- [Narrator] We view growth as something positive.
It's great watching our kids grow up or seeing a tree grow.
Yet we are always aware that all growth must come to an end.
There's a limit.
Nature knows no such thing as infinite growth.
This rule seems to apply to every kind of growth but one.
Economic growth is somehow
supposed to continue indefinitely.
- We believed then and now there are no limits
to growth and human progress when men
and women are free to follow their dreams.
And we were right.
- [Narrator] If that growth fails to materialize, we panic.
But why?
As one person recognized 150 years ago, growth is
the fundamental principle of our economic system.
Capitalism only works when the economy grows.
But Karl Marx recognized something else as well.
It is this growth that will eventually
destroy the system itself.
And today, have we reached that point?
Is the system about to collapse?
Or might infinite growth actually be possible?
- The governments don't want us to even question the G word,
they don't even want to put a discussion around growth.
If you were looking at this from the outside,
an alien arriving from outer space and you're looking
at this society, you would really wonder what was going on.
What are they doing?
What is this growth that has to appear in political
sentence and is the basis of every economics textbook?
What is it all about?
Is it a religion that they have?
Is it a god that they're chasing?
Is it a virus that's taken over them?
And what is this visceral fear that emerges
as soon as growth starts to go away?
(up tempo music)
- [Narrator] The Federation of German Industries
is Germany's most influential lobby.
No German government can afford to ignore its voice.
- [Narrator] Where does this unshakable
belief in economic growth come from?
Has it always been there?
Is it really part of human nature?
(gentle music)
- [Man] It was through audacious and imaginative
use of mass production methods that US industry
was able to perform its war time miracles.
To build more planes than all the united nations
put together, to turn out ships at the rate
of 200 a month, ships which carried overseas the armed
might of the United States to decide the outcome of the war.
- [Narrator] The success story of economic
growth began during World War II.
Mass production of tanks and aircraft led
the American economy out of crisis.
The output of military equipment was now calculated by
a new statistical measure, gross domestic product, or GDP.
If production, i.e. GDP, grew, then so did prosperity.
Americans believed so firmly in this new formula
that they compelled their allies to bring their
economic policies in line with it.
From then on, it wasn't people's incomes
that counted, it was only growth.
(dramatic music)
- And it turned out to be such a useful measure
actually for the war effort and for understanding
the war effort, that afterwards there was a lot of effort
put into building this system of national accounts, having
this number, the GDP, correctly measured through
the economy, and it became almost incrementally, it became
the single most important policy number across the world.
It kind of symbolizes progress to us.
It sort of says, wow, things are getting
bigger so they must be getting better.
That was the birth of the GDP.
- [Narrator] In the three decades after the war,
the Western economies grew up to eight percent annually.
In the US, they called it the golden age of capitalism.
In France, they were the 30 glorious years.
In Germany, it was the economic miracle.
An entire generation enjoyed material
prosperity and full employment and this
became engraved in the collective consciousness.
Even though these high growth rates were only
made possible by massive war time destruction,
the belief in growth was now unstoppable.
GDP became the most important benchmark in history.
(up tempo music)
- And the economy and the grace of the economy was doing
a good job for us when we were young, if you like,
when as an economy, as a society, we were young.
And one of the really important things to say
is that there are some societies where that is still
necessary, where you still need that growth, where you
still need food, clothing, and shelter, where there are
very, very poor undernourished people living on less than
the price of a skinny latte from the cafe downstairs.
That's a situation where growth makes some sense.
But the idea that as human beings all we want ever is more
and more stuff doesn't really stack up so after a certain
point you have to ask yourself, well, how much is enough?
How much more do I need to grow the economy
to satisfy human appetites?
- The GDP counts everything that's produced really.
Yeah, sure, it counts some of the good things
that we need but it also counts ambulances
to clear up carnage on the streets or the rescue
efforts when an oil tanker pollutes the ocean.
To some extent all of this is a measure of
the busy-ness of economic activity.
But many of these things, even though they're getting
bigger, are not really economic growth, they're more
uneconomic growth because they're not delivering welfare.
Sometimes they're just clearing up after the mess we made.
Sometimes they're really creating mess,
really destructive production if you like of,
you know, things that actually just destroy stuff.
- [Narrator] The 1970s saw growth rates sink for
the first time due to the oil crisis and other factors.
The boom was over, the markets saturated.
Western economies stagnated.
Millions suddenly found themselves unemployed.
It was uncharted territory.
For the first time, the limits of growth became visible,
economically, socially, and ecologically.
- [Man] We do have some understanding about growth.
