[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.00,0:00:05.00,Default,,0000,0000,0000,,So here's the most important economic fact of our time.
Dialogue: 0,0:00:05.00,0:00:09.00,Default,,0000,0000,0000,,We are living in an age of surging income inequality,
Dialogue: 0,0:00:09.00,0:00:12.00,Default,,0000,0000,0000,,particularly between those at the very top
Dialogue: 0,0:00:12.00,0:00:14.00,Default,,0000,0000,0000,,and everyone else.
Dialogue: 0,0:00:14.00,0:00:18.00,Default,,0000,0000,0000,,This shift is the most striking in the U.S. and in the U.K.,
Dialogue: 0,0:00:18.00,0:00:21.00,Default,,0000,0000,0000,,but it's a global phenomenon.
Dialogue: 0,0:00:21.00,0:00:23.00,Default,,0000,0000,0000,,It's happening in communist China,
Dialogue: 0,0:00:23.00,0:00:25.00,Default,,0000,0000,0000,,in formerly communist Russia,
Dialogue: 0,0:00:25.00,0:00:28.00,Default,,0000,0000,0000,,it's happening in India, in my own native Canada.
Dialogue: 0,0:00:28.00,0:00:30.00,Default,,0000,0000,0000,,We're even seeing it in cosy social democracies
Dialogue: 0,0:00:30.00,0:00:34.00,Default,,0000,0000,0000,,like Sweden, Finland, and Germany.
Dialogue: 0,0:00:34.00,0:00:38.00,Default,,0000,0000,0000,,Let me give you a few numbers to place what's happening.
Dialogue: 0,0:00:38.00,0:00:41.00,Default,,0000,0000,0000,,In the 1970s, the one percent
Dialogue: 0,0:00:41.00,0:00:45.00,Default,,0000,0000,0000,,accounted for about 10 percent of the national income
Dialogue: 0,0:00:45.00,0:00:47.00,Default,,0000,0000,0000,,in the United States.
Dialogue: 0,0:00:47.00,0:00:50.00,Default,,0000,0000,0000,,Today, their share has more than doubled
Dialogue: 0,0:00:50.00,0:00:53.00,Default,,0000,0000,0000,,to above 20 percent.
Dialogue: 0,0:00:53.00,0:00:55.00,Default,,0000,0000,0000,,But what's even more striking
Dialogue: 0,0:00:55.00,0:00:57.00,Default,,0000,0000,0000,,is what's happening at the very tippy top
Dialogue: 0,0:00:57.00,0:01:00.00,Default,,0000,0000,0000,,of the income distribution.
Dialogue: 0,0:01:00.00,0:01:02.00,Default,,0000,0000,0000,,The 0.1 percent in the U.S.
Dialogue: 0,0:01:02.00,0:01:06.00,Default,,0000,0000,0000,,today account for more than eight percent
Dialogue: 0,0:01:06.00,0:01:08.00,Default,,0000,0000,0000,,of the national income.
Dialogue: 0,0:01:08.00,0:01:12.00,Default,,0000,0000,0000,,They are where the one percent was 30 years ago.
Dialogue: 0,0:01:12.00,0:01:15.00,Default,,0000,0000,0000,,Let me give you another number to put that in perspective,
Dialogue: 0,0:01:15.00,0:01:18.00,Default,,0000,0000,0000,,and this is a figure that was calculated in 2005
Dialogue: 0,0:01:18.00,0:01:21.00,Default,,0000,0000,0000,,by Robert Reich,
Dialogue: 0,0:01:21.00,0:01:23.00,Default,,0000,0000,0000,,the Secretary of Labor in the Clinton Administration.
Dialogue: 0,0:01:23.00,0:01:28.00,Default,,0000,0000,0000,,Reich took the wealth of two admittedly very rich men,
Dialogue: 0,0:01:28.00,0:01:31.00,Default,,0000,0000,0000,,Bill Gates and Warren Buffett,
Dialogue: 0,0:01:31.00,0:01:34.00,Default,,0000,0000,0000,,and he found that it was equivalent to the wealth
Dialogue: 0,0:01:34.00,0:01:38.00,Default,,0000,0000,0000,,of the bottom 40 percent of the U.S. population,
Dialogue: 0,0:01:38.00,0:01:41.00,Default,,0000,0000,0000,,120 million people.
Dialogue: 0,0:01:41.00,0:01:44.00,Default,,0000,0000,0000,,Now, as it happens,
Dialogue: 0,0:01:44.00,0:01:46.00,Default,,0000,0000,0000,,Warren Buffett is not only himself a plutocrat,
Dialogue: 0,0:01:46.00,0:01:50.00,Default,,0000,0000,0000,,he is one of the most astute observers of that phenomenon,
Dialogue: 0,0:01:50.00,0:01:53.00,Default,,0000,0000,0000,,and he has his own favorite number.
