“Capital In The 21st Century”–Film Review

by on May 5, 2020

Filmmaker Justin Pemberton’s cinematic adaptation of the Thomas Piketty best-seller “Capital In The 21st Century” definitely should not be dismissed as a desecration of Piketty’s seminal economic analysis.  After all, the Harvard Business Review, for one, wrote about the book in a way that ran far less than the 696 pages of Piketty’s original work.  What Pemberton has done is distill the economist’s central ideas in a way that makes its core points accessible to lay audiences.  Trivialization is not what happens to Piketty’s ideas by the film’s inclusion of animation sequences, the Lorde song “Royals,” and excerpts from Oliver Stone’s “Wall Street” and a “Family Guy” episode.  Instead, these pop culture items help  link Piketty’s analysis to uncomfortable truths about how economic inequality works in the world.

The French economist is in a good position to judge the shortcomings of capitalism.  He was 8 years old when the Berlin Wall fell.  For adults who lived through the Cold War, that notorious edifice’s fall symbolically marked the superiority of capitalism over Communism and socialism.  Piketty’s growing up in this period allowed him, this writer feels, to regard that seminal event with far fewer stars in his eyes.

What becomes clear in the history that Pemberton presents is that capitalism’s “victory” over socialism was not an economic advancement for the world as a whole.  Instead, it’s become a repeat of the same old story of the few prospering at the expense of the many.  Given current economic trends, the proverbial 1% is well on track to assume the economic role taken on by the aristocracy in the 18th and 19th centuries.

How Piketty reached this conclusion and its implications provides the meat of Pemberton’s film.  The French economist’s talking head is, as expected, seen throughout the movie.  However, contrary to some viewers’ fears, this documentary does not take the form of an illustrated lecture.  Nor does Piketty himself provide all the intellectual heavy lifting.  Other interviewees such as Columbia University professor Suresh Naidu, Stanford University Senior Fellow Francis Fukuyama, and University of Reading professor Kate Williams are also heard from.

Professor Williams, for example, offers a historical perspective on why the socioeconomic system of a couple of centuries ago was not paradise for the majority of people.  Wealth in those days was centered around land ownership and money lending.   Those who had neither and were in poverty were pretty much under an economic death sentence.  Yes, hard work and education aided daily survival.  But helping a person climb out of the low social class they were born into was something these talents alone could never accomplish.

This pronouncement will come as a shock to those whose impressions of those days are formed by Jane Austen novels or BBC costume drama adaptations.  But marriage in that time period truly was an instrument of preserving and increasing the power and accumulations of the wealthy.  Having rich Mr. Darcy eventually marry poor Elizabeth Bennet only makes for a memorable story.   In short, the novels of Jane Austen bear as much resemblance to historical truth as Netflix’s “Daredevil” bears to the realities of how lawyers strike a good work-life balance.

The acceptance of inherited wealth and venerating the desire to be part of the 1% is a tribute to the power of that elite in shaping popular thought.  Buying the allegiance of politicians through “campaign contributions,” obtaining media time to push a political agenda benefitting the elites, and even the concept of fashion are other familiar examples of the elites’ manufacturing of popular consent.

The film’s viewers may wonder what benefits accrue to the 1% through their fomenting mass racism and xenophobia.  A society of extreme economic inequality produces stresses that can be sparked into political revolution against the populace’s oppressors.  Creating scapegoats having different skin color or nationality provides political misdirection which draws public attention away from an economic system rigged to create inequality.

Yet even revolution by itself does not automatically bring about a more economically just society.  Citing the failure of the French Revolution, Pemberton’s film unromantically notes that any economic revolution needs to be accompanied by a more equitable political system and a fairer tax system to start addressing the ravages posed by economic inequality.

It may sound odd to cheer on taxes.  In America, the GOP has unfortunately been successful in popularly demonizing taxation.  Yet, as the film shows, taxation of the wealthy has been the key to curbing the power of the aristocracy and the extremely well-off.  In 1914 France, for example, the top 1% of the population owned 70% of the country’s assets while ⅔ of the population died with no assets whatsoever.

“Capitalism In The 21st Century” also makes clear that the health of Wall Street has very little to do with the health of Main Street.  History shows that the 2008 financial crash was not the first time economic mischief was caused in America by speculative inventions.  In the Roaring Twenties, unregulated bankers took advantage of popular unrealistic euphoria to sell plenty of dodgy financial instruments.  Black Monday and the subsequent Great Depression showed what happened when the economic bill came due.

The divergence between the interests of Wall Street and the interests of Main Street has gotten worse in the present day.  15% happens to be the percentage of bank loans made in the realm of manufacturing and other productive enterprises.  These enterprises incidentally create jobs.  Where do the rest of these loans actually go?  Back into the financial system for things whose sole raison d’etre is to increase capital.

In a twisted way, this emphasis on increasing capital makes sense.  The rate of return on capital is many times higher than the rate of return on the material goods that make up the economy.  Conceivably, if the entire world’s population possessed a portion of capital, then economic inequality would be seriously reduced.  The trouble is, concentrated capital ownership also creates much social power for these selfsame owners.  It’s highly unlikely such owners would ever give up that power willingly.