- [Narrator] In 1972, a group of scholars,
commissioned by the Club of Rome, presented a report
in Washington entitled "The Limits to Growth."
Using a computer simulation, researchers
at MIT had calculated for the first time what
continuous economic growth would do to the planet.
Their findings set off alarm bells around the world.
- When resource consumption is doubling every 20 years.
- [Narrator] For the first time people were
confronted with the fact that economic growth
could also have negative consequences.
And that the planet's natural limits would soon be reached.
The success story of growth was in crisis.
- Most important lesson is that we're near
the end of our development of society.
We've been going on for about 2,000 years and we've
reached levels of prosperity which carry the seeds
of disruption and necessitate a complete re-look at the
whole world's social, political, and other situations.
- [Narrator] The Club of Rome report sold
30 million copies and became a global sensation.
The realization that exponential growth was
destroying the foundation of human life on this
planet was entirely new and shocking to many people.
And yet, soon, the scholars themselves came under attack.
Their calculations were decried as irresponsible fear
mongering because it's impossible to admit the unacceptable.
The success story of growth must continue.
Unfortunately many of the scholars predictions
turned out to be right and in many cases reality
even surpassed their bleak predictions.
As the Club of Rome report was causing
an international uproar, the Brazilian rainforest
in the Amazon basin was still nearly untouched.
The huge Brazilian state of Mato Grosso, largely populated
by indigenous people, consisted of forest and savanna.
Today, not much of that is left.
Since the mid '80s, progress, aided by international
investors, has been eating away at the rainforest.
35 football fields of forest disappear every minute.
It's been the same story over and over again.
Lumberjacks move in first, then cattle breeders,
and finally, the soybean barons.
- [Narrator] The tropical climate delivers three to four
harvests per year and with it massive profits.
Soy and corn for export and animal feed.
Highway 163 is the gateway to the Amazon basin.
It brought lumberjacks, money,
and destruction into the forest.
Today countless trucks line the agribusiness
highway transporting their valuable cargo
to the international ports.
They pass an endless sea of soybean fields,
enormous silos, and slaughterhouses to one of
the largest boom regions in the world.
Growth rates of up to 20%.
Big business.
- In the '70s, this region, it was just populized
by Indians, it was just amazing forests.
34 years just of colonization and it's the most
important region in agribusiness of the country.
It's the right place to make new investments, to make money.
Here is the most important, biggest,
food lots in the state of Mato Grosso.
The cattle, a good part are exported
to Russia, China, and other countries.
Here we work.
It's just classify the animals.
- [Matheus Vieira] Cattle goes to the JBS,
the most biggest meat industry in the world.
He's from Brazil and they have another
12 countries around the world.
- [Interviewer] Do you see any limits?
- No.
Next 10 years with the technologies, what can I say?
There is no limits.
The limit's probably the sky.
- [Narrator] In just a few years,
Mato Grosso's untouched wilderness was
transformed into the world's largest food factory.
- [Narrator] In response to the crisis of the '70s,
economic policy underwent a change of course.
New growth had to be followed no matter what the cost.
Even if that meant unleashing the primary
forces of finance capitalism.
These had been contained after World War II
because they were held responsible for
the Great Depression and the war itself.
Monetarism was the new magic word.
- Monetarism was the idea that if you put more money into
the economy, liquidity it was called, that additional money
in the economy would help real investment that would
help give us more production, it would allow us to consume
more goods, and we would get growth back again.
So, this little hiatus, if you like, in the '70s primarily
caused by the oil crisis led to a transformation in the
economics of our societies and in particular how we think
about growth and how we think about stimulating growth.
- [Narrator] Governments deregulated financial markets.
Banks, insurance companies, and investment funds gained
in influence and were now allowed to gamble with
currencies, stocks, even with people's retirement funds.
Capital was let loose and the financial
sector was flooded with money.
(jazz music)
It was a pact with the devil and the beginning
of a slow process of self disempowerment.
In exchange for growth, governments relinquished
their power to financial markets.
But who do we mean by financial markets and capital?
And what does it all have to do with us?
The Allianz Group is Europe's biggest insurance
conglomerate and one of the biggest players
in the global financial markets.
- And yes, China, contributed about one percent.
And next you have India,
which was less than 0.2% contribution.
And that's not.
- That's true but China still is a little
bit struggling really to change their business
model from investment and production oriented toward
consumption and service oriented business model.
If we summarize this, moderate positive growth in China,
therefore also in Asia overall, some kind of modeled growth
and in the developed markets in Europe and the US.
There are also no new growth drivers to be seen.
