more apparent than on the polo circuit
02:49this is siren sester park in Gloucestershire you need to be a multi-millionaire to be a member of this
03:03elite you've got to have a certain amount of talent but the horses are really important part of the the
03:08job the cost of the horses they vary from you know 5,000 up to 250,000 he's a lot don't you because
03:15they get knackered yeah so today I brought six horses a full team of polo ponies can cost 10
03:28million pounds and that's before you've flown the professional riders in from Argentina it's this
03:36kind of exclusivity which reinforces the growing separation between the wealthy and the rest of us
03:41I wanted to know what the people here thought about the growing inequality in Britain this is Countess
03:50Bathurst who owns the land on which this event is taking place there's increasing concern about the
03:57polarization of wealth yeah what do you feel about this I think that human nature by human nature will
04:07always be a little envious of those who have more than they do and I think that there is an element
04:15of envy and I think that there's also an element of shall we say not realizing what it means to be
04:23somebody like us you know we do work incredibly hard I think that people don't realize what a
04:30responsibility it is they don't realize sometimes what a worry it can be the people on this March also
04:40have worries they're worrying about how to pay their bills the phrase that comes up again and again when
04:48you talk to people here is the one percent what is the one percent done to the rest of Britain in terms
04:54of their wealth escalated and the lives and living conditions of everyone else stagnating
05:01I'm going backwards very quickly back to Victorian times and I think really you know before a lot of
05:09people are incensed but they'd be more incensed still if they realize that this inequality wasn't an
05:22accident the inequality that's made so many people angry didn't happen by chance it was a plan the growing
05:34of the prosperity of the super rich is directly linked to the austerity we've been suffering for
05:41the last five years the plan began ten years ago here in New York what was then the biggest bank in the
05:51world Citigroup years before we all started to become concerns and critical of growing inequality the
06:00people in this building had worked out how to turn it into a business opportunity it was set
06:07out in this document for investors Tobias Levkovic was a key strategist at the bank could you tell me what
06:17the report said well basically suggested that wealth was concentrated amongst upper-income Americans
06:22and particularly the top one percent and if you really want to get technical the top point of one
06:27percent there's always been the haves and the have-nots but today you have the haves that have
06:31not and they have yachts the report told investors that massive inequality was the cash cow of the 21st
06:39century at the top end they were to put their money into industries that served the new global elite
06:45like jewelry and yachts it was unapologetic economic opportunism right at the beginning it says this
06:54imbalance in inequality we're talking about what's coming expresses itself to the public in the standard scary global
07:01imbalances you know basically inequality it says we worry less if you're telling people in 2005 this trend is going
07:08to be continuing and we worry less about social unrest or we worry about backlash issues here you can buy these
07:15things and be pretty good shape for the next five to ten years investors come like those kind of long calls you can put it away
07:22sleep at night and know that at the end of it you'll have money selling to the super rich was no surprise
07:28but their analysis went on to deliver a more shocking revelation Citigroup realized that there was a huge
07:35opportunity at the bottom of society a chance to make billions from poor people
07:43financial analyst Christia Freeland has followed the strategy closely what these Citigroup analysts observed
07:51was that the economy was dividing into two sectors and their investing thesis was in the part of the
07:59economy that this one percent was active in you were going to see tremendous growth and you would also
08:05see growth in the part of the economy that caters to poor people because basically they saw society being
08:11divided into the one percent and everybody else and so on this investing thesis you would invest a lot in any sectors of the economy that serve the super rich
08:21rich in luxury goods companies and super high-end real estate that kind of thing and you would invest also in companies that serve the super poor so maybe in a walmart
08:30in this new world there was someone left out of the equation the middle class would be broke you had a theory which was called the hourglass theory could you tell me what that theory is the middle class would get squeezed the most in other words the lower end of the
08:51income spectrum of the income spectrum would still get opportunities on the other side you would have the wealthier ones continue to invest and be able to take advantage of opportunities because they had the capital to risk
09:00because they had the capital to risk do you not feel though to bias any kind of responsibility or guilt for the fact that you identified not just rich people but poor people to make money out of inequality and then gave that advice to your clients
