hi uh i'm nikan david's wife um and this is an event in corner in the owner of the first
anniversary of david graber's passing and in the spirit of his rejection of academic arrogance
and our urgent need to get out of the crisis we are in we set up the art project
fight club welcome to the first one of the series today we're talking about what is that the next
one will be about the nature of money david was probably the most famous anthropologist of our
times and the best-selling offer even still he had a food in his computer called nightmare in which
he dumped all bills bureaucratic papers invoices and papers of his academic achievements he regards
the idea of isolated individual as a myth what interested david much more was a dialogue
he believed that it is only in dialogue in the class of opinions where answers are formed and how
human consciousness is born we humans according to david are the product of our social relationship
that's why it was so important for him to be involved in a situation in which
people think and act collectively and david grabber foundation will follow the same path
so we have several projects lined up from collective education of his archive to publishing
the anthology of the fight club starting from the first debate between david greber and peter thiel
as fight club official cheerleader i urge our fighters to be emotional provocative and bold
because the questions that we'll discuss concern us all if enough of us will change the way we
think about what deb mean then the social design of our society will change i'll change along with
this so this is just that as david described what a revolution is a change of common sense
and the collective imagination and david argued that the main achievement of the paris commune
despite a defeat had been the transformation of the common sense about how we live together
so most of what we consider ordinary in our cities public transportation street lights
public schools the eight hours work days and even the not yet achieved equal pay for women and men
originated in the paris commune and it was then considered to be a social madness
so the same can be said said about occupy those 10 anniversary we celebrate it now just as we
celebrate david's life occupy didn't take over any territory he didn't have leaders and government
but it did change the public discourse it's become important to talk about equality poverty and that
so after after occupy we'll look at the world differently speaking on death the position of
our fighters today are radically different we want to i want to express my immense
gratitude to thomas piketty who replied to my email although we didn't know each other
and agreed to participate in this debate i also want to thank michael hudson who came up with them
many of the ideas that david graber built upon in his book 5000 years of death and i really hope
that this debate can radically change the way we think about the world and what else could be more
exciting so i passed to liam who uh thank you for agree to moderate his discussion
well it's my great pleasure and it's wonderful to welcome everyone from all over the world uh we
share some commonalities in our human experience and one of them is that we tend to come into the
world most of us sort of under-capitalized for the experience so in a sense most of us are united in
debt and that's why it's especially exciting to have two such brilliant thinkers help us unpack
this difficult subject from the suitcase where we like to push it way into the back of the closet
today i'm very delighted to welcome my friend michael hudson he is a distinguished professor
of economics at the university of missouri kansas city he's also a researcher at the levy institute
at bard he's a former wall street analyst and a frequent commenter on economic matters and
historical matters he's written extensively about debt and as you just heard from nika his work was
a great inspiration for david graber he can also tell you more about the ancient sumerians
than you ever dreamed of knowing so hopefully we get to hear a little bit about that today
uh welcome professor hudson and welcome also to tomati he is the um professor at the e-h-e-s-s
and the paris school of economics and he's also the co-director of the world inequality lab
uh you know him for going viral with his books telling us why most of us don't have any money
of course there was his smash hit capitalism in the 21st century and more recently which you must
get if you haven't read it capitalism and ideology uh welcome to you professor pikati and we'll start
out having each of you tell us uh your thoughts about debt your position on the topic and you'll
have about five minutes each and uh i think we'll start with you professor hudson i thought we're
going to let tom go first otherwise it's going to be fine all the things i agree with that he
wrote and let him say what nobody wrote that's fine with me thomas would you like to go first
uh yeah whatever is it's fine i mean so okay let me say a few words first let me you know
thank you for organizing this and and you know i was very you know when i received nika's email
you know i felt you know where you know i felt very emotional because you know i
remember very well the discussion we had with david grubber back in 2013 in paris which was
right after my book capital in the 21st century was first published in french it was not yet
available in english so david has not read it but i had read this book and on that um the first ten
thousand years and and um and and this was you know this was for me this was really a very um
you know powerful reading and this made me think a lot maybe this was not so visible in capital
in the 21st century because i had written it actually before i i could read david's book but
but you know to me this was this was really a major and this is a major contribution
so what about that let me simply say that you know there will be in the future there will be again
other debt constellation massive debt consolation so you know there are long cycles about that which