So, the idea is collaboration with the World Bank
to do projects together, directly in emerging markets
based on hard currency, US dollar or Euro and so
to avoid the local currency volatility.
If we invest in emerging markets, get a nice collateral,
a nice on it, so we have a security we can sell
if necessary like in the finance area,
that's let's say a win win situation for us.
- I take that as a yes.
- [Narrator] The money of millions of insured
individuals is sent on its way to multiply.
When Andreas Gruber's team has a rough idea
to which countries and sectors the billions
should flow, they hire an asset manager.
He determines what stocks or bonds to invest in.
- Most of our clients are institutions, companies, pension
funds, employers federations, also unions, churches,
central banks, and sovereign wealth management companies.
What they want is they want their
money invested in the capital market.
Our customers expect their capital to be returned.
They want their money back and they
want their return on their capital.
And the more growth there is the higher their return.
Worldwide Pimco manages 1.2 trillion Euros
of assets and in Germany we're managing 480 billion
Euros of assets we have under management here.
So, the financial markets, they have a social role
in distributing people's savings towards investment.
And that investment is usually a form of debt.
So, when you take out a loan, for example,
to buy a house, that loan could end up in a bond
and we could end up buying that bond.
So, growth is important so that individuals
and companies who borrow money in the capital
markets can actually pay those loans back.
- No, that's pre-trade.
- [Man] Yeah, but he wouldn't say.
- So, there's always debt in the system.
And we can aggregate that up to the whole country level
and without growth that debt cannot be repaid back.
Imagine a world where there's zero growth.
That's a world in which pretty much everything gets frozen.
If you haven't got a job, in this new world,
with no growth, bad luck.
You're gonna have to wait for somebody
to retire before maybe you get their job.
A society without growth probably won't work at all.
Not for long.
It will degenerate into collapse.
- [Narrator] Without growth, societies will descend into
chaos according to the financial and political elite.
But is that really the case?
Isn't it rather their blind faith
in growth that leads us to chaos?
In the '80s, the world of finance operating from
the city of London and Wall Street increased
its influence on governments and societies
and became the driving force of capitalism.
Today, financial markets, not governments,
determine the wellbeing of entire countries.
How did it come to this?
How could financial markets gain such
influence over our own lives?
(electric guitar music)
One person who knows the financial world better
than almost anyone is Stewart Cowley.
For nearly 30 years, he was a successful fund
manager on Wall Street and in the city of London.
- No, I never planned to be a fund manager.
I was a scientist and I was at Oxford and one night I was
playing in a jazz quartet and the drummer was an economist.
We were very drunk and I said, you know,
what's this thing in the city?
And he told us all about it and I woke up the next
morning with a massive hangover but remembered what he
said and I went to the careers department at Oxford
University and got the forms and filled them in really
badly and before I knew it I'd been offered a job
and had been offered 20,000 pounds to go
and start on Wall Street in 1987.
And that was the Wild West.
That was the beginning of it really.
And we went into the new era of Reagan, Thatcher
and liberal trade so what we're doing is we're
taking the core set of the system, yes, and we
went through this process of liberalization.
So, the so-called big bang in the city was all about
financial deregulation, let's go, let the market decide
and let's hire people, and let's see what happens, yes.
As opposed to this really kind
of controlled atmosphere which we'd had before.
And it was that that we walked into where money now talks,
now money wins and you need people, smart people,
to trade the markets and make finance the powerhouse
behind capitalism which it's supposed to be because
all capitalism functions on debt and functions
on money and particularly debt.
And that's what it did and that's when
growth and inflation exploded in the 1980s.
(up tempo music)
- [Narrator] The plan seemed to work, stock markets boomed,
growth no longer needed to be financed by increasing
wages and tax revenue, now it was all about credit.
Governments and individuals were to take out
loans from banks and investors so that they could
be good consumers and thus generate growth.
- Credit cards come along, overdraft facilities,
lending for houses becomes widely available
and it's at that point that it explodes.
That now it's not just the very wealthy who have
access to all these things, consumerism, it's now
people lower down the income scales as well.
And if you look at money supply and the supply
of credit in the early '80s, it just explodes.
There's been access to consumerism and kind
of promotion of consumerism plus debt which has
created the growth and created where we are today.
When was the last time you heard anybody say
that I can't come out tonight 'cause we're
saving up to buy a refrigerator?
It just doesn't happen you know.
Nobody waits anymore.
- [Narrator] The cold logic of the market
took over producing winners and losers.
- [Interviewer] Used to be a poker player.
Is this poker play with other means?
- Well, yeah, I've played some poker in my lifetime,
I suppose a lot of people in this business have.