09:10you can't sit there and say well you know this may not meet everybody's social happiness criteria but i have to deliver results so they're going to take that money and give it to somebody else to deliver results so it's not cynical it's very practical that is our job we're supposed to try to help them make money
09:31the most extraordinary thing about the city group report is just how accurate it proved to be ten years later the hourglass society is here this is one of the best cities in the world to see it in action london
09:53this is mount street in mayfair the most exclusive high street in the country and at the christmas party they're celebrating a bumper year
10:05you're like the modern family butcher aren't you like the old family butcher would be on a high street and you're like you're on a high street but you're like russian oligarchs
10:13you know we we do the stats every year we look for the rich list and we do i think last year we did um 50 percent of the top 100 of the rich list really it's insane wow
10:25it's absolutely insane you know kensington palace gardens which is the most expensive street in the world
10:30residential street in the world would supply half the houses down there
10:36and the next stop a cigar shop where rich clients are allowed to sample the wares inside
10:43a lot of people especially at the high end of the sort of luxury goods market have said things have
10:47actually really really picked up we've got some very select customers from all over the world from the
10:53americas from russia from china they haven't really been affected so gentlemen when you're not smoking
11:00cigars what do you do commodity trading and mining and the brandy business what about you my friend
11:06i own a telecoms company you're the telecoms company yes
11:20just three miles away from the exclusivity of mount street is the other end of the hourglass this is brixton
11:26the last 10 years have been a bonanza for industries that target the poor gambling discounters and payday
11:37loans money borrowed to make ends meet deborah hargreaves from the high pay center has examined how the
11:46hourglass has changed our landscape the vast majority of people haven't had a pay rise for 10 years so their
11:53pay has not kept up with inflation and we've channeled all the rewards to those at the very top
11:59and this has given us a whole range of different industries associated with almost with poverty really
12:08but to find out how this unequal society was created you need to go back to the 1970s
12:14it was the high watermark of economic equality the most egalitarian decade in history
12:26the wealthiest one percent earned less than six percent of the national income its lowest recorded level
12:32bankers pay was on a par with teachers and gps aspiration was shared across society
12:49utopianism was in the air citizen smith believed revolution was just around the corner
12:55you the survivors of the two in popular front shall inherit my fiery legacy you will be lifted into the
13:03hearts of the proletariat hey theirs will be the airy excesses of power
13:12but there wasn't a utopia just around the corner cracks in society were already showing
13:20the 1970s brought us strikes and inflation
13:29it began with the oil crisis in 1973 as energy prices rose britain endured blackouts in the three-day
13:36week the night before last i spent the evening with candles and a lovely fire and really it's the sort
13:42of evening that i'd like to spend more often i should do it even when we have electricity back
13:46the post-war boom was over rural capitalism was on its way back and it was to start with the asset
13:53strippers dismantling companies for profit men like sir james goldsmith
13:58my impression for james that you've made your reputation as a buyer and seller of companies
14:01that is your ambition not only is in the food industry no one not even you not even our worst enemies
14:06could suggest we're unsuccessful
14:08what had been a stable and egalitarian society at the start of the decade was unravelling fast
14:18the post-war certainties of full employment and rising prosperity were gone this insecurity
14:24was about to be harnessed into a new ideology
14:27new york the money capital of the planet in the 1970s a new kind of capitalism was about to emerge
14:42here one which would exploit this volatile world it was formulated by two economists fisher black and myron
14:53shoals it was known as the black shoals equation
15:07not many things that we say change the world actually do change the world but this formula did
15:13it created that over there that city created the financial world that we live in today
15:25what the black shoals equation did was to give traders a formula for predicting what a stock
15:30would be worth in the future it was gambling with a system
15:38but to win big you needed to bet big
15:43they said that you need not to be afraid of risk but to embrace it and they said the more you risk
15:51the more you win the equation gave wall street a new model for trading
15:57with this information traders could bet billions of dollars on what were called options
16:03the right to buy an item in the future these are very brilliant mathematicians as professors who were
16:10able to build this structure it assumes certain things about the cost of capital the changes in