which of course david uh talks about when we go back to ancient history or to sumerian times and
as michael has has been has been working on and so you have this long-run cycle but you also have
you know a short more short-run history of of that consolation a more medium-run history if you want
and i think it's very important to to remember in particular that you know after uh you know there
are two modern episodes which i find particularly striking in terms of getting that back to zero
or at least you know concerning a big part of that the french revolution of course is a very
important example so you know this was a time when the basically the political system did not
manage to make pay those who should have paid for the public spending which was the nobility
so there was a fight flight toward that because people who should have paid the tax managed on
how to escape and the solution was the french revolutions and the fiscal privileges of the
aristocracy the conservation of that through partisan inflation partly through taxation
and that's sort of one modern episode the other modern episode which i want to to refer to is of
course uh after world war ii uh you know after you know in 1945 1950 most rich economies had
public debt which were enormous you know even even bigger than than today and they made the choices
you know the political choice through you know very conflictual social movement political fights
in the end the choice was made collectively not to replace his debt so this happens in various
ways you know inflation in some cases but but some countries like germany in particular
which is viewed today as as very conservative in terms of economic doctrine and ideology and which
in many ways is very conservative we'll see after the election in a few days but
you know it's still going to be quite conservative probably in any case but in fact after world war
ii developed applied the solution to to get rid of the debt of the past through
a monetary reform and through progressive taxation of very high wealth holders in order to in effect
compensate the lower wealth holders for the uh for the monetary reform and the the loss of links that
was implied by military reform so that in the end i mean this is not job this was certainly
not a perfect system but as compared to all other ways of getting rid of past that you know this was
certainly one of the one of the most equitable or at least or the least unequitable way to
to address the problem and you know i think we will have we will have other episodes like this
in the future so nobody knows the form it will take you know the kind of political mobilization
you know occupier was was was an important episode there will be other you know there are other you
know social movement tax revolt you know if you think of the yellow vest movement in france a
couple of years ago which was a major tax level to get rid of a very what i think was a very uh
an equal project to raise the carbon tax basically on the poorest group in society and and there will
be you know to address uh climate uh challenges but also you know all sorts of social and
developmental uh challenges uh we will we you know societies will have to to to to find ways of of
getting rid of their debt right now we have this illusion that you know we can just take it on the
central bank offer and and forget about it but you know i think it will be more conflictual and more
less peaceful than this because it's always a matter in the end of redefining
a power relation between different social groups so it cannot be completely peaceful it involves a
conflicting social interest it involves different groups of people with different agenda and you
know in many ways we have we are in a situation which is not i think completely different from
the one at the time of the french revolution which is at the you know those who those who should pay
have somehow managed to design a legal system and a political system so that they can escape
taxation and and at the same time middle class and lower class people are you know fed up of paying
the bill for them and so and so the solution is more and more debt but you know at some point
there will have to be something else will have to happen and i think it will be roughly the same it
will have to be roughly the same solution as it was you know 200 years ago which is the end of
fiscal privileges of a small group in the population that has that has managed to
escape taxation for for for too long so that's okay that's a sort of initial uh
initial perspective and and that but you know of course i'm very interested to hear michael
and continue the discussion thank you michael it's uh floor is yours okay well i certainly
appreciated uh the the book that you published on the uh accumulation of uh wealth and how it's
concentrated in the hands of the uh one percent i think everybody knew intuitively that this was
the case but uh economists being who they are they don't really accept something until it's
all there in statistics and uh you you did uh just a wonderful job in tying together uh all of
these statistics and uh showing how the degree to which wealth is uh the one percent of concentrated
wealth in every country and you also made i think the most important point where you said what's
caused this and you came up with the broad answer that i agree with you said that financial returns
exceed the overall rate of growth and if financial returns exceed the overall rate of growth of
course you're going to have the rich getting uh richer uh and richer uh and i think the reason
uh where we uh uh have a different approach is how do you explain all of this well uh when your book
came out a number of writers said well this is uh uh the marks of the uh uh 20th century and uh uh
you showed that there was an abrupt turning point uh in 1980 and uh everything had been changed
there and i think the one percent looked at your statistics as a success story they said yep we're
really uh doing better than everybody else and as uh the head of goldman sachs said that's because
we're so uh productive uh but i think the reason your book was praised so much uh in the west is