I think there's a common feeling that playing cards
or playing blackjack or something like that is gambling
but of course we know it's not really gambling it's
taking into account the probability of certain
events occurring and placing wages accordingly.
We would call that the art of speculation.
- [Narrator] One of the people who knew best how
to profit from this new logic was Donald Trump.
- I really think I have an instinct but I don't
think it's the instinct of a shark.
I think it's the instinct of maybe getting what
I want or knowing how to get what I want.
- [Narrator] Only a few recognized the profit
opportunities in this new era as well as Donald Trump.
He made large scale purchases of derelict New
York apartment blocks and promised to transform
them into luxury hotels and apartments.
He received financing from banks high on the market boom
and through the largest tax break in New York City history.
Trump himself paid practically nothing.
- Manhattan is an incredible place where you build
a huge building and it's sold out in a matter of days.
I mean, you know, you build a building
with literally three or 400 units.
I'm building a building, it's one of the hottest buildings
anyone's ever seen, it's just selling like hotcakes.
Manhattan itself is becoming a place of the rich period.
- Where are your limits, Mr. Trump?
- Well, I don't what my limits are but I know
that when I reach my limits I hope I'm gonna
be able to know at that point.
- [Narrator] The genie was out of the bottle.
The brave new world of financial capitalism
could no longer be constrained.
And great efforts were made to sell
it as a controllable and secure system.
- The whole industry is based around a kind
of illusion and the illusion of certainty.
There is a vested interest if you like inside of the system
as it is to project knowledge and extra knowledge.
And that's not to say that the people who are
in it are telling lies, it's that they're doing
their best with what they have but they really
don't have any more knowledge than probably you do.
- [Narrator] The Bloomberg Company from New York
plays a central role in the financial system.
Since the 1980s, Bloomberg has provided stock traders
and bankers with lightning fast price fluctuations
and finance data from around the globe making it one
of the world's most influential media companies.
Around the clock, Bloomberg's news agency and stock market
channel broadcast the glad tidings of the free market.
- Our role in financial markets
is as a provider of transparency.
We provide a huge amount of data, a huge amount
of numbers on markets, on economies, on companies,
all the things that investors and companies themselves
need to operate to make money can be discovered through
the Bloomberg be it through the data we provide
or be it in the form of breaking news
from our journalists from around the world.
It's a one stop shop for the financial markets.
We're trying to inform the markets, we're certainly
not trying to drive them providing a chronicle
of capitalism, telling the story of money is vitally
important at Bloomberg and central to what Bloomberg does.
We're trying to make a real world feel for people
so that they understand what's happened and why
it's happened and what might happen next.
Economic growth data is one of the most
important numbers we look for, it provides
a football score on the state of an economy.
Steady, solid growth in financial markets
is usually reflected in solid sustainable
growth in economics, in demand, in jobs markets.
The reason is that people feel wealthier.
- These are the yields in Spain, Italy,
Ireland, they're all falling today.
Bond insurance is falling across Europe today
and those are the commodities, the far right hand side
of your screen after Greece of course received a deal.
- [Simon Kennedy] If you look at the textbooks there should
be no limits to growth but if you look in the newspapers at
the moment you get the feeling there is a break on growth.
The central question now is whether we're in a cyclical
slump or whether something structural is going on.
- Nine percent lower, biggest drop since 2008.
- [Interviewer] And do you have a personal opinion on that?
- I don't have a personal opinion, I'm a journalist.
I do but I'm not going to share it.
So the history of the world would suggest that man
actually usually gets it right quite a lot of the time.
That when backs are put against the wall
those entrepreneurs, those investors have
smart ideas can actually flourish.
If you look back 20 years, the idea of Facebook or Twitter,
of Apple computers, of all those things that we almost take
for granted these days, are new sources of growth.
Yes, the world can reinvent itself.
It has done so multiple times in history.
You can usually bet on the human
being to find a better future.
- I used Bloomberg for, throughout my 28 year career.
Every single day.
Empires are based upon people's remaining to have
confidence in the information that they're giving out
and the promotion of the ideology and the narrative which
finance is based around which has increasingly become this
kind of game show approach to things in order to get people
to invest, be interested, see the possibilities in it.
The capitalist message if you like.
For a period of time, everybody wins, that's the thing.
And it's stable.
Mathematically it's stable for a certain period of time.
And then as you know a number of economists,
Marx, Keynes, have pointed out, is eventually
all these manias go up a lot and then they crash down.
- So there was heavy lobbying by the financial sector on
the government to ensure actually that this financial sector
growth could continue and governments believed that it was
in the interest of the economy because everyone told them,
monetarism told them, if you had all this liquidity in
the system then you must be growing your real economy.