Dialogue: 0,0:01:53.00,0:01:57.00,Default,,0000,0000,0000,,Buffett likes to point out that in 1992,
Dialogue: 0,0:01:57.00,0:02:00.00,Default,,0000,0000,0000,,the combined wealth of the people
Dialogue: 0,0:02:00.00,0:02:02.00,Default,,0000,0000,0000,,on the Forbes 400 list,
Dialogue: 0,0:02:02.00,0:02:05.00,Default,,0000,0000,0000,,and this is the list of the 400 richest Americans,
Dialogue: 0,0:02:05.00,0:02:08.00,Default,,0000,0000,0000,,was 300 billion dollars.
Dialogue: 0,0:02:08.00,0:02:10.00,Default,,0000,0000,0000,,Just think about it.
Dialogue: 0,0:02:10.00,0:02:12.00,Default,,0000,0000,0000,,You didn't even need to be a billionaire
Dialogue: 0,0:02:12.00,0:02:14.00,Default,,0000,0000,0000,,to get on that list in 1992.
Dialogue: 0,0:02:14.00,0:02:18.00,Default,,0000,0000,0000,,Well, today, that figure has more than quintupled
Dialogue: 0,0:02:18.00,0:02:21.00,Default,,0000,0000,0000,,to 1.7 trillion,
Dialogue: 0,0:02:21.00,0:02:24.00,Default,,0000,0000,0000,,and I probably don't need to tell you
Dialogue: 0,0:02:24.00,0:02:26.00,Default,,0000,0000,0000,,that we haven't seen anything similar happen
Dialogue: 0,0:02:26.00,0:02:28.00,Default,,0000,0000,0000,,to the middle class,
Dialogue: 0,0:02:28.00,0:02:32.00,Default,,0000,0000,0000,,whose wealth has stagnated if not actually decreased.
Dialogue: 0,0:02:32.00,0:02:35.00,Default,,0000,0000,0000,,So we're living in the age of the global plutocracy,
Dialogue: 0,0:02:35.00,0:02:38.00,Default,,0000,0000,0000,,but we've been slow to notice it.
Dialogue: 0,0:02:38.00,0:02:40.00,Default,,0000,0000,0000,,One of the reasons, I think,
Dialogue: 0,0:02:40.00,0:02:43.00,Default,,0000,0000,0000,,is a sort of boiled frog phenomenon.
Dialogue: 0,0:02:43.00,0:02:45.00,Default,,0000,0000,0000,,Changes which are slow and gradual
Dialogue: 0,0:02:45.00,0:02:47.00,Default,,0000,0000,0000,,can be hard to notice
Dialogue: 0,0:02:47.00,0:02:50.00,Default,,0000,0000,0000,,even if their ultimate impact is quite dramatic.
Dialogue: 0,0:02:50.00,0:02:53.00,Default,,0000,0000,0000,,Think about what happened, after all, to the poor frog.
Dialogue: 0,0:02:53.00,0:02:56.00,Default,,0000,0000,0000,,But I think there's something else going on.
Dialogue: 0,0:02:56.00,0:02:58.00,Default,,0000,0000,0000,,Talking about income inequality,
Dialogue: 0,0:02:58.00,0:03:00.00,Default,,0000,0000,0000,,even if you're not on the Forbes 400 List,
Dialogue: 0,0:03:00.00,0:03:03.00,Default,,0000,0000,0000,,can make us feel uncomfortable.
Dialogue: 0,0:03:03.00,0:03:06.00,Default,,0000,0000,0000,,It feels less positive, less optimistic,
Dialogue: 0,0:03:06.00,0:03:08.00,Default,,0000,0000,0000,,to talk about how the pie is sliced
Dialogue: 0,0:03:08.00,0:03:11.00,Default,,0000,0000,0000,,than to think about how to make the pie bigger.
Dialogue: 0,0:03:11.00,0:03:14.00,Default,,0000,0000,0000,,And if you do happen to be on the Forbes 400 List,
Dialogue: 0,0:03:14.00,0:03:17.00,Default,,0000,0000,0000,,talking about income distribution,
Dialogue: 0,0:03:17.00,0:03:21.00,Default,,0000,0000,0000,,and inevitably its cousin income redistribution,
Dialogue: 0,0:03:21.00,0:03:23.00,Default,,0000,0000,0000,,can be downright threatening.
Dialogue: 0,0:03:23.00,0:03:27.00,Default,,0000,0000,0000,,So we're living in the age of surging income inequality,
Dialogue: 0,0:03:27.00,0:03:30.00,Default,,0000,0000,0000,,especially at the top.
Dialogue: 0,0:03:30.00,0:03:33.00,Default,,0000,0000,0000,,What's driving it, and what can we do about it?
Dialogue: 0,0:03:33.00,0:03:37.00,Default,,0000,0000,0000,,One set of causes is political:
Dialogue: 0,0:03:37.00,0:03:42.00,Default,,0000,0000,0000,,lower taxes, deregulation, particularly of financial services,
Dialogue: 0,0:03:42.00,0:03:48.00,Default,,0000,0000,0000,,privatization, weaker legal protections for trade unions,
Dialogue: 0,0:03:48.00,0:03:50.00,Default,,0000,0000,0000,,all of these have contributed
Dialogue: 0,0:03:50.00,0:03:54.00,Default,,0000,0000,0000,,to more and more income going to the very, very top.