Recently, journalist Gerhard Schwarz of the Neue Zurcher Zeitung referred to historian Walter Schiedel’s work in discussing popular calls for remedying economic inequality.  Schiedel’s book “The Great Leveler: Violence And the History Of Inequality” argued that the historical record showed that a society’s economic inequality has never been lessened peacefully.  Supposedly, it took something like mass conflict or violent state collapse before such levelling occurred.  Schwarz’ implication was that the social cost of reducing economic inequality was not worth the human suffering allegedly required to make it happen.  Yet asking for reader complicity in accepting that the poor should suffer the slow death of poverty is an equally vile proposition.

Pemberton’s film might seem to support Schiedel’s claim.  World War II did destroy capital through the bombing of cities.  Yet it was not the destruction of war alone that brought about a lessening of economic inequality.  Other less violent actions such as creating a social safety net, nationalizing industries, and significantly taxing wealth played important roles in the reduction of that monetary imbalance.   The growth of a strong middle class meant non-wealthy people could accumulate capital too through buying a home.

So how did America and the United Kingdom, for example, go from strong welfare states to states embracing the economic rapaciousness of the 18th and 19th centuries?  Stagflation, aka simultaneous economic stagnation and inflation, didn’t help.  The new corporate management mantra of treating labor as a cost not worth investing in rather than a company resource didn’t help either.

But the key reason lay with Ronald Reagan and Margaret Thatcher convincing their respective constituents that returning to the alleged glories of 19th century rapacious capitalism was needed to reclaim their countries’ greatness.  Thanks to the respective leaders’ embrace of industry deregulation and the inequality magnification of trickle-down economics, they released capitalism from the fetters that harnessed the system to work for the public good.  The present day result has been a reduction in the real value of most peoples’ wages to what they were 60 years ago and a decrease in the 99%’s life expectancy.  A better person would look at this baleful legacy and not even consider defecating on the tombstones of Reagan and Thatcher.  Unfortunately, this writer is not a better person.

More conservative readers may try claiming this writer’s cynical attitude comes from not considering that today’s billionaires earned their fortunes through their own efforts.  But one of the film’s highlights shows just how mistaken this attitude is.

The sequence in question recounts an experiment involving the game of Monopoly.  Two players flip a coin to decide who would be the poor player and who would be the rich player.  The poor player gets only one die to move around the board and collects only $100 every time they pass Go.  The rich player gets a pair of dice and collects $200 every time they pass Go.  Needless to say, over the long run this setup ensures that one player would become incredibly rich and the other incredibly poor.

The point of the experiment lay in the behavioral changes exhibited by the wealthy players over the course of the game.  Rather than attributing their good fortune to the luck of a coin flip, they claimed their wealth resulted solely from their efforts.  The rich players also became louder, more obnoxious and more dominating towards the poor players.  Their better economic status made these rich players behave as if they were therefore better people.

Yet openly feeling a lack of obligation to use their vast wealth to benefit the public good doesn’t make rich people better people.  A news clip in the film shows Margaret Hodge, Chair of the Public Accounts Committee, interviewing Matt Brittin, Google’s VP of Sales and Operations.  Hodge’s calling out of Google’s funneling of its vast income to Google Bermuda to avoid tax liability results in Brittin responding with a very open smirk.

Adding to the viewer’s sense of frustration is learning just how effective the wealthy’s tax avoidance schemes have been.  As of 2015, the wealthy have successfully used shell companies and numbered accounts to hide from tax liability something like $15.5 billion.  The effect of these schemes has been to create a statistical fog regarding the actual owners of a particular item of wealth or real estate.

Such developments do not daunt Piketty’s optimism that runaway capital can be brought under government control.  He proposes imposing sanctions against countries happy to serve as tax havens for the wealthy.  As for problems with identifying asset ownership, focus on the location of the customers to determine where taxation should occur.  Having a progressive tax on capital and eliminating eternal ownership of a company will help level the proverbial economic playing field.

If PIketty’s proposals seem harsh, the history that Pemberton’s film recounts show the reason why such measures are necessary.  The shape of that history is that of a constant struggle between those willing to hoard most of a society’s wealth (land, capital) for themselves and the greater mass of people seeking a share of that wealth sufficient to live a fairly dignified life.  As the use of the army to put down striking miners shows, rich hoarders are quite willing to use state violence to avoid spending a single dime to better their employees’ lives.

Allowing that the market may be a vast unknowable system does not mean regulation should never be attempted.  All the rosy claims about the virtues of the unfettered market coincidentally happens to hand wave away the problems resulting from human avarice.  Ennobling personal greed as pursuing one’s self-interest does not make such avarice more worthy of worship, despite Gordon Gekko’s claims.

The film ultimately challenges its viewers to decide whether they will fight to reduce the currently unsustainable levels of economic inequality in the world or whether they will be horses.  In pre-Industrial Revolution days, horses proved key in performing many commercial functions.  But once the combustion engine and mass production took over the tasks horses once performed, the animals became superfluous to the operations of commerce.

Technology can coexist with humans as long as there are tasks that only humans can perform.  For example, truck, taxi, and delivery driving make up a significant chunk of current human employment.  Say driverless technology becomes practical.  Will only the owners of such technology reap the technology’s rewards?  Will humans who depend on driving jobs become the horses of the future?  Or can something be done to ensure unemployed human drivers replace their lost income with an economic stake in such new technology?  The future awaits humanity’s answer.

(“Capitalism In The 21st Century” is now available via the Roxie Virtual Cinema.  To buy virtual tickets, go here.)

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