16:16price of the product that you've optioned to buy within a few years new financial markets for options and
16:24derivatives boomed powered by the algebra of black and shoals today the market for derivatives alone is worth
16:32one quadrillion dollars equivalent to 10 times the value of all the goods produced across the planet
16:41higher the risk the higher reward but you have to be able to take the risk you have to be able to
16:45take the chance that you might lose the money getting to greater and greater wealth you have the ability to take on more risk
16:52the black shoals equation had triggered an economic revolution and it was all based on the idea
16:59that risk was good but black and shoals was only the beginning risk was about to be rolled out
17:08beyond the financial markets and into our lives affecting the future of everyone in the world
17:14it was down to one man rooted in the wall street of his time i was the guy that drank hard and smoked hard
17:25and did everything hard you know robert dahl was a trader at salomon brothers one of the largest brokers in
17:33new york he was an expert in the mortgage market which in the 1970s was expanding hugely the politicians in
17:41this country at this time were screaming to everybody a house for every american it's not true it's not
17:51white but it was a great thing for politicians to say traders were looking for a way to exploit the
18:00burgeoning market and mortgages were attractive to them because they brought in a regular monthly payment
18:06in 1977 dahl had the idea to bundle a hundred million dollars worth of these mortgages together
18:18to make a huge income stream which could be traded on the market
18:26when you bundled it all up it suddenly has huge potential at the time it was it was
18:33pretty pretty much beyond comprehension that it grew so fast the the rate of growth
18:42was pretty incredible they were known as securities and what dahl had invented was something called
18:49securitization i actually have had people come up to me in restaurants and things like that and say
18:57thank you for the idea robert dahl's invention was to have profound consequences that would affect
19:06all our lives the black and shoals formula and securitization were the building blocks of a new world
19:14one in which taking risks drove profit but what few of us realized was that the risks being taken
19:22but with our debts by the mid-80s britain was ready to join the party american banks arrived in london
19:39bringing the mantra that had transformed wall street risk was good
19:43i spent my cash on looking flashing grabbing your attention the rules of wall street apply in london
19:51if you're good you get very very high rewards if you're not get on your bike
20:01in 1986 the city was transformed by the big bang which deregulated its activities
20:06nicola horlick was one of the new breed of city superstars earning a million pounds a year
20:16big bang was very very significant but it was significant in the sense that it moved everything
20:21away from being partnerships and family enterprises to being huge you book the client i will sell you
20:29half a million at six seven three small firms built on trust and tradition gave way to international
20:36banking groups ruthlessly using risk to maximize profits things changed and all these clever people
20:44started going and working at banks and doing rinky dink wild things the multiples changed and started
20:50to zoom up and suddenly everybody wanted to be in banks they were suddenly the best thing since
20:53sliced bread and they were you know on 18 times earnings not three times earnings just as in america
21:00securitization was a big part of the new financial machine what that machine needed were debts and we
21:08were about to oblige the british were about to get hooked on debt
21:20to afford the 80s lifestyle you needed credit cards and newly available bank loans
21:25the way you made people feel better is allowing them to borrow a lot of money take on consumer debt
21:32and that worked for a while and i think that was part of the reason why people felt so good
21:39britain was experiencing the illusion of unprecedented prosperity and we paid a price
21:45household debt was running at nearly 350 billion pounds by the late 80s
21:55david graeber is an economist at the london school of economics takes a critical view of our growing
22:00debt during the 80s what you see during that period is a series of fairly intentional government
22:09policies which are designed to guarantee that most people are in debt if you're if you have a mortgage
22:17you can't go on strike so it was quite intentional policy get people in debt it'll reduce the amount of
22:23industrial action it'll hold down wages it'll control inflation how important is debt to the extraction
22:29of wealth from us the 99 percent to the one percent i think it's the key to the whole thing the finance
22:35industry and the debt industry are really the same thing to a large degree finance just means other
22:39people's debts they're trading our debts with each other the growing addiction of consumers to debt
22:48helped fund the growing wealth of the financial centers of london and new york
22:53and a new attitude appeared to celebrate this the evolution in corporate america seems to be