Dialogue: 0,0:03:54.00,0:03:57.00,Default,,0000,0000,0000,,A lot of these political factors can be broadly lumped
Dialogue: 0,0:03:57.00,0:04:01.00,Default,,0000,0000,0000,,under the category of "crony capitalism,"
Dialogue: 0,0:04:01.00,0:04:04.00,Default,,0000,0000,0000,,political changes that benefit a group
Dialogue: 0,0:04:04.00,0:04:06.00,Default,,0000,0000,0000,,of well-connected insiders
Dialogue: 0,0:04:06.00,0:04:09.00,Default,,0000,0000,0000,,but don't actually do much good for the rest of us.
Dialogue: 0,0:04:09.00,0:04:12.00,Default,,0000,0000,0000,,In practice, getting rid of crony capitalism
Dialogue: 0,0:04:12.00,0:04:14.00,Default,,0000,0000,0000,,is incredibly difficult.
Dialogue: 0,0:04:14.00,0:04:17.00,Default,,0000,0000,0000,,Think of all the years reformers of various stripes
Dialogue: 0,0:04:17.00,0:04:21.00,Default,,0000,0000,0000,,have tried to get rid of corruption in Russia, for instance,
Dialogue: 0,0:04:21.00,0:04:24.00,Default,,0000,0000,0000,,or how hard it is to re-regulate the banks
Dialogue: 0,0:04:24.00,0:04:27.00,Default,,0000,0000,0000,,even after the most profound financial crisis
Dialogue: 0,0:04:27.00,0:04:29.00,Default,,0000,0000,0000,,since the Great Depression,
Dialogue: 0,0:04:29.00,0:04:33.00,Default,,0000,0000,0000,,or even how difficult it is to get the big multinational companies,
Dialogue: 0,0:04:33.00,0:04:38.00,Default,,0000,0000,0000,,including those whose motto might be "don't do evil,"
Dialogue: 0,0:04:38.00,0:04:40.00,Default,,0000,0000,0000,,to pay taxes at a rate even approaching that
Dialogue: 0,0:04:40.00,0:04:43.00,Default,,0000,0000,0000,,paid by the middle class.
Dialogue: 0,0:04:43.00,0:04:45.00,Default,,0000,0000,0000,,But while getting rid of crony capitalism in practice
Dialogue: 0,0:04:45.00,0:04:48.00,Default,,0000,0000,0000,,is really, really hard,
Dialogue: 0,0:04:48.00,0:04:51.00,Default,,0000,0000,0000,,at least intellectually it's an easy problem.
Dialogue: 0,0:04:51.00,0:04:56.00,Default,,0000,0000,0000,,After all, no one is actually in favor of crony capitalism.
Dialogue: 0,0:04:56.00,0:04:59.00,Default,,0000,0000,0000,,Indeed, this is one of those rare issues
Dialogue: 0,0:04:59.00,0:05:03.00,Default,,0000,0000,0000,,that unites the left and the right.
Dialogue: 0,0:05:03.00,0:05:05.00,Default,,0000,0000,0000,,A critique of crony capitalism as as central
Dialogue: 0,0:05:05.00,0:05:09.00,Default,,0000,0000,0000,,to the Tea Party as it is to Occupy Wall Street.
Dialogue: 0,0:05:09.00,0:05:14.00,Default,,0000,0000,0000,,But if crony capitalism is, intellectually at least,
Dialogue: 0,0:05:14.00,0:05:16.00,Default,,0000,0000,0000,,the easy part of the problem,
Dialogue: 0,0:05:16.00,0:05:19.00,Default,,0000,0000,0000,,things get trickier when you look at the economic drivers
Dialogue: 0,0:05:19.00,0:05:22.00,Default,,0000,0000,0000,,of surging income inequality.
Dialogue: 0,0:05:22.00,0:05:26.00,Default,,0000,0000,0000,,In and of themselves, these aren't too mysterious.
Dialogue: 0,0:05:26.00,0:05:29.00,Default,,0000,0000,0000,,Globalization and the technology revolution,
Dialogue: 0,0:05:29.00,0:05:31.00,Default,,0000,0000,0000,,the twin economic transformations
Dialogue: 0,0:05:31.00,0:05:33.00,Default,,0000,0000,0000,,which are changing our lives
Dialogue: 0,0:05:33.00,0:05:36.00,Default,,0000,0000,0000,,and transforming the global economy,
Dialogue: 0,0:05:36.00,0:05:39.00,Default,,0000,0000,0000,,are also powering the rise of the super-rich.
Dialogue: 0,0:05:39.00,0:05:41.00,Default,,0000,0000,0000,,Just think about it.
Dialogue: 0,0:05:41.00,0:05:43.00,Default,,0000,0000,0000,,For the first time in history,
Dialogue: 0,0:05:43.00,0:05:45.00,Default,,0000,0000,0000,,if you are an energetic entrepreneur
Dialogue: 0,0:05:45.00,0:05:47.00,Default,,0000,0000,0000,,with a brilliant new idea
Dialogue: 0,0:05:47.00,0:05:49.00,Default,,0000,0000,0000,,or a fantastic new product,
Dialogue: 0,0:05:49.00,0:05:52.00,Default,,0000,0000,0000,,you have almost instant, almost frictionless access
Dialogue: 0,0:05:52.00,0:05:56.00,Default,,0000,0000,0000,,to a global market of more than a billion people.
