'Capital in the Twenty-First Century' director explains the post-coronavirus economy: 'I think the damage is done'

Ethan Alter
Senior Writer, Yahoo Entertainment

When director Justin Pemberton began screening his new documentary, Capital in the Twenty-First Century, at film festivals in 2019, the movie’s warnings of another financial meltdown seemed like a far-off problem. But then the coronavirus pandemic sent the global economy into a tailspin, and exposed the class divides in America as well as other capitalist nations. Pemberton’s film is itself a casualty of the pandemic: Originally set to premiere in theaters in April, the movie will arrive as a digital release on May 1 via Kino Lorber’s new streaming service, Kino Marquee

Even though the film’s content hasn’t changed since 2019, its message is newly urgent at a time when political and economic leaders in the U.S. are actively debating what a post-virus economy looks like. Pemberton, for one, isn’t optimistic. “I think the damage is done — it was done a long time ago,” the director tells Yahoo Entertainment from his home in New Zealand. “It’s so precarious that no matter what happens, it’s going to be bad.” 

Inspired by the 2013 bestseller by French economist Thomas Piketty — a book that’s inspired plenty of debate among progressive and conservative circles — Capital in the Twenty-First Century provides a compelling overview of capitalism’s rise, before exploring the consequences of its ascendency on the present and future. Through interviews with Piketty and other economic experts, as well as montages juxtaposing archival footage with glossy images of the lifestyles of the rich and famous, the movie argues that the status quo isn’t sustainable over the course of the next century, even without the economic havoc caused by the coronavirus.

“There have been numerous warnings to the American government and the financial system about the lack of liquidity for ordinary people,” Pemberton notes. “If you look around today, there are so many things that are disconnected in the economy. I think there’s going to be a lot more pain as this huge economic shock turns into a financial crisis.”  

Yahoo Entertainment spoke with Pemberton about what the post-coronavirus future of capitalism looks like in America and around the world, as well as what might change for the better.

Justin Pemberton, director of the new documentary, Capital in the Twenty-First Century. (Photo: Kino Lorber)

Yahoo Entertainment: Tracking the history of capitalism as you outline it in the film, there are always windows for change when inequality grows too great, but those windows can slam shut very quickly. 

Justin Pemberton: One of the things that struck me when I read Thomas’s book is how there are patterns that play out… and that history doesn’t repeat so much as rhyme. I realized I've never seen a movie that tracked the the journey of wealth across time. The most terrifying time for everyday people seems to be the 18th and 19th century where there was such inequality. But then you get this idea that we’re heading back to that level, at a time where there's just extreme amounts of poverty and declining health and life expectancy. When you start to piece that together in terms of the modern day, that's what made the story feel urgent to me. The things that people had fought for after the Great Depression and World War I and World War II to make life better for everyone are now being unpacked all over the world. 

How do you explain the success politicians in both the past and present have had in using social issues to distract voters from unpopular economic policies?

People do always like to look for someone to blame — that idea that there’s someone beneath you who you can vent at, because you’re more powerful. And people also like to hold onto the idea that they one day will be the billionaire. That's why people vote for tax cuts that don't even benefit them… and actually harm them in many cases. There's this idea that we make ourselves better by feeling superior to someone else, and if it's a group that’s not us then that's an even easier target. It’s the drain the swamp idea, isn't it? Only the swamp hasn't been drained; it's actually been filled up in many ways in the current presidency. Look at who all the bailouts are going to in America at the moment. It's certainly not the ordinary person.

The hope is always that the next generation improves on the one that came before, but your film notes that factors like the prevalence of inherited wealth among the elite make that kind of social mobility increasingly difficult.

There's a statistic in the film that two-thirds of the population are on track to be poorer than their parents in the developed world. It's just shocking, because that's the opposite of what we've been told should happen. And that’s a result of concentrating capital. In his most recent book, Capital and Ideology, Thomas suggests that’s what happened is that even those people who were with the parties of the left have lost touch with the original political ideas of the working and middle classes. They’ve become another form of liberal elite: They like funding arts, and are interested in the environment, but ultimately the system worked for them and they’ll protect their own wealth. You can see that in the Democratic Party in America, where people say both are parties of business, not necessarily of workers or people.