But actually what was happening within that system rather
was that you'd freed up all this money which was then used
to bet on the increases in the value of certain companies
and certain shares and of money itself in the system.
And the people who were doing that betting were
not only profiting from it but they were also
the only people who were regulating the system.
So, it created a huge unstable and
an incredibly unequal system in which
the rich got very much richer really very fast.
- [Narrator] For decades, society has been
transformed into an enormous market to which
there's allegedly no alternative.
The huge sums earned by a few in the financial
markets scream for high returns and have
penetrated every corner of the globe.
New ways are constantly sought to expand
profits already in the trillions.
The world seems to be getting too small for all the capital.
(gentle music)
- When I was a kid, I couldn't afford to fly
in an aeroplane, I actually joined the air transport
industry before I ever flew in an aeroplane.
Today, people take flying for granted.
It shaped the way we buy goods, it shaped
the places people go to, it shaped the meetings
between people and different cultures.
Over the next 20 years we expect the world
to need 32,000 new civil aircraft,
passenger aircraft and freighter aircraft.
And we expect to sell a significant share of those 32,000.
At the moment, around one billion of the people
who live on our planet fly by air regularly.
The remaining six billion don't yet fly by air
and it's these people who will be tomorrow's passengers
and tomorrow's customers in addition for those of us
in developed countries who take flying for granted.
Clearly this means that the biggest scope
for growth is where the people are and where
the economic wealth is, the disposable incomes are.
So, top of the list come Asia Pacific, China, India,
Indonesia, southeast Asia followed quickly by Latin
America where we see strong growth and a little further
behind but growing strongly from a small base is Africa.
(mumbles)
You have to go to China to appreciate
how strongly China has been growing.
Beijing capital airport has become just
recently the busiest airport in the world.
And that growth will be continued with a new
Beijing airport as well as the growth in the major hubs.
A lot of growth in China.
(gentle music)
- We have delivered over the last six years more
than 100 brand new airplanes to the allies in China.
Ever year more than, in other terms,
around one airplane every three days to China.
The change is spectacular.
I can't imagine that when I came here in 1994.
On the street and you can see everywhere
full of bicycles today and if you look at
the street and very limited number of the bicycles.
That has changed very strongly.
- [Interviewer] You have more traffic jams today?
- Traffic jam is a real headache in Beijing.
A huge city like Beijing, there are too much cars.
Yes, it's another headache.
- Currently we have slightly more
than 200 airports in China.
And every year in the range of 10
or 15 new airports will be built.
The market is huge and we are
optimistic because with 1.4 billion population.
Imagine if everybody can afford the travel expenses
even a peasant with low cost business model,
a worker is willing to travel by air.
The market is fantastic.
You can't imagine and I already seen the sign of that.
That's why when I look at it, every time I'm
asked about the prospective of the market,
I cannot imagine the dimension of this market.
When I have the reference of 1.4 billion which
is even more important than the whole of Europe.
Every 15 years the world fleet will be doubled again.
In China, you don't need to wait 15 years,
seven, eight years, you get the fleet doubled.
It's quicker than in other parts of the world.
- [Interviewer] But more air traffic means more pollution.
What do you do about that?
- We made every single effort to try to reduce emissions
but if we look at the social benefits and to
the economic benefits that the aviation industry brings
to humanity, and then people may think differently.
We are trying to make the world smaller and smaller.
To make it a real village.
(gentle music)
(mumbles)
- [Woman] Copy that.
- [Narrator] For decades, growth was kept
on life support with debt.
Only a few had the courage to say that the party
couldn't go on forever but no one listened to them.
In September 2008, the time had come.
The house of cards collapsed.
- [Reporter] It's a black Monday
for the American capital market.
Despite dramatic rescue efforts over the weekend,
all efforts to keep the world's fourth largest
investment bank alive have failed.
Lehman Brothers is shutting its doors for good.
- It's also, I think, a necessary
part of the cleanup process.
Lehman we knew was weak, we expected it to go.
It's not going in the way that people
expected it to but it's gone.
- In the long run I'm confident that our capital markets are
flexible and resilient and can deal with these adjustments.
- [Interviewer] Just tell us how you're feeling,
it's awful I know but.
- It sucks.
- [Interviewer] Did you see it coming at all?
- No, I didn't.
- There was a deep shock in the system, there was
a sense of, my goodness, we can't let this happen again
governments have to have a better handle on this
system and for a while there were attempts to do that.
It lasted probably a matter of a few months.