you didn't come up with a threatening political solution uh and uh when they said this was the
mark book is the marks for modern time that meant don't read marx read this book and i suspect that
after you put all of this enormous good work into the uh statistics that you did on wealth
and income i think the publisher probably said well what are what are your solutions well you
just came up with uh the solution that you uh said in the book and that's to tax income and wealth
uh this is not a threatening solution because there's no way that you're going to tax wealth
as long as you have offshore banking centers to conceal wealth as long as you have what the oil
industry put in place a hundred years ago the flags of convenience pretending to make their
uh income abroad the fact is uh the one percent don't really make much income they're ideal if
you're a billionaire you want to do what uh half of american corporations do you don't make a penny
of taxable income uh that that's uh the whole problem so i want to go into what uh your
book was not about uh i'm not criticizing you for not writing a different book but
it's what i write about and that is why what is it that has created this uh uh disparity
and why is it widened so much since 1980. well the most obvious reason is uh interest rates
reached a peak of 20 in uh 1980 and they've gone down ever since well in the late 1970s uh my old
boss's boss at chase manhattan paul volcker said let's raise interest rates to very high
because the 99 are getting too much income their wages are going up let's uh raise interest to slow
the economy and that will prevent wages from going up and he did and that was a large uh reason why
carter lost the the election to ronald reagan interest rates then went down from 20 to almost 0
today the result was the largest bond market boom in history bonds went way up in price the economy
was flooded with bank credit and most of this credit uh apart from going into the bond market
went into real estate and there is a uh symbiosis between finance and real estate and also between
finance and raw materials and also like oil and gas and minerals uh extraction natural resource
rent land rent and also monopoly rent and most of the monopoly rent has come from the privatization
that you had from ronald reagan margaret thatcher and the whole neoliberalism uh if you look at how
did this one percent get most of its wealth well if you look at the forbes list of the billionaires
in almost every country they got wealth in the old-fashioned way from taking it from
the public domain in other words privatization you have the largest privatization and transfer
of wealth from the public sector to uh the private sector and specifically to the financial sector uh
in in history uh sell-offs and all of a sudden instead of uh infrastructure uh public health uh
other uh basic needs being provided at subsidized rates to the population you have uh privatized
owners uh financed by the banks raising the rates to whatever rate they can get without any market
firing power uh in the united states the government is not even allowed to bargain with
the pharmaceutical companies for the drug prices so there's been a huge monopolization a huge
privatization a huge flooding of the economy with credit and one person's credit is somebody else's
uh debt so you you've described the one percent's wealth in the form of uh savings but uh i focus
on the other side of the balance sheet this one percent finds its counterpart in the debts of the
99 so the one percent has got wealthy by indebting the 99 uh for housing that is soared in price 20
uh just in the last year in the united states uh for medical care for uh utilities for education
uh the economy is being forced increasingly into debt and how how can one uh solve this
taxation will not be enough the only way that you can uh actually reverse this uh
concentration of wealth is to begin wiping out uh the debt if you leave the debt in place of the 99
uh then uh you're going to leave the one percent savings all in place uh and these savings are
largely tax exempt uh so basically i think you you uh left out the government's role in this
wealth creation of the one percent so your finance has indeed grown faster than economy
absorbed real estate into the finance insurance and real estate sector the fire sector finances
absorb the oil industry the mining industry and it's absorbed most of the government so the
financial wealth has spilled over to become essentially the economy's central planner
it's not planned in washington or paris or london it's planned in wall street the city of london
and the paris ports the economy is being managed financially and the object of financial management
isn't really to make money it's capital gains and again as your statistics point out capital
gains are really what explains the increase in wealth you don't get rich by saving the
income rent is for paying interest income is for paying interest you get rich off the government
basically subsidizing an enormous increase in the value of stocks the value of bonds by the central
banks which have been privatized and uh the reason that this is occurring is that uh the largest
public utility of all money creation and banking is left in private hands and private banking
in the west is very different from what government banking is in say china government banking would
create credit for public uses for what the economy needs to grow in the united states
and throughout the west banks create credit to slow the economy from growing they make
loans only not to create new means of production new factories and uh they create uh they make
loans against property already in place mainly real estate already in place 80 of bank loans
in america and europe are for real estate uh they make loans for corporate takeovers uh they make
loans to buy other companies they don't make loans to build new factories which is what a government
creation money creation in say china china would do so as long as you leave banking and credit in
private hands you're going to have banks trading their product debt and the more debt they create