23:00survival of the unfittest well in my book you either do it right or you get eliminated
23:08in oliver stone's wall street these aren't economic choices but a darwinist imperative
23:14the point is ladies and gentlemen that greed for lack of a better word is good greed is right greed works
23:26greed clarifies cuts through and captures the essence of the evolutionary spirit
23:35wall street introduced us to a new species an alpha elite who are going to change our lives
23:41they were called the masters of the universe and they were coming here to britain
23:49these were the superstars of the business world the ceos
23:57parachuted in to cut costs and paid handsomely for doing it richard giordano was the first
24:05throughout the 1980s he was the boss of boc one of britain's largest companies
24:11i came to work at a pay level that was equal to what i was earning in the united states might have been
24:17the equivalent of 250 000 pounds per annum that was a an enormously large sum in the landscape of that
24:28time you were referred to as britain's highest paid businessman that was probably true at the time
24:33although i was soon eclipsed by many others and do you think that um the amount of money you were
24:39being paid was seen as very un-british in a way i think it was regarded as coming from another planet
24:46this was a business revolution wasn't it it was a revolution um that um enshrined the idea of of
24:54business success entrepreneurship which had not been true in the 1970s
25:01in other words it was thought wonderful to be an entrepreneur wonderful to be successful
25:07i guess wonderful to make more money um and that that was something that um i think was a big change
25:15in the 1980s we faced a ruthless business culture the winners were the top one percent who saw their
25:23incomes rise steeply but what about the rest of us we were about to undergo our own workplace revolution
25:31and once again it came from america
25:37it was driven by the thinking of these two men tom peters and robert waterman
25:42analysts whose book in search of excellence from 1982 extolled a stripped-down workplace in which
25:48only the fittest would survive
25:53nichil seval is a historian who studied how this new theory of management was designed to create
25:59fierce competition for jobs the move was to make people put them on their toes in a way that was the
26:06idea and so there was an atmosphere and a mood in which precariousness was seen as the path to
26:12prosperity this new cutthroat workplace was satirized in the 80s film working girl
26:21one of the early scenes you see melanie griffith the main actress showing up at her new job with a box of
26:27her stuff
26:28griffith's character even has the book by peters and waterman in her box when she arrives at the office
26:40you know that she's somehow going to succeed in this new workplace despite all the obstacles
26:44because she knows she knows the model she knows the business she knows she knows how to act
26:49it the fictional working girl faced a new kind of insecurity that was about to confront us all
26:57work was being destabilized
27:01by the time of the second recession at the end of the 1980s
27:05an even harsher economic reality was emerging
27:10yes who's gonna buy a rusty girder come on and it was a change reflected in films like the full monty
27:18yes hang on
27:21ten years we worked in here now look anyone not part of the one percent was expendable
27:28even middle management were out in the cold
27:30but nick you lot some of us are trying to get a job hey and it says no smoking in here
27:36oh and it says job club up there i remember the last time you saw one of them walking
27:41you forget gerald you're not our foreman anymore
27:44you're just like the rest of us scrap shut it right
27:55by the mid-1990s britain was a changed society
28:00the top one percent now earned a tenth of national income nearly double its level in the 1970s
28:09bankers were no longer paid the same as gps or teachers a two-tier society was just beginning to
28:16take off right across the developed world the old paternalistic company with a duty to its workers
28:23was disappearing you invested in a business and this business is dead let's have the intelligence
28:31let's have the decency to sign the death certificate collect the insurance and invest in something
28:37with a future ah but we can't we can't because we have a responsibility a responsibility to our
28:46employees to our community i got two words for that who cares
28:53in the 90s film other people's money the would-be boss takes for granted that the company is just
28:59there to be bled for profit i'm not your best friend i'm your only friend
29:09i don't make anything i'm making you money unless we forget that's the only reason any of you became
29:16stockholders in the first place you want to make money
29:23in 1994 cedric brown the boss of the recently privatized british gas became briefly public enemy
29:30number one his salary more than doubled overnight to 475 000 pounds the country was outraged driven by
29:43the then leader of the opposition yesterday the president of the board of trade justified the
29:49grotesque increase of 200 000 pounds to the chief of british gas so you do have a responsibility just to
29:55sort of explain to us why you're worth 25 times what your staff are ceos were reported to have their