Dialogue: 0,0:05:56.00,0:06:00.00,Default,,0000,0000,0000,,As a result, if you are very, very smart
Dialogue: 0,0:06:00.00,0:06:02.00,Default,,0000,0000,0000,,and very, very lucky,
Dialogue: 0,0:06:02.00,0:06:05.00,Default,,0000,0000,0000,,you can get very, very rich
Dialogue: 0,0:06:05.00,0:06:08.00,Default,,0000,0000,0000,,very, very quickly.
Dialogue: 0,0:06:08.00,0:06:10.00,Default,,0000,0000,0000,,The latest poster boy for this phenomenon
Dialogue: 0,0:06:10.00,0:06:13.00,Default,,0000,0000,0000,,is David Karp.
Dialogue: 0,0:06:13.00,0:06:15.00,Default,,0000,0000,0000,,The 26-year old founder of Tumblr
Dialogue: 0,0:06:15.00,0:06:18.00,Default,,0000,0000,0000,,recently sold his company to Yahoo
Dialogue: 0,0:06:18.00,0:06:21.00,Default,,0000,0000,0000,,for 1.1 billion dollars.
Dialogue: 0,0:06:21.00,0:06:24.00,Default,,0000,0000,0000,,Think about that for a minute:
Dialogue: 0,0:06:24.00,0:06:27.00,Default,,0000,0000,0000,,1.1 billion dollars, 26 years old.
Dialogue: 0,0:06:27.00,0:06:30.00,Default,,0000,0000,0000,,It's easiest to see how the technology revolution
Dialogue: 0,0:06:30.00,0:06:34.00,Default,,0000,0000,0000,,and globalization are creating this sort of superstar effect
Dialogue: 0,0:06:34.00,0:06:36.00,Default,,0000,0000,0000,,in highly visible fields,
Dialogue: 0,0:06:36.00,0:06:39.00,Default,,0000,0000,0000,,like sports and entertainment.
Dialogue: 0,0:06:39.00,0:06:41.00,Default,,0000,0000,0000,,We can all watch how a fantastic athlete
Dialogue: 0,0:06:41.00,0:06:46.00,Default,,0000,0000,0000,,or a fantastic performer can today leverage his or her skills
Dialogue: 0,0:06:46.00,0:06:50.00,Default,,0000,0000,0000,,across the global economy as never before.
Dialogue: 0,0:06:50.00,0:06:52.00,Default,,0000,0000,0000,,But today, that superstar effect
Dialogue: 0,0:06:52.00,0:06:55.00,Default,,0000,0000,0000,,is happening across the entire economy.
Dialogue: 0,0:06:55.00,0:06:57.00,Default,,0000,0000,0000,,We have superstar technologists.
Dialogue: 0,0:06:57.00,0:06:59.00,Default,,0000,0000,0000,,We have superstar bankers.
Dialogue: 0,0:06:59.00,0:07:02.00,Default,,0000,0000,0000,,We have superstar lawyers and superstar architects.
Dialogue: 0,0:07:02.00,0:07:04.00,Default,,0000,0000,0000,,There are superstar cooks
Dialogue: 0,0:07:04.00,0:07:06.00,Default,,0000,0000,0000,,and superstar farmers.
Dialogue: 0,0:07:06.00,0:07:08.00,Default,,0000,0000,0000,,There are even, and this is my personal favorite example,
Dialogue: 0,0:07:08.00,0:07:11.00,Default,,0000,0000,0000,,superstar dentists,
Dialogue: 0,0:07:11.00,0:07:13.00,Default,,0000,0000,0000,,the most dazzling exemplar of whom
Dialogue: 0,0:07:13.00,0:07:15.00,Default,,0000,0000,0000,,is Bernard Touati, the Frenchmen who ministers
Dialogue: 0,0:07:15.00,0:07:17.00,Default,,0000,0000,0000,,to the smiles of fellow superstars
Dialogue: 0,0:07:17.00,0:07:20.00,Default,,0000,0000,0000,,like Russian oligarch Roman Abramovich
Dialogue: 0,0:07:20.00,0:07:23.00,Default,,0000,0000,0000,,or European-born American fashion designer
Dialogue: 0,0:07:23.00,0:07:25.00,Default,,0000,0000,0000,,Diane von Furstenberg.
Dialogue: 0,0:07:25.00,0:07:28.00,Default,,0000,0000,0000,,But while it's pretty easy to see how globalization
Dialogue: 0,0:07:28.00,0:07:30.00,Default,,0000,0000,0000,,and the technology revolution
Dialogue: 0,0:07:30.00,0:07:33.00,Default,,0000,0000,0000,,are creating this global plutocracy,
Dialogue: 0,0:07:33.00,0:07:37.00,Default,,0000,0000,0000,,what's a lot harder is figuring out what to think about it.