the more debt service that the borrowers the 99 have to pay the banks in order to obtain a house
or an education or medical care or just to break even and the more money they pay to the financial
sector the less they have to pay for goods and services so as the economy polarizes between the 1
and the 99 the economy as a whole shrinks because more and more of its income is spent not on
production uh and consumption it's spent just on bit service so my solution is you have to restore
banking and credit in to public hands to prevent the kind of lending that makes asset price
inflation secondly uh you talked about taxing some taxes are more important than others i don't think
that as long as there are as long as the banks and the financial sector write the tax codes
as long as the government lawmakers are basically employees of the financial sector who finances
their political campaigns uh you're not going to be able to tax them or to close down the fake uh
transfer pricing that corporations use to pretend not to make money so uh you have to tax
the source of uh the money that pays interest to the banks itself and that source is mainly
economic rent it's land rent if you would have a tax on the increase in land values if you'd have
a land tax which is what the whole 19th century was about adam smith john stewart mill uh marx
then if you would not have this uh increased rent being paid to the financial sector to be
monopolized by the one percent uh so you you'd have to change the the way in which the tax code
is based away from just overall income and wealth which is really not very practical in today's
political situation you'd have to have a land tax and a natural resource tax and to get rid
of monopoly rent you have to return basic key uh infrastructure to the public domain where
it was before 1980 so that uh basic needs can be supplied at low prices not uh creating monopoly
for uh the one percent uh and i guess i'm saying you have to realize that finance has used as well
to take over the economy and this has to be reversed uh because uh once you have
uh wealth taking the form of uh claims uh loans and claims on other people's debt
we'll count you up compound interest any rate of interest is a doubling time and compound interest
is always going to grow faster than the economy's real growth and the only way to prevent this isn't
simply to lower the interest rate which you've done today 0.1 uh the only solution is to wipe out
the overall debts that are stopping economic growth and these debts are the savings of the
one percent the good thing about cancelling debts is you cancel the savings of the one percent
and as long as you leave these savings in place there's not going to be a solution
thank you so much michael and tomah feel free to respond to this idea of uh canceling debt yeah
you know i i i don't feel like we have any major uh disagreement about you know everything you just
said michael uh let me say also regarding you know my book capital in the 21st century you know it's
a book that has lots of limitations and and you know i have on many issues you know i've tried to
to to to make progress since then so this was written 10 years ago i wrote capital
and ideology much more recently which i think addresses some of the shortcomings
but this is and still this book has also a lot of limitations so you know i'm trying to
make progress all the time and i certainly don't pretend that all the answers are in
you know one book and that being said i think you know many many things that you've mentioned you
know again i fully agree with that i as i said you know the consolation of that is is is very
important because as as you very well say the the part of the increase in private wealth at the top
was really made um through you know privatization of public assets increase in public debt
you know there's one one statistic which i which i stress a lot which is that if you look at the net
wealth of the public sector uh you know the net wealth of the government so government assets
minus government debt it used to be you know in the 1970s net public wealth was you know between
20 30 percent of total national wealth so you know net private wealth was bigger you know was like 70
or 80 percent but still net public waste was 20 30 percent in germany in the u.s in france in
britain in japan so that was you know substantial part of everything there was to own in terms of
of marketable assets in society belong to the public domain you know say around one quarter
or between one quarter and one third today so you know three four decades later it is uh close to
zero or actually negative in in in the u.s or in the uk in the sense that the public debt is bigger
than the public assets because many public assets were privatized and and public debt increased
and you know in effect there was a transfer of public wealth uh two to private wealth holders
and that's a you know that's a very important evolution which you see the most extreme case of
course will be russia and post communist country where you know you just transfer all the public
wealth and you make oligarchs out of nothing but in fact we've all you know all countries have had
this kind of trajectories over the recent decades so that's really an important part of the story
that i've been trying to tell so you know again i i don't think we have any disagreement on this
at an even broader level you know it's it's all about power and and political institutions so
as you said you know as long as the system of of political finance and you know parties and
campaigns and media and think tank you know are largely controlled by by large wealth
holders you know our collective ability to change the distribution of wealth and the
you know through through taxation or that consolation and or what you know whatever
the method is going to be limited so it will take major political fights and in some cases you know
changing the political rules of the game and the political institution to to to changes and and
you know the good news is that this has always been like this or this has always