In fact, by the end of 2009 and into 2010,
the very same companies that had been responsible
for some of that disaster were still engaging in those
same kinds of risky trading procedures that for
a while had been stopped in the wake of the crisis.
And we learned the lesson but then we forgot it again.
- [Narrator] The financial crisis was a huge
opportunity for governments to free the world from its
dependency on financial markets and to change the system.
But they wasted it.
Instead they did all they could to revive the old system,
spending trillions of dollars to save the banks.
Then something incredible happened.
The banking crisis miraculously became a sovereign
debt crisis, private debt became public debt.
Governments and their citizens were subjected to austerity
policies under which millions of people suffer to this day.
Banks and stock markets, however, were keen to demonstrate
a sense of normalcy as soon as possible.
In reality, nothing is as it seems.
Capitalism survived the crisis but no
longer functions like it once did.
- Even though it's not as busy as it used to be,
this is still the center of capitalism.
You can look at all the tourists who are
outside the building taking pictures.
They all still believe this is the center of capitalism.
It may not be as busy as before but it's a symbol
of something, it means something to them.
Here we have visits like when President Bush
came on to the floor and visited.
That's John Thain, the former CEO
of the New York Stock Exchange.
You're looking for growth, that's what all
of these people are looking for, how to grow their
companies, how to grow the economy, how to make more money,
how to employ more people, how to get people wages growing.
The whole game here is how to get growth,
how to employ people, how to keep the global economy going.
That's what it's all about.
Come on.
I'm sort of like the weatherman for the stock market.
I come in every day and try to figure out what's
going on in the stock market, I talk to trading desks,
I talk to analysts, I talk to people who know
a lot about the stock market, and I go on the air
and on the internet and explain what's going on.
So, every day I come in and try to figure out
which way the wind is blowing on Wall Street.
- Opening at $60.12.
- Congratulations, a big day for all of you.
Congratulations and, again, happy to have you.
Thank you very much.
This is my favorite part of my job.
- Watching IPOs.
- Watching people make money.
Watching capitalism at work.
Congratulations.
- Thanks Bob.
- So, remember the S&P 500, though, is now 1.5% this month.
We have very clear market leaders and
the reason we've had it is because better
prospects for earnings in the fourth quarter.
Remember what the market leaders have been?
Energy, tech, and banks.
Lagging today, energy tech, and banks, that's interesting.
Thanks guys.
- Hey, Bob, let me just change your.
- You can't come up and say, well, the markets
are just drifting around, there is no real meeting
of anything that's happening today, back to you Sue.
That won't make any sense,
nobody's gonna be interested in that.
Human beings want stories, they don't want an endless list
of numbers, nobody's impressed with a list of numbers.
They want to know what's going on.
Tell us in plain English what the markets are
doing and that's the real skillset and often that's
not easy because things are very complicated.
Hey, so what do you think's going on here?
Yeah.
Azure Power opened at 16.12, now trading at 15.29,
that's kind of a disappointment.
- Yeah, down 15%.
- They were very nice, though,
they were such wonderful people.
They all came from India to do the whole solar power thing.
- Oh yeah.
- They were all excited.
It was just a great moment to talk to them.
And they've been, they said they've
been watching CNBC for 20 years.
People have always claimed that capitalism
can be evil and capitalism doesn't help people.
I completely disagree.
What I see in the last 150 years is millions
of people have been lifted out of poverty.
I personally am a true believer and still believe that
the system works well and I'm committed to that system.
- Here's the news for the day.
Everybody love each other and quit screwing each other over.
Be a friend to everybody.
And don't forget just 'cause we're homeless
don't mean we're bad people.
- I think what we've seen over the last few years
is cracks in the shiny surface of capitalism.
And at first that's what they look like, you know,
they just look as though something not quite right
on the way the light reflects off it.
And as you look more and more closely, you see
that these cracks go right to the heart of the model.
They go right to the heart of the basic ideas of capitalism.
- [Narrator] Does capitalism still work?
Can the system deliver what it promises,
providing growth, jobs, and prosperity for all?
- [Narrator] Ever since the Industrial Revolution,
machines have been replacing human labor.
Thereby causing great societal upheavals.
But until recently, they have only
replaced the physical labor of humans.
Now machines are capable of doing what
makes us humans unique, they are able to think.
It's a completely new chapter in human history which
will have massive consequences on how we live and work.
- [Woman] Can technology think?
Watson can.
IBM Watson is a technology unlike any that's come before.
Because rather than force humans to think like a computer,
Watson interacts with humans on human terms.
You don't program Watson, you work with Watson.