Dialogue: 0,0:07:37.00,0:07:39.00,Default,,0000,0000,0000,,And that's because,
Dialogue: 0,0:07:39.00,0:07:41.00,Default,,0000,0000,0000,,in contrast with crony capitalism,
Dialogue: 0,0:07:41.00,0:07:45.00,Default,,0000,0000,0000,,so much of what globalization and the technology revolution
Dialogue: 0,0:07:45.00,0:07:47.00,Default,,0000,0000,0000,,have done is highly positive.
Dialogue: 0,0:07:47.00,0:07:49.00,Default,,0000,0000,0000,,Let's start with technology.
Dialogue: 0,0:07:49.00,0:07:52.00,Default,,0000,0000,0000,,I love the internet. I love my mobile devices.
Dialogue: 0,0:07:52.00,0:07:54.00,Default,,0000,0000,0000,,I love the fact that they mean that
Dialogue: 0,0:07:54.00,0:07:58.00,Default,,0000,0000,0000,,whoever chooses to will be able to watch this talk
Dialogue: 0,0:07:58.00,0:08:00.00,Default,,0000,0000,0000,,far beyond this auditorium.
Dialogue: 0,0:08:00.00,0:08:03.00,Default,,0000,0000,0000,,I'm even more of a fan of globalization.
Dialogue: 0,0:08:03.00,0:08:05.00,Default,,0000,0000,0000,,This is the transformation
Dialogue: 0,0:08:05.00,0:08:08.00,Default,,0000,0000,0000,,which has lifted hundreds of millions
Dialogue: 0,0:08:08.00,0:08:10.00,Default,,0000,0000,0000,,of the world's poorest people out of poverty
Dialogue: 0,0:08:10.00,0:08:13.00,Default,,0000,0000,0000,,and into the middle class,
Dialogue: 0,0:08:13.00,0:08:15.00,Default,,0000,0000,0000,,and if you happen to live in the rich part of the world,
Dialogue: 0,0:08:15.00,0:08:18.00,Default,,0000,0000,0000,,it's made many new products affordable
Dialogue: 0,0:08:18.00,0:08:21.00,Default,,0000,0000,0000,,— who do you think built your iPhone? —
Dialogue: 0,0:08:21.00,0:08:25.00,Default,,0000,0000,0000,,and things that we've relied on for a long time much cheaper.
Dialogue: 0,0:08:25.00,0:08:28.00,Default,,0000,0000,0000,,Think of your dishwasher or your t-shirt.
Dialogue: 0,0:08:28.00,0:08:30.00,Default,,0000,0000,0000,,So what's not to like?
Dialogue: 0,0:08:30.00,0:08:32.00,Default,,0000,0000,0000,,Well, a few things.
Dialogue: 0,0:08:32.00,0:08:34.00,Default,,0000,0000,0000,,One of the things that worries me
Dialogue: 0,0:08:34.00,0:08:38.00,Default,,0000,0000,0000,,is how easily what you might call meritocratic plutocracy
Dialogue: 0,0:08:38.00,0:08:41.00,Default,,0000,0000,0000,,can become crony plutocracy.
Dialogue: 0,0:08:41.00,0:08:44.00,Default,,0000,0000,0000,,Imagine you're a brilliant entrepreneur
Dialogue: 0,0:08:44.00,0:08:47.00,Default,,0000,0000,0000,,who has successfully sold that idea or that product
Dialogue: 0,0:08:47.00,0:08:49.00,Default,,0000,0000,0000,,to the global billions
Dialogue: 0,0:08:49.00,0:08:51.00,Default,,0000,0000,0000,,and become a billionaire in the process.
Dialogue: 0,0:08:51.00,0:08:53.00,Default,,0000,0000,0000,,It gets tempting at that point
Dialogue: 0,0:08:53.00,0:08:56.00,Default,,0000,0000,0000,,to use your economic [inaud]
Dialogue: 0,0:08:56.00,0:09:00.00,Default,,0000,0000,0000,,to manipulate the rules of the global political economy
Dialogue: 0,0:09:00.00,0:09:02.00,Default,,0000,0000,0000,,in your own favor.
Dialogue: 0,0:09:02.00,0:09:06.00,Default,,0000,0000,0000,,And that's no mere hypothetical example.
Dialogue: 0,0:09:06.00,0:09:10.00,Default,,0000,0000,0000,,Think about Amazon, Apple, Google, Starbucks.
Dialogue: 0,0:09:10.00,0:09:13.00,Default,,0000,0000,0000,,These are among the world's most admired,
Dialogue: 0,0:09:13.00,0:09:15.00,Default,,0000,0000,0000,,most beloved, most innovative companies.
Dialogue: 0,0:09:15.00,0:09:17.00,Default,,0000,0000,0000,,They also happen to be particularly adept
Dialogue: 0,0:09:17.00,0:09:20.00,Default,,0000,0000,0000,,at working the international tax system
Dialogue: 0,0:09:20.00,0:09:24.00,Default,,0000,0000,0000,,so as to lower their tax bill very, very significantly.