30:03snouts in the trough and government needed to be seen to be doing something sir richard greenberry the
30:11head of marks and spencer was given the job of heading a committee to look into executive salaries
30:16a committee of 11 of whom eight were chairman or chief executives
30:21do you think it was okay what he was getting well we yes of course it was um but we had to come up with
30:29a uh a formula of best practice what best practice meant was creating a new publicly acceptable formula
30:38for executive pay and greenberry was adamant that his committee of ceos was up to the job
30:45nobody was earning um more than about five six seven hundred thousand pound a year i don't think
30:54anybody could have fairly described as um as being biased
31:03five hundred thousand pounds a year was 30 times the average salary in britain at the time
31:09greenberry's committee said the solution to big rewards for executives
31:13was to tie bonuses to performance and shares it was a fateful decision executive pay soared
31:22the proof of the pudding is in the eating and between 95 and 2010 the whole issue of wages and salaries
31:32went went off the richter scale
31:35and that's what's going to happen if you're a chief executive of a big company your remuneration will be
31:42tied to the share price of your company so you will have a very strong interest in getting that share
31:49price up and one of the ways to do that of course is to cut costs and one of the biggest costs is wage
31:55costs so you know you could have a direct interest in holding wages down
31:59the report did the complete opposite of what was intended while the lid was kept on our wages
32:08in the 15 years following greenbury executive pay quadrupled
32:18but what do chief executives themselves think about this
32:20so martin sorrell was one of the ceo titans who came to the fore in the 1990s as the chief executive
32:29of the world's biggest advertising group wpp he's now one of britain's highest paid executives
32:35on 29.8 million pounds last year the majority is part of a long-term incentive scheme
32:42martin do you think your wealth separates you from ordinary people
32:45well when you say my wealth my wealth is tied up all my net worth bar a little bit is tied up in
32:54the success of wpp how much are you worth well according to the we look at the sunday times
33:01rich list i think puts it around 250 million pounds there's no doubt that the debate around
33:08the pay to ceos pay however you term it is is the issue of the time you you yourself are paid
33:14seven hundred and eighty times your average employer seven hundred and eighty times that's
33:18not true actually that's not true now is it significantly greater than the average the answer
33:23is yes do you think that that's right but but but but again again to be paid again but again you're
33:28looking at the compensation a large a large it's a handy get out no no no there's not a handy
33:34get out well it is do you think people then are right to be upset about ceo pay
33:38well it depends it depends on whether it's paid for performance or not
33:41if it's if it's pay just for being there uh and then you know i'm failing i would agree with you
33:49as long as it's based on success and it is paid for performance i don't see anything wrong in that
33:54by the 2000s our society was unrecognizable from the relatively equal one of the 1970s
34:01securities had been sold on solid mortgages but by the early 2000s
34:31the debt machine required bundling safe mortgages with risky ones
34:39the problem was those people did not know that those mortgages were different
34:48they didn't understand that there are certain mortgages that are real mortgages there are others
34:58that are phony after the millennium millions of ordinary mortgages were bundled with those that
35:06would never be paid back they were called subprime it was the fatal outcome of robert dahl's invention
35:14the logic of what you created would lead inevitably to subprime to bundled loans to an inability for the
35:22financial system to deal with this level of debt you yourself didn't bring about the crash but you
35:27created the the mechanics for it to happen now that's true that i that i am the first to admit
35:34though in 2007 the subprime homeowners in america defaulted on their loans the whole edifice began to
35:42collapse first in america then in the uk thousands of customers have been queuing up
35:49outside branches of the troubled mortgage lender northern rock nobody's given an absolute guarantee
35:54that the money is safe in this bank share prices have continued to tumble around the world following
36:01the collapse of lehman brothers the system built on risk had come crashing down the markets had failed
36:09and the state needed to step in to bail out the banks every country in the world
36:13the world around the globe are facing the same problems at the same time what had seemed like
36:20science was now in tatters it's very difficult all the markets are all over the place nobody knows
36:29exactly what they're doing so um it's a bit panicky
36:35the government eventually spent 375 billion pounds to prop up the banking system
36:41the same money given to british households would have meant a check for 24 000 pounds on every doorstep
36:50but it didn't happen instead of putting money in our pockets to fuel a consumer recovery
36:56the profit from the bailout went to the super rich