And through your interactions with it,
it learns just like we do.
- Are you interested in talking about
how I express and understand emotions?
I can express emotions with my voice, gestures,
as well as becoming (mumbles) on my shoulders.
As you can see I'm a humanoid robot created by.
I am a sophisticated combination of hardware and software
designed to interact with humans and bring them joy.
- Thank you.
- [Narrator] In the future, algorithms and robots
will be able to carry out nearly every routine
task previously performed by humans.
Millions of jobs will vanish.
These new technologies do provide economic
growth but not much in the way of jobs.
And that could endanger capitalism itself.
Who will be able to purchase all the nice
things mass produced every day when there are not
enough people who can pay for them with their wages?
(gentle music)
Are we all passengers on a plane
whose navigation system is broken?
Are we still in control of the system?
Or is it controlling us?
(gentle music)
In financial markets, algorithms have
long since been running the show.
Computers interact with other computers
in fractions of a second without any human input.
And sometimes they do things that were not planned.
Like in the flash crash of May 2010.
- [Man] Wow, almost 1,000 points.
We call this a capitulation.
They're gonna probably halt trading.
We can't stop the selling.
- The flash crash was an incident in which markets
essentially disappeared for a few seconds.
The whole event took maybe 40 minutes but there
was a moment during this massive stock market decline
which was not triggered by any particular event.
There was no news, there was no dramatic change
in economic conditions or corporate fundamentals.
It was simply a positive feedback loop kicked off
within a complex system that fed upon itself and suddenly
all of the computer systems that were looking at
the same signals in the same ways all reacted at
the same time and withdrew their orders from the market.
As the market continued to drop and risk limits were
being hit and programs were reacting in unexpected ways,
you could see them getting more and more frantic until
at some point the head of a firm came running out onto
the trading floor shouting shut it off, shut it all off!
And we just started hitting control C and killing
programs left and right and any keyboard you could find
you killed the program that was running and you know as
you watched the market you could see the exact same
thing was happening on every other trading floor
because orders were just disappearing out of the market.
It was that moment where you're sort of staring
into the abyss and you're saying to yourself,
what's gonna happen now?
It doesn't make any sense that there's nothing economically
that would explain why a market would just be gone.
The modern financial market, it has become
what would be called a complex adaptive system.
Humans cannot control complex systems.
That's the fallacy of how we approach regulation
and oversight of a complex system.
It can't be done because we can't understand them.
There's too much going on.
- [Interviewer] Do you think we have
lost control of the system?
- I don't know.
Have we lost control of the system?
Maybe control is overrated.
Maybe it's okay to not necessarily be in control
provided the economy is working for everyone.
Now I don't think it's working for everyone.
The economic system is not functioning as
it should and the benefits are not accruing
to as many people as they could be.
- [Narrator] The flash crash also came
and went without consequences.
In fact, the capital turnover rate
has accelerated since then.
Today, computers interact in nanoseconds.
A nanosecond is a billionth of a second.
- In this room, that's what we do here.
We have an on off switch, right?
There's really no human intervention.
I really don't believe in leaving the room
and letting something trade unattended.
It's about being there with the creation
that you've worked on.
Even if I don't, you don't control it, but you watch it.
Is it doing everything that you designed it to do?
I really don't interact with economists
and policy makers so I'm gonna have to say
there's really not much of a connection.
I mean if there was a strong connection between the two,
you'd think that firms in my space would have need
for people with that kind of economic background.
As I said, you now, who do we hire?
We hire scientists, technologists, and lawyers.
We don't hire MBAs, we don't hire economists.
There are many mathematical models that come out of fields
such as horse betting that are used in our business
as kind of fundamental pieces of algorithmic trading.
We somehow project in our capitalist society
this idea that this is a safe environment
for people to build up their retirement on.
It's actually a hyper competitive environment
and you know depending on the product there's,
sometimes I feel safer going into a casino
than trading certain products in our space.
I mean, you know, so this idea that markets
are somehow going to support a very, very large
base of the population and kind of produce returns
for them when in our space all we do is try
to eliminate those returns, I mean that's the job.
It is a very different world than the way
it's advertised to the general public.
- [Narrator] Financial markets are out of control
and no longer have any connections to reality.
While algorithms and robots produce growth,
they only provide work and prosperity for a few.
And it's this growth that's destroying
our future on the planet.
The signs that something has gone wrong with
our system have become impossible to overlook.
So why do we consistently ignore them?
- Even though ordinary people actually don't
have so much trouble with the idea that you can't
go on growing on a finite planet, actually most
people get that because it's very, very basic.