Dialogue: 0,0:09:24.00,0:09:28.00,Default,,0000,0000,0000,,And why stop at just playing the global political
Dialogue: 0,0:09:28.00,0:09:30.00,Default,,0000,0000,0000,,and economic system as it exists
Dialogue: 0,0:09:30.00,0:09:33.00,Default,,0000,0000,0000,,to your own maximum advantage?
Dialogue: 0,0:09:33.00,0:09:37.00,Default,,0000,0000,0000,,Once you have the tremendous economic power
Dialogue: 0,0:09:37.00,0:09:40.00,Default,,0000,0000,0000,,that we're seeing at the very, very top of the income distribution
Dialogue: 0,0:09:40.00,0:09:43.00,Default,,0000,0000,0000,,and the political power that inevitably entails,
Dialogue: 0,0:09:43.00,0:09:45.00,Default,,0000,0000,0000,,it becomes tempting as well
Dialogue: 0,0:09:45.00,0:09:49.00,Default,,0000,0000,0000,,to start trying to change the rules of the game
Dialogue: 0,0:09:49.00,0:09:52.00,Default,,0000,0000,0000,,in your own favor.
Dialogue: 0,0:09:52.00,0:09:54.00,Default,,0000,0000,0000,,Again, this is no mere hypothetical.
Dialogue: 0,0:09:54.00,0:09:56.00,Default,,0000,0000,0000,,It's what the Russian oligarchs did
Dialogue: 0,0:09:56.00,0:09:59.00,Default,,0000,0000,0000,,in creating the sale of the century privatization
Dialogue: 0,0:09:59.00,0:10:02.00,Default,,0000,0000,0000,,of Russia's natural resources.
Dialogue: 0,0:10:02.00,0:10:04.00,Default,,0000,0000,0000,,It's one way of describing what happened
Dialogue: 0,0:10:04.00,0:10:06.00,Default,,0000,0000,0000,,with deregulation of the financial services
Dialogue: 0,0:10:06.00,0:10:08.00,Default,,0000,0000,0000,,in the U.S. and the U.K.
Dialogue: 0,0:10:08.00,0:10:10.00,Default,,0000,0000,0000,,A second thing that worries me
Dialogue: 0,0:10:10.00,0:10:12.00,Default,,0000,0000,0000,,is how easily meritocratic plutocracy
Dialogue: 0,0:10:12.00,0:10:15.00,Default,,0000,0000,0000,,can become aristocracy.
Dialogue: 0,0:10:15.00,0:10:17.00,Default,,0000,0000,0000,,One way of describing the plutocrats
Dialogue: 0,0:10:17.00,0:10:19.00,Default,,0000,0000,0000,,is as alpha geeks,
Dialogue: 0,0:10:19.00,0:10:21.00,Default,,0000,0000,0000,,and they are people who are acutely aware
Dialogue: 0,0:10:21.00,0:10:24.00,Default,,0000,0000,0000,,of how important highly sophisticated
Dialogue: 0,0:10:24.00,0:10:27.00,Default,,0000,0000,0000,,analytical and quantitative skills are in today's economy.
Dialogue: 0,0:10:27.00,0:10:30.00,Default,,0000,0000,0000,,That's why they are spending
Dialogue: 0,0:10:30.00,0:10:33.00,Default,,0000,0000,0000,,unprecedented time and resources
Dialogue: 0,0:10:33.00,0:10:35.00,Default,,0000,0000,0000,,educating their own children.
Dialogue: 0,0:10:35.00,0:10:38.00,Default,,0000,0000,0000,,The middle class is spending more on schooling too,
Dialogue: 0,0:10:38.00,0:10:41.00,Default,,0000,0000,0000,,but in the global educational arms race
Dialogue: 0,0:10:41.00,0:10:43.00,Default,,0000,0000,0000,,that starts at nursery school
Dialogue: 0,0:10:43.00,0:10:46.00,Default,,0000,0000,0000,,and ends at Harvard, Stanford, or MIT,
Dialogue: 0,0:10:46.00,0:10:49.00,Default,,0000,0000,0000,,the 99 percent is increasingly outgunned
Dialogue: 0,0:10:49.00,0:10:52.00,Default,,0000,0000,0000,,by the one percent.
Dialogue: 0,0:10:52.00,0:10:54.00,Default,,0000,0000,0000,,The result is something that economists Alan Krueger
Dialogue: 0,0:10:54.00,0:10:58.00,Default,,0000,0000,0000,,and Miles Corak call "the Great Gatsby Curve."
Dialogue: 0,0:10:58.00,0:11:00.00,Default,,0000,0000,0000,,As income inequality increases,
Dialogue: 0,0:11:00.00,0:11:03.00,Default,,0000,0000,0000,,social mobility decreases.
Dialogue: 0,0:11:03.00,0:11:05.00,Default,,0000,0000,0000,,The plutocracy may be a meritocracy,
Dialogue: 0,0:11:05.00,0:11:08.00,Default,,0000,0000,0000,,but increasingly you have to be born
Dialogue: 0,0:11:08.00,0:11:13.00,Default,,0000,0000,0000,,on the top run of the ladder to even take part in that race.