and and still sometimes you know it has worked in the in the past but it has worked you know
i mentioned the french revolution you know of course that's a huge popular mobilization uh also
in the 20th century i mentioned after world war ii after world war one well let's be clear it's
only because there was a very powerful uh you know labor movement a socialist movement and communist
counter model in the east which in the end put pressure uh on the on the uh and you know and on
the in effect and the elite governing elite in in in the west so that they they they had to accept
a number of decisions you know which which were limited in their scope but still which transform
the economic and social system in in a very substantial way as compared to the pre-world
war one and 19th century economic system but it's only through this enormous political mobilization
and collective organization and you know it will be the same in in the past so just one last point
you know you mentioned the case of china and you know i think the chinese counter model can can
contribute maybe in the future also to sort of put pressure on the west to to to change the system
also at this stage you know we are not um you know the the big difference of course with the soviet
counter model is that the soviet control model you know you had a a sort of a narrative and a
proximity between socialist and communist party and the labor movement so that
in effect the elite in the west felt threatened by the by the by this counter model and this
contributed to reinforce to some extent uh until a certain point of the labor movement in the in
the in the west well until the final fall of the soviet union which of course reinforced a lot uh
you know capitalist ideology and and and everything we've seen since then
the chinese model you know you mentioned the fact that the banking system is working a bit more to
the service of the real economy and infrastructure and investment than the banking system in the west
but by and large you know the chinese model you know looks more and more like
a sort of perfect digital dictatorship and you know nobody really wants to
to to copy this and you know apart from other government elites you know would like to to to
you know to keep quiet their population and their grassroots movement as efficiently as
the beijing regime is doing but apart from you know no no nobody in the world you know
no no collective movement in the world wants to wants to look like this so this also limits the
the the sort of the pressure that this this contour model can can put on
on on on on the on the west but you know at the end of the day i think this can be one of the
fourths which still can induce uh for instance you know when we talk about the taxation of
multinational in 2021 which uh you know what has been decided by rich countries you know is very
limited you know they claim they have solved the problem of multinational taxation but it's it's
a bit ridiculous how little they have done the minimum tax rate of 15 percent is ridiculously
small and also it's only sort of sharing sort of rich countries are sharing between themselves you
know the tax base that is currently in tax haven but countries in the south in the global south
basically don't get anything and i think that's an that's an issue that's something an area in which
the pressure of the chinese counter model in the future maybe will contribute to induce
rich countries to to to to to to to have a bit more you know inclusive attitude towards the
the south also well if they don't do it i mean you know if they don't do it
in effect china will finance the investment and the infrastructure investment that is needed in
africa and in south asia and and that's that's you know this is at some point you know fully uh
western countries will realize that they have to change something otherwise they will just lose any
any influence and any capacity to influence the world yeah okay so this is getting us very far
from the initial discussion but uh i hope this is still more or less relevant michael
feel free to respond well it would not surprise me if we end up in agreement uh with what to do
uh and i realized that uh uh you wrote your book about your topic and i wrote my book about what
to do about it i just want to uh point out where i think we do have i have a disagreement uh my point
is that compound interest is always going to grow faster than the economy's uh real ability to grow
so in the end debts can't be paid right now you see a lot of third world debts that uh if the
third world better countries have to pay uh their foreign debts under as the world economy slows
down they're going to be subject to austerity to the world banks and the imf's austerity programs
and they're going to be kept in poverty uh is it really right that they should be kept in poverty
just to enrich the bondholders of the one percent the one percent will say yes that's why we're
the one percent so that we can impoverish other people that's our liberty our liberty
is the right to impoverish other people and reduce them to dependency uh that will happen if you do
not write down the debts uh it's already happening in the united states to the student debt uh crisis
where students uh have to pay so much money uh as they fall behind on their student debts that they
can't afford to take out mortgages to buy homes uh and you're having the home ownership rates
plunge in the united states that's the result of leaving the debts in place uh the mortgage steps
uh uh are causing shrinkage so there is no way to get out of this economic polarization without
a debt write down and that's something that is too radical and uh uh when we talked about
when i was referring to what china's doing i'm referring to what it's doing today and tomorrow
about uh the uh real estate company evergreen uh uh china has a choice is it going to leave
evergreen's real estate debts in place and every grand uh as a real estate company is two to three
percent of the entire chinese economy if it pays the foreign creditors and the domestic
one percent of china it's going to impoverish the uh the employees of evergrand it's going to make