There is nonetheless a political consensus
and an institutional consensus for which that vision
is incredibly important, it's incredibly deeply embedded.
And so what you have is it's almost like a kind
of collective schizophrenia that on the one hand
we can see the blindingly obvious, it's staring
us in the face and it is at one level
something that even my kids, schoolkids, can get.
You just don't go on growing and growing
forever when you're in a finite place.
And the only mechanisms from biology or from nature that
we see that do that end up basically killing their host.
- This is for TV right, I got to go the debate in Las
Vegas and I have to do my show from out there so this is,
the network puts all this stuff together for me.
I'm dressing a lot better now than I was before I did
television because they even hire you a stylist.
You know what I mean?
You guys look like shit so you obviously
don't know what I'm talking about.
This is some really nice clothing.
Alright come on, come on in.
- [Man] The most powerful name in financial
television Wall Street week is back.
- You have some news?
- Skybridge actually purchased
the rights to Wall Street week.
- [Man] Skybridge Capital and its managing partner Anthony
Scaramucci are reviving the iconic Wall Street week program.
It's a show about money developed
by people who work in money.
- I view myself as a capital artist.
This company that I've created is my canvas.
I know you guys in the media don't like capitalism but you
know someone's had to pay for the camera and the microphone
so I mean at the end of the day the capitalist system is
the only system that we've been able to design that works.
Wall Street is still whether people like it or not, it's
part of the participatory engine to financial growth.
Let me just give you a perfect example,
the American fracking process, the technological
solutions created, you then need to mobilize
capital into that solution to create the energy.
Now some of the environmentalists don't like it
and okay we can have a huge debate about that
but at the end of the day this was an innovative
idea that's unleashed a tremendous amount of surplus
energy that the world didn't expect 15 or 20 years ago.
Let's talk about growth okay.
There is a perception right now in these elitist
academic salons that we're not gonna grow anymore.
Well, that's just flat out wrong.
If you study 5,500 years of human history,
we know that human beings are designed to have
great intellectual curiosity and to innovate.
There are so many things that we're gonna do
over the next 50 years that's gonna shock everybody
in terms of our capability.
We're gonna pull asteroids down from the asteroid
belt that are loaded with platinum that will
probably be where the first trillionaire comes from.
We're gonna unlock the ability to stop aging
or to destroy cancerous cells in our bodies.
All of this innovation is ahead of us
and there's tremendous opportunity for growth.
You're gonna grow as long as you get the tax policy
and you get the economic regulations right and you
create the incentive to grow and you send a message
from Washington that we're open for business.
You want to see three percent growth, four percent growth,
you gotta change the academic view of this stuff and talk
to real time practitioners that understand how to grow
businesses and create innovation in the economy.
There will always be growth on the planet,
there will always be a jagged line upward
for human beings because that's been the case
for 5,500 years and as long as we don't blow each
other up with nuclear weapons it will be the case
for the next 5,500 years.
- There's a sense of desperation to this strategy.
There's a sense of having, you know, for a decade
or so recognized there might be some limits
to our ability to continually grow this system.
And now, you know, we're tired of that idea.
We don't want to be so realistic in the world.
We would much rather have a total fantasy for our
guiding star, we would like to have this vision that no,
we don't have to think about curtailing growth, we have
to think about making growth even stronger, we have
to go harder for it, we have to make America great again.
We can all be billionaires,
we can all have property empires.
And of course it's an illusion.
And it goes back to exactly that same
simple basic fact, we live on a finite planet.
There isn't the space for the dream
of this reinvigorated growth fetish.
- [Reporter] This is a round trip for Donald Trump.
- [Narrator] We live in extraordinary times.
Our world is becoming increasingly complex
and many are disappointed to find that they
are worse off than they used to be.
But instead of doubting the economic system,
they turn to those who have profited from it the most,
those who continually promise new growth.
For these empty promises, more and more people
are apparently willing to sacrifice democracy,
peace, and the environment.
Capitalism has reached a new level of escalation.
But it's no longer suited to the world we live in.
It's end is closer than we think.
(gentle music)
- [Interviewer] Are you an optimistic
or a pessimistic person?
- I don't know that I've ever reflected on it.
You can't do this to me at this point in an interview.
Am I an optimist?
Yes.
Optimism is an act of will.
Optimism is what a football team has to hold to the very
last minute even if it's a goal behind if it wants to win.
And I think Gramsci once said it's pessimism
of the intellect, it's optimism of the will
and this is not just a snappy thing to say,
it's actually the most constructive thing to say.
We gain nothing really from pessimism and we
gain everything from being optimistic about the future.
(up tempo music)