Dialogue: 0,0:11:13.00,0:11:16.00,Default,,0000,0000,0000,,The third thing, and this is what worries me the most,
Dialogue: 0,0:11:16.00,0:11:20.00,Default,,0000,0000,0000,,is the extent to which those same largely positive forces
Dialogue: 0,0:11:20.00,0:11:23.00,Default,,0000,0000,0000,,which are driving the rise of the global plutocracy
Dialogue: 0,0:11:23.00,0:11:27.00,Default,,0000,0000,0000,,also happen to be hollowing out the middle class
Dialogue: 0,0:11:27.00,0:11:30.00,Default,,0000,0000,0000,,in Western industrialized economies.
Dialogue: 0,0:11:30.00,0:11:32.00,Default,,0000,0000,0000,,Let's start with technology.
Dialogue: 0,0:11:32.00,0:11:35.00,Default,,0000,0000,0000,,Those same forces that are creating billionaires
Dialogue: 0,0:11:35.00,0:11:39.00,Default,,0000,0000,0000,,are also devouring many traditional middle class jobs.
Dialogue: 0,0:11:39.00,0:11:42.00,Default,,0000,0000,0000,,When's the last time you used a travel agent?
Dialogue: 0,0:11:42.00,0:11:45.00,Default,,0000,0000,0000,,And in contrast with the industrial revolution,
Dialogue: 0,0:11:45.00,0:11:47.00,Default,,0000,0000,0000,,the titans of our new economy
Dialogue: 0,0:11:47.00,0:11:50.00,Default,,0000,0000,0000,,aren't creating that many new jobs.
Dialogue: 0,0:11:50.00,0:11:54.00,Default,,0000,0000,0000,,At its zenith, G.M. employed hundreds of thousands,
Dialogue: 0,0:11:54.00,0:11:57.00,Default,,0000,0000,0000,,Facebook fewer than 10,000.
Dialogue: 0,0:11:57.00,0:11:59.00,Default,,0000,0000,0000,,The same is true of globalization.
Dialogue: 0,0:11:59.00,0:12:03.00,Default,,0000,0000,0000,,For all that it is raising hundreds of millions of people
Dialogue: 0,0:12:03.00,0:12:05.00,Default,,0000,0000,0000,,out of poverty in the emerging markets,
Dialogue: 0,0:12:05.00,0:12:07.00,Default,,0000,0000,0000,,it's also outsourcing a lot of jobs
Dialogue: 0,0:12:07.00,0:12:10.00,Default,,0000,0000,0000,,from the developed Western economies.
Dialogue: 0,0:12:10.00,0:12:13.00,Default,,0000,0000,0000,,The terrifying reality is
Dialogue: 0,0:12:13.00,0:12:15.00,Default,,0000,0000,0000,,that there is no economic rule
Dialogue: 0,0:12:15.00,0:12:18.00,Default,,0000,0000,0000,,which automatically translates
Dialogue: 0,0:12:18.00,0:12:20.00,Default,,0000,0000,0000,,increased economic growth
Dialogue: 0,0:12:20.00,0:12:22.00,Default,,0000,0000,0000,,into widely-shared prosperity.
Dialogue: 0,0:12:22.00,0:12:25.00,Default,,0000,0000,0000,,That's shown in what I consider to be
Dialogue: 0,0:12:25.00,0:12:29.00,Default,,0000,0000,0000,,the most scary economic statistic of our time.
Dialogue: 0,0:12:29.00,0:12:32.00,Default,,0000,0000,0000,,Since the late 1990s, increases in productivity
Dialogue: 0,0:12:32.00,0:12:35.00,Default,,0000,0000,0000,,have been decoupled from increases
Dialogue: 0,0:12:35.00,0:12:37.00,Default,,0000,0000,0000,,in wages and employment.
Dialogue: 0,0:12:37.00,0:12:40.00,Default,,0000,0000,0000,,That means that our countries are getting richer,
Dialogue: 0,0:12:40.00,0:12:43.00,Default,,0000,0000,0000,,our companies are getting more efficient,
Dialogue: 0,0:12:43.00,0:12:45.00,Default,,0000,0000,0000,,but we're not creating more jobs
Dialogue: 0,0:12:45.00,0:12:48.00,Default,,0000,0000,0000,,and we're not paying people, as a whole, more.
Dialogue: 0,0:12:48.00,0:12:53.00,Default,,0000,0000,0000,,One scary conclusion you could draw from all of this
Dialogue: 0,0:12:53.00,0:12:56.00,Default,,0000,0000,0000,,is to worry about structural unemployment.
Dialogue: 0,0:12:56.00,0:13:00.00,Default,,0000,0000,0000,,What worries we more is a different nightmare scenario.
Dialogue: 0,0:13:00.00,0:13:03.00,Default,,0000,0000,0000,,After all, in a totally free labor market,
Dialogue: 0,0:13:03.00,0:13:06.00,Default,,0000,0000,0000,,we could find jobs for pretty much everyone.