housing prices more and more expensive in china china has had a debt finance housing boom uh
if you leave the debts in place then uh you're you're going to impoverish china and obviously
china is going to say i'm we're not going to put the creditors first we're not going to do what
the west does and say the sanctity of debt service debts are uh that you owe or sacred uh it's worth
sacrificing the economy it's worth plunging the economy into poverty just to preserve the wealth
of the one percent i think china's uh is going to make the opposite decision and say we're not going
to commit political suicide we're going to operate for it's a socialist economy and when it comes to
debt and credit thank god we have our banking in the public domain and since the public domain the
people's bank of china is the creditor they can afford to write down the debt without having any
political backlash because it's cancelling that so do itself uh which is a great advantage uh and
it's also uh as for the private bond holders uh it's going to say well sorry bondholders you made
loans to a company that was way over leveraged uh already uh the american bond rating companies
have reduced their bond rating to chunk so you knew what you were buying if you continued to hold
bonds that uh fitch and other bond raiders moody's all say or junk and you lose your money well
you took the risk you got a high rate of interest now you're you're paying the price
that's how markets work uh and uh that really uh is the argument and i think uh you have to
uh obviously what i'm suggesting is a radical step just as you're suggesting of taxing wealth
would require the radical step of closing down offshore banking centers of simply negating uh if
banks would simply erase all of the deposits they have from the offshore banking centers from
the cayman islands from from panama from uh from liberia to all the places that began by to be set
up by the mining companies the oil companies and then were set up beginning in the 1960s
essentially by the cia to finance the vietnam war by making america
like england the home for criminal capital for flight capital all this uh all this flight
capital and the kleptocracy that you mentioned in russia all this really should be wiped out
and if you leave this capital if you leave this one percent in place the economy is going to be
sacrificed and shrinking is it worth shrinking the economy just to leave the one percent in place
and if you challenge them that's pretty radical that's really what i think marx would say today
um thank you and i i wanted to just pitch a question to you all before we turn over
it over to some questions from the audience um you've both mentioned it's it's not the elephant
in the room it's sort of the tyrannosaurus rex in the room i think tomorrow as you put it those who
should pay design the system uh you both have commented on this enormous problem that we have
every time we have good ideas ranging from just a tiny little tax on the rich you know to the
more radical ideas that michael is suggesting we run up against this tyrannosaurus rex so
where do you all see the most effective pressure points coming from right now um
in terms of getting anything accomplished on debt where where
is the effective mobilization potentially coming from or that you see developing now
maybe let me first say you know we need that consolation you know we need a regular debt
consideration i i i don't think at all this is a radical or too radical if anything you know i
think this is not radical enough because i think in addition to that cancellation we need also
to redistribute the assets to redistribute wealth and so when i'm talking about taxing
wealth it's also redistributing wealth so giving wealth to people who don't own anything so it's
not only counseling their debt it's also giving them positive ownership rights in
companies in housing so so yeah we i think there's not really no no disagreement on this
now what about you know the the pressure that will come well two things first you know i
think the the real problem is the system of free capital flow so you know the idea is that you can
um you know we have created an international legal system where in effect we have sacralized
we have almost sacralized right you know to to you you accumulate wealth in a country using the
public infrastructures your education system you know the health system of your country and then
you can push on a button transfer your assets you know another jurisdiction and nobody knows where
you are nobody and but you know there's nothing natural in this system this was made by a set of
international treaties a particular legal system and and that's just not this can we so individual
countries i think you know i have to get to get rid of that and so in the case of europe you know
you cannot wait for unanimity to get rid of that so individual countries have to say okay you know
i'm not against the circulation of investment and capital goods but it has to come with
a common taxation with common regulation common rules you know this cannot just be like this you
know you push on a button we don't know where you are so this has to to to go uh um so you
know some proposals that was made by like bernie sanders in the in the presidential campaign in
the u.s last year early last year this seems like ages ago but this was only 18 months ago you know
when he said okay we you know you can if you want to escape my federal wealth tax you can go away
but then you will have to buy a 40 percent exit tax you know you will have to to keep 40 percent
of your assets in the us if you want to go ahead you know that's clearly a big change as compared
to free capital flow and but that's the kind of change we we need to you know we need we need to
we need to consider so how is this going to happen well first we need to realize that you know the
free capital flows treaty agreement which came a lot actually in fact from europe in the 1980s but
also from washington of course but it was a co-production if you want with this has to