37:00this is an auction of classic cars an occasion for the wealthy to splash out on luxury assets
37:12quick straight in at lower estimate at 90 000 pounds
37:20one million five hundred and fifty thousand yes
37:26the classic car market is booming thanks to taxpayer money
37:30the hammers up for one million six hundred and fifty thousand pounds all done
37:37congratulations so why did the bailout help these people more than the rest of us
37:47the answer is embarrassingly simple the public money used to bail out the banks actually fueled a boom for
37:53those with financial assets and who would they be yup the super rich classic car market has exploded in the
38:03the last five years really since central banks have been printing money it's really as a consequence
38:09of the financial crisis of the credit crunch that our market has done so well i thought they printed
38:14money to help everyone try and get back on their feet but it seems that the printing of money has
38:19actually really exacerbated the divide in britain that actually the money is poured into the super rich
38:25market and that's really where it's gone because that's exploded hasn't that there is certainly
38:29uh some truth to the statement that the rich have become richer the irony is that 95 percent of the
38:36gains from the bailout ended up with the super rich taking them even further away from the rest of us
38:47among the celebrity quota chris evans with big money for a 1971 ferrari
38:59congratulations the bailout created this cars being sold for 1.9 million pounds to a room full of super rich
39:17so the crash worked for the super rich while the vast majority are still struggling to make ends meet
39:23the very wealthy have come out of the global downturn not just unscathed but smiling
39:30i have a thing for portraiture um i found it far more interesting than seascapes or landscapes
39:35david le pan is a multi-millionaire who analyzes the luxury spending patterns of the global elite
39:42i'm told that this is only the third building in london that has two full-length van dyke portraits on the
39:48same wall van dyke um yes are you serious yes absolutely old masters are are underappreciated
39:55which uh my mind makes them a great uh a great investment
40:01david holds to the established super rich view that their wealth benefits us all
40:07we've gone about creating wealth right within our society wealth has been attributed to shares
40:13to products to art for example right this is not money that's been taken from somebody else
40:20so our economies are growing it's you know wealth is not finite there is more and more of it
40:30this is wakefield while the super rich have seen their share of wealth increase since the crash
40:36in places like this there have been six years of stagnation with living standards still below pre-crisis
40:44levels i've come to meet louie kasatkin who used to have a full-time job at a distribution center
40:56hi good to see you
40:58so what did the crash do to your life um it was just it was just like a earthquake it just like
41:09opened up this great hole and everything fell in louie has been trying to find a full-time job
41:16but the little work he gets a zero hours contract with no guaranteed income so how does it work you
41:22sign up with an agency that's right yeah you get a text on a morning saying this is to confirm that
41:29you will be working tonight or this is to confirm this is to let you know that due to low they always
41:35say low business volumes uh your shift has been cancelled and louie that sounds very hand-to-mouth
41:40it sounds very precarious your existence hand-to-mouth would actually be an improvement on my current
41:45circumstances i mean it is brutal is there any money left at the end of the week
41:51no not really these zero hours agencies that you talk about this seems like a incredible growth
41:58industry well it is it's like cancer it's like it starts off as one little dark spot and next thing
42:04you know you've tumors all over the place since the crisis the job insecurity prefigured by peters and
42:12waterman in the 1980s has become a reality it's early morning in the heart of the city of london and it's
42:19freezing and i'm standing here with some men who are sitting on a wall and hoping that a van will
42:28drive by and offer them some work in construction
42:36the government parades improving job statistics in reality two-thirds of the new jobs created since the
42:43crash are self-employed meaning that pay levels stay low
42:51wherever they get is what they'll take because they've got nothing obviously they can't sign on
42:56or anything so whatever they get they'll take if they give them 30 40 a day they'll probably take it
43:00we go in there now and we could be sent home and that's it finished we've got to go somewhere else and
43:05look elsewhere so that we've got no no rights at all
43:16since the crash inequality has worked for the rich and produced more insecurity for the rest of us
43:24britain is becoming a nation of freelancers there's nearly two million of us and the epitome of this new
43:30world is micro jobbing finding websites that offer jobs for a day or even just an hour and with as little
43:37as five pounds at the end of it you bid for the privilege of the odd job but without any guarantee
43:43of security or hours this is a new and highly precarious world