Dialogue: 0,0:13:06.00,0:13:08.00,Default,,0000,0000,0000,,The dystopia that worries me
Dialogue: 0,0:13:08.00,0:13:11.00,Default,,0000,0000,0000,,is a universe in which a few geniuses
Dialogue: 0,0:13:11.00,0:13:14.00,Default,,0000,0000,0000,,invent Google and its ilk
Dialogue: 0,0:13:14.00,0:13:19.00,Default,,0000,0000,0000,,and the rest of us are employed giving them massages.
Dialogue: 0,0:13:19.00,0:13:22.00,Default,,0000,0000,0000,,So when I get really depressed about all of this,
Dialogue: 0,0:13:22.00,0:13:25.00,Default,,0000,0000,0000,,I comfort myself in thinking about the industrial revolution.
Dialogue: 0,0:13:25.00,0:13:29.00,Default,,0000,0000,0000,,After all, for all its grim, satanic mills,
Dialogue: 0,0:13:29.00,0:13:32.00,Default,,0000,0000,0000,,it worked out pretty well, didn't it.
Dialogue: 0,0:13:32.00,0:13:39.00,Default,,0000,0000,0000,,After all, all of us here are richer, healthier, taller
Dialogue: 0,0:13:39.00,0:13:41.00,Default,,0000,0000,0000,,— well, there are a few exceptions —
Dialogue: 0,0:13:41.00,0:13:46.00,Default,,0000,0000,0000,,and live longer than our ancestors in the early 19th century.
Dialogue: 0,0:13:46.00,0:13:49.00,Default,,0000,0000,0000,,But it's important to remember
Dialogue: 0,0:13:49.00,0:13:51.00,Default,,0000,0000,0000,,that before we learned how to share the fruits
Dialogue: 0,0:13:51.00,0:13:54.00,Default,,0000,0000,0000,,of the industrial revolution
Dialogue: 0,0:13:54.00,0:13:56.00,Default,,0000,0000,0000,,with the broad swathes of society,
Dialogue: 0,0:13:56.00,0:13:59.00,Default,,0000,0000,0000,,we had to go through two depressions,
Dialogue: 0,0:13:59.00,0:14:01.00,Default,,0000,0000,0000,,the Great Depression of the 1930s,
Dialogue: 0,0:14:01.00,0:14:04.00,Default,,0000,0000,0000,,the Long Depression of the 1870s,
Dialogue: 0,0:14:04.00,0:14:07.00,Default,,0000,0000,0000,,two world wars, communist revolutions
Dialogue: 0,0:14:07.00,0:14:09.00,Default,,0000,0000,0000,,in Russia and in China,
Dialogue: 0,0:14:09.00,0:14:12.00,Default,,0000,0000,0000,,and an era of tremendous social
Dialogue: 0,0:14:12.00,0:14:14.00,Default,,0000,0000,0000,,and political upheaval in the West.
Dialogue: 0,0:14:14.00,0:14:17.00,Default,,0000,0000,0000,,We also, not coincidentally,
Dialogue: 0,0:14:17.00,0:14:20.00,Default,,0000,0000,0000,,went through an era of tremendous
Dialogue: 0,0:14:20.00,0:14:22.00,Default,,0000,0000,0000,,social and political inventions.
Dialogue: 0,0:14:22.00,0:14:24.00,Default,,0000,0000,0000,,We created the modern welfare state.
Dialogue: 0,0:14:24.00,0:14:27.00,Default,,0000,0000,0000,,We created public education.
Dialogue: 0,0:14:27.00,0:14:29.00,Default,,0000,0000,0000,,We created public health care.
Dialogue: 0,0:14:29.00,0:14:31.00,Default,,0000,0000,0000,,We created public pensions.
Dialogue: 0,0:14:31.00,0:14:33.00,Default,,0000,0000,0000,,We created unions.
Dialogue: 0,0:14:33.00,0:14:35.00,Default,,0000,0000,0000,,Today, we are living through an era
Dialogue: 0,0:14:35.00,0:14:37.00,Default,,0000,0000,0000,,of economic transformation
Dialogue: 0,0:14:37.00,0:14:40.00,Default,,0000,0000,0000,,comparable in its scale and its scope
Dialogue: 0,0:14:40.00,0:14:42.00,Default,,0000,0000,0000,,to the industrial revolution.
Dialogue: 0,0:14:42.00,0:14:45.00,Default,,0000,0000,0000,,To be sure that this new economy benefits us all
Dialogue: 0,0:14:45.00,0:14:47.00,Default,,0000,0000,0000,,and not just the plutocrats,
Dialogue: 0,0:14:47.00,0:14:49.00,Default,,0000,0000,0000,,we need to embark on an era
Dialogue: 0,0:14:49.00,0:14:52.00,Default,,0000,0000,0000,,of comparably ambitious social and political change.
Dialogue: 0,0:14:52.00,0:14:55.00,Default,,0000,0000,0000,,We need a new New Deal.
Dialogue: 0,0:14:55.00,0:14:59.00,Default,,0000,0000,0000,,(Applause)