go and individual countries have to to escape that other other source of change and pressure
you know i think climate change is going to put a strong pressure in the sense that you know i
think when people see more and more catastrophic climatic events you know i think attitudes toward
globalization and attitudes toward inequality in general you know can change very quickly because
you know at some point i think people will not find it funny at all to have all these
billionaires you know giving lessons using their private jet doing your space tourism
et cetera you know at some point you know i think nobody is going to find this funny at all and
there can be a very quick and and fast you know complete change in attitude following this and you
know i think the chinese sort of counter model with all its good and bad very bad sometimes
aspects can also be a factor of change thank you uh michael would you like to respond to that yeah
i don't see a change within the existing system i guess that makes uh me radical uh uh
thomas did not mention the main point that he made in his book which was uh his number one suggestion
was tax inherited wealth because most wealth is inherited that's one of the things that he's found
absolutely right great idea sam simone uh the great french economist had this idea
when the very first book he wrote around 1806 it made him very unpopular and he soon realized
that that's one there was no way of doing that uh from some simone on to the entire 19th century of
british political and french political economy they all agreed uh with smith and the others
you have to uh there's a landlord tax the the one percent in their day were the landlords you
have to tax away the land rent and make that the public uh tax base not income not taxes on
consumer goods not taxes on capital because you want good capital investment you want fortunes to
be made in a good way that add to the economy's productivity you don't want them to be made in
a predatory bad way uh the whole fight to tax economic rent and to even recognize that most
income is unearned when you talk about the uh income disparity almost all this disparity is
unearned income it's economic rent it's not income that's made by increasing uh production
it's not income that's made by increasing living standards it's just predatory rent seeking from
special privileges that the wealthy have gained from government and today it's not the landlord
class anymore as it was in the 19th century it's the financial class and the raw materials class
uh and uh without dealing uh with this uh cl structure i don't uh the system is going
to shrink and shrink and we've seen this before we saw it in rome the same kind of polarization
and concentration of wealth in the roman empire well the last stage of that is feudalism so we're
back to what rosa luxemburg said the choice is between socialism and barbarism basically and uh
there's no other way to do it you can't solve the problems within the existing system
because it's controlled already by the one percent thank you michael and uh i'd like to
toss out a couple of questions from the audience now uh we have a question about energy uh
one viewer asks isn't energy as much a source of value as land should we have progressive taxes on
energy use as well or instead of land value tax uh first of all land doesn't have any value nor
does uh energy have any value we're talking about economic rent so part of the financial sectors use
part of its uh uh income to uh subsidize business economic schools and universities to change the
vocabulary our vocabulary is different from the realistic vocabulary that we have in the 19th
century land doesn't really have a value nature creates it a value is created by people working
and creating it but nature provides other land and the public sectors spending on infrastructure
creates the rent of locations which increases land prices nature provides other oil so uh economic
rent is what we're talking about and this economic rent of land and oil and minerals and monopolies
belongs in the public domain so that you don't have to have an income tax and excise taxes
and value-added taxes on labor uh and industry you should tax the rentiers not labor industry
that's that's what a free market meant in the 19th century and it means inverted today a free market
is the right for the rentiers to avoid taxes and shift the entire tax base onto labor and industry
and they do this by twisting around and perverting the english language to get rid of the analytic
language that you need to even explain how some in most income and most wealth is unearthed
uh how about you tamar do you think that we need to clarify how we talk about and define value
yeah well you know in the case of energy first we have to clarify the fact that you
know there are some sources of energy which which create a negative value because of
of of global climate change and climate working and warming and you know all the negative
external effect of using some energy so we have some to make some of the energy uh sources just
illegal you know we have to keep some of the oil in the ground we have to stop looking for new oil
and gas so you know so the solution to some of the of the energy questions we have is just to to
to make illegal you know the use of certain energy and to to to move to other energy so that's part
of the answer now if we if we have done that and we deal with with energy that don't have the
the negative this much bigger negative impact on mankind than their positive productive impact
then you know redistribution of wealth must be about all forms of wealth you know whether it's
rent or energy or financial assets or i was seeing you know we we need to have a
permanent circulation of wealth and power so you know that's the way i i view you know taxation of
wealth is will be a permanent you know progressive tax on net wealth which in effect will will will
wipe out all the biggest uh wealth right away you know say up to 90 percent tax per year for you
know for for billionaires but among you know there will still be some people who want 100 000 dollars