43:50these websites link skilled people graphic designers animators writers with any job that needs doing at a
43:57price that has no lower limit there's a couple of different ways you can actually hire a freelancer
44:02but the most common way is you post a job it's free to post zenios lazivulu is the founder of the
44:09website people per hour which has nearly 300 000 active users signed up so basically this is how the
44:17site works you start very quickly by saying what do you need to do typically within minutes you'll start
44:23getting the first proposals this is an alley that's sold 204 times it's an amazing impersonation look
44:30at this hi thanks for stopping by as you can see i look and sound a lot like mr t if you would like a
44:37personalized message he launched the site in 2007 and has become a cheerleader for this entirely new way of working
44:45employment as we know it traditionally has made people unfortunately quite lazy in many ways you
44:53know you have stable income and you have a pension and so on and so forth you don't have to fight for
44:58anything in my dad's generation people were in lifetime employment they were miserable the world we're
45:04moving towards which i think is a better world keeps people on their toes accountable they need to fight
45:11for it and the ones that do um are essentially much better off than they were before a lot of american
45:18billionaires and economists have said there should be no lower limit we shouldn't be thinking about
45:24minimum wages i would support that personally people just are not incentivized to go and find a job
45:31because they're just living an okay life on unemployment benefits what you're talking about is darwinism
45:39you're just talking about survival of the fittest and no safety net for the people who can't be
45:44entrepreneurs and go-getting actually darwinianism is that survival the most adaptable and i think
45:48that is the key here we're moving you know to to a different kind of world where the ones that do
45:54really really well are more more adaptable are fighters and the upside is definitely worth it
46:00what xenios seems to be saying is that we live and work in a world of survival of the fittest no minimum
46:09wage no safety net this is what it should be i want to see how i would get on in this new insecure world
46:20how much can i earn in a day
46:25hey come madam hey cut sir hey cut sir hey cut sir hey cut madam look interesting to you
46:37hey cut sir hey come with them
46:42how much are you getting for this how much are you getting five can you get by with what you're
46:51earning um not really hey cut sir there are nearly two million freelance workers in britain not all like
47:01this but at the most insecure end they share a sense of desperation oh please god please someone take one
47:12thank you very much thank you cheers thank you so much i appreciate that
47:23i've done two hours work and earned 20 pounds not bad but they only want somebody for the lunchtime rush
47:31it takes time to find work when i spot a job it's not exactly merchant banking
47:42what do you think do you think a fiver for that five yeah cheers there you go thanks very much yes yeah
47:51there's still a few hours left in the day next gardening i've agreed 15 pounds for a big clear-up
47:58okay no problem i think i'm done so at the end of the day i have made 45 pounds 45 quid and
48:20i'm i'm knackered i've had enough i want to go home people do this every single day with these micro
48:29jobs there's no no guarantee of work there's no guarantee that i could make that tomorrow i can
48:35make nothing tomorrow i sit there all day waiting for a job to come through be lucky to make 20 quid
48:40it's so precarious it's frightening over the last five years the insecure nature of our lives and the
48:50growing inequality it's created have become the subject of intense debate
48:58in paris one of the world's most influential economists thomas piketty believes inequality is
49:04not a problem in itself up to a point it can actually be useful for incentives for growth but
49:15when inequality gets too extreme what historical evidence suggests is that this is not useful anymore
49:22for growth piketty thinks the extreme wealth of the super rich will profoundly alter our future
49:28we can say is that the share of national wealth going to the top is of the order of 60 to 70 percent
49:38the bottom half in society has very little net wealth you know less than five percent the very
49:44fact that we don't know how far this can go is in itself a problem you know if we don't
49:51uh do coordination in favor of fiscal transparency and fiscal justice i think the long run looks looks a bit frightening
50:09the growing sense of injustice is being felt by more and more of us
50:16and with no end in sight to rampant inequality
50:21tension within the 99 percent is rising this is a peaceful cavern it is the city of london that is
50:29violent it is capitalism that is violent many believe that the seeds of future violence are being sown
50:41this is the historian yuval harari he believes our attitudes to inequality have fundamentally changed
50:48the middle ages as far as we know inequality did not cause people to be very dissatisfied with their
50:55condition you're brought up from birth expecting the world to be unequal because you knew from birth