some people who earn 1 million or 2 million but there will be a permanent circulation of wealth
holdings within within this limited uh wealth gap that that will still exist and this should
be for all forms of wealth you know whether it's land or housing or whatever whatever the origin
thank you uh we seem to have quite a number of students in the audience today
so we have a question about student debt and what types of resistance
students could make to uh to change the social relationship of debt that they get forced into
do you have any suggestions on rhetorical points that students need to engage with in
in order to gain support for a jet jubilee on their debts michael you wouldn't i wish
there were i don't see any because uh the uh you have a president of the united states who wrote
the law saying it you're not allowed to wipe out student debt as a result of bankruptcy the basic
the american philosophy is the way to prevent a middle class from developing is to keep them
basically so deeply indebted that uh they're afraid they have to go to work they're afraid
to leave their jobs uh they can't afford houses the the purpose of student debt is to make them
dependent under socialism on in europe china and old countries uh education was free and the whole
idea was uh it's you need education in order to grow uh under the finance capitalist system and
this is not industrial capitalism anymore this is financial capitalism very different you use a
basic need as a means of saying your money or your life if you don't pay us uh then uh you'll you'll
just have to forego your education so the price of uh getting access to a labor force is to go so
deeply into debt that you're going to have to work for a living and you're going to have to work for
what we pay you there's a class war on and you got to realize that and there's very little you
can do with students because if you don't right now i guess if you all stop paying the debt uh
make the government for uh throw uh 20 million of you in jail they can't do it uh the only thing to
do i guess would be a strike couldn't mean well they're going to uh try to uh go after your
credit rating they're going to try to uh fight you you you have to back politicians who are
willing to change this and unfortunately there's no party that's uh in favor of canceling student
debt or any kind of debt in the united states because the political parties are subsidized
by the banking in the financial sector so uh i don't see uh i don't see a way out
tomorrow yeah well i agree with michael that with this government and with this president in the us
you know it's probably going to be difficult to get a lot going but and i also agree that the
entire political system in the u.s in a way is so corrupt by money and the way campaigns
are financed and you know the way media also are financed and are biased in the way they cover the
different possible candidates this makes it very difficult that being said uh again if we go back
to 18 months ago you know there were candidates in the in the democratic primary which uh you know
together you know bernie sanders elizabeth i mean they don't put them exactly together of course
but but they add a substantial share of the word and on the issue of student debt you know i think
different things could have happened with with a different president and a different
majority so i think it's it's important also to to to to to be helpful and to try to prepare
you know what will be a more successful coalition or a more successful political campaign
in the future and it's important to always remember that as as michael was saying the
true source of economic prosperity is not financial capitalism investment in education
investment in the real economy in infrastructure and you know when the in the middle of the 20th
century in the 1950s 1960s when the u.s had were in a situation of economic dominance over the rest
of the world it was not through extreme financial inequality except you know you had 19 percent top
income tax rate after roosevelt and but you had a big educational advance as compared to you
know at that time you had a 90 percent of a court would go to high school in the us in 1950s 1960s
at the same time it was 20 30 percent in germany or in
france or so and this was this educational advance which made prosperity historically and and
and we seem to to have forgotten this uh you know in the us following you know since the 1980s but
so we we have to manage to put this back on the on this agenda but that's that's of course that's not
that's not easy well thank you very much to uh both of our speakers today i think you've helped
open our minds and and think about this topic um a little more clearly even though we're still not
exactly sure how to overcome these um tremendous forces uh that are working against us to find
solutions that uh really at the end of the day i don't think anything either one of you has said
is truly radical in the sense of history i mean we have as human beings we have approached
and confronted these problems before and there have been good practical solutions uh that both
of you have offered so i wanted to just turn the floor over to professor steve king now
and again thank you everyone for uh participating in this conversation today thank you for our
speakers and thank you for the audience as well i'm sorry that there was only one hour so there's
been over 70 questions asked we'd be here for three hours trying to answer them so it took a
couple hours to make it make it worthwhile i think i want to particularly thank thomas for being part
of this debate because one thing michael and i've experienced so frequently is that we can't get
anybody in the establishment to join into discussions with us outside the establishment
and i really respect you and honor you for for doing that it also shows the tremendous
contribution that david made by being somebody who can talk to everybody and everybody enjoys talking
to david we hope we can maintain that through the idea of forthcoming debates and we look forward to
seeing you all there in the future installments in the fight club so thank you everybody
you