51:02i'm a present he's a king that's the way the world works now but when you live in a modern capitalist
51:09culture which encourages everybody all the time to want more and to believe that you can be as good as
51:16everybody else then inequality becomes a much bigger problem because then you always look at what other
51:24people have and you want that and this is a great cause for dissatisfaction
51:32in america a country with higher inequality even than britain these concerns are being taken very
51:39seriously since occupy wall street in 2011 inequality has become a call to action
51:50and the super rich are the focus of anger the police are actually protecting the wrong people
51:58they're arresting the wrong people they're all wrong what is clear is that some of the 99
52:04believe that it's time to confront inequality there is now a political tide for change powerful americans
52:13from president obama downwards are talking about the threat to society if they do not address what he
52:19calls the great divergence that is a dangerous and growing inequality and lack of upward mobility
52:27that has jeopardized middle class america's basic bargain that if you work hard you have a chance to get ahead
52:37i believe this is the defining challenge of our time
52:41and even the super rich themselves are taking it seriously
52:45you show me a highly unequal society i will show you either a revolution or a police state
52:56nick hanauer was one of the first investors in amazon and sold his company to microsoft for six billion
53:06somebody like me earns 10 20 000 an hour
53:11you know that creates a very different life from the life that ordinary people have to live
53:20and that gap isn't just an economic gap it's a social gap and and that gap i think is very very
53:27coercive because it decreases the amount of empathy that people at the top have for everyone else
53:35a sentiment that was echoed at a fair pay demo in boston last year
53:41the pay protesters have formed a national movement in the u.s in city after city demonstrations have
53:49sprung up attacking inequality i think we have to flip around the idea we generate the money for them
53:58they don't give us jobs we're generating the richness of the wealthy people
54:02the norm in this country today is for ceos to make massive amounts of money in an immoral level
54:14and we need to bring money back to the workers
54:20we're not going to get the one percent to change their mind we're going to get the 99 to realize
54:24that if they all stand up collectively this is over with tomorrow
54:28history shows that you make a society unequal enough um it is it is going to turn bad for
54:39everybody particularly people like me
54:47so are the pitchforks coming well maybe not tomorrow but if things keep going the way they are for sure
54:54they're going to come and these predictions are as true for the uk as they are for america
55:04the cracks are already showing in our own hourglass society
55:09when rioting broke out four years ago across the uk for some it was an illegal shopping trip
55:14but for others it was about inequality and injustice
55:30and the establishment are taking note
55:36remarkably riots have been predicted in a strategic report written by a secretive think tank
55:41at the ministry of defense it stated that inequality could lead to violence if the excluded
55:50began to take the law into their own hands
55:55rear admiral chris parry commissioned the report
55:58i think in modern complex societies if you don't address the issues of economic inequality and social
56:04cohesion you are going to get unrest you're going to get people who reject the capitalist system
56:09they reject the market they'll reject democracy they'll take action outside our democratic institutions
56:15and we won't like that this is not a politician talking but a high-ranking member of the armed
56:21services his warning is stark the potential danger is clear and present i think there comes a point
56:28where people say look you know i don't have enough out of this society i don't have a stake in this
56:33society and suddenly they burst out a fact not lost on those who might be in the firing line
56:44they will conclude that we are not playing a fair game that we are not playing a game at all
56:49we're engaging in an activity where i get everything and they get nothing and if it's just a game
56:56they will simply cease to play if it's an economy they're likely eventually to get really angry and
57:04come and kill me and take all my stuff because that will be their only option at that point and and
57:10this is just obvious
57:1640 years of widening inequality has left britain with a fractured society
57:22the richest one percent now earned 14 of our total national income a figure which has nearly tripled
57:29in the last 40 years and the rest of society have become a business opportunity for the very few
57:40this is the shard the tallest building in europe and a fitting metaphor for inequality in society
57:48the one percent are on the top floor and the rest of us live down here
57:55britain is being transformed by a polarization of wealth unlike any seen before
58:01the super-rich can seal themselves off from this inequality but only for so long
58:06when it becomes unsustainable the view from the top floor could suddenly be very different
58:17so
58:33so
58:41you
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