Bernie Sanders and Jeremy Corbyn are examples of politicians who have both been arguing for more progressive economic reforms, but they’ve had mixed success in practice. 

It’s important that you have the right person leading, and unfortunately, I don't think Jeremy Corbyn was a very good communicator. I don't think that he brought a lot of new people into his ideas. He was also ridiculed by the press, and that's another thing in terms of the way that the media helps shape the narrative. Obviously, you've got Fox News in America, which is not interested in just analyzing or reporting on situations, but is more interested in taking sides and dividing the population. In the case of Bernie Sanders, I think people were very anxious about his age and his health. So there's been a bit of a drought of exciting candidates, but that's the bright side of a crisis, right? It's a chance to shake things up and maybe land somewhere new.

Do you view President Trump as the endpoint of an economic ideology that began with Ronald Reagan? 

There are so many things [from Reagan] that he appropriated. He's absolutely a trickle down economics guy, so he’s presenting all the same ideas, but he's managed to do in a way that suggests that they're new — or maybe people's memories are short. But Trump will go with the wind, I think to a degree. He's capable of changing his position really quickly, and I don't think he's going to turn into a progressive president in any way. He's reactive, which is the thing with politics in general: It’s not very proactive. In a democracy, ideas are led by a groundswell of public opinion; very rarely do the politicians seem to lead, which is unfortunate because that’s their job. 

As you suggested earlier, there’s nothing like a crisis to shake up the status quo. What do you think the world looks like when economies open back up? 

Different countries are in different positions. Obviously, the virus has really wreaked a lot of havoc in America, and with all 50 states going in different directions, it’s able to move quite freely across the country. The biggest problem we've got right now is rent: both for business and also for people who don't own their homes and aren't entitled to mortgage holidays or whatever the banks are trying to do to hold the real estate market together.

So I think there is some serious economic pain coming, unfortunately, but on the other side of that we might land somewhere where we can deal with the crises we haven’t been able to talk about because of the capital crisis. The climate crisis has not been dealt with, because of capital’s influence in politics. Interest groups are stopping governments from being able to deal with it. Also people are talking about things like universal basic income for the first time. That’s been the biggest change from when I finished the movie: We had a little bit about universal basic income, but now it’s being talked about seriously all over the world

Do you feel New Zealand is one of the countries that’s in a better position?

I do think New Zealand's in an exceptionally good spot, and one of the reasons is because we are an island nation, so our government acted very fast. Because we're small, it was easy to have a coordinated approach, and the public is widely behind the leader [Prime Minister Jacinda Ardern]. We were told yesterday that we had eliminated the virus in New Zealand, which is extraordinary. I'm a news junkie who particularly binges on British and American news, and I've noticed a stark difference. Our communication has been very clear, and we've always been told exactly what's happening. 

We've got a four-level alert system and at every alert category, you know what you are and not allowed to do. So today we're down to Level 3, so we're allowed to go back to swimming in the beaches. And we know that in two weeks, we’re slated to move to Level 2, which means we can all start traveling around the city again more socially. It's really appreciated just how transparent the information has been, because that makes you feel a lot more calm and also a bit more empowered because you can look at all the data and see how the decisions are being made. So it has been really well handled here, but we're not out of it. There's probably going to be a second wave everywhere. One of the things that has come out of it is our trust in our leadership, which helps communities and economies get through it.  

Now that the pandemic — and your film — has more clearly exposed the gaps between the wealthy and the poor, what can the younger generation do to pursue change? 

What causes change is a shift in attitudes, and that starts at a grassroots level. After that, it’s political action, which was what the Occupy movement wasn’t able to follow through on even though it was successful in grabbing attention. The Tea Party was more of a political action, but of course that had capital behind it. The big changes include looking at tax havens and taxes, knowing that in the 1960s, the top tax rate in America was around 90% and that was one of the most productive times for the economy. Another change is universal basic services: certainly Medicare For All, but also free education and free internet, so that even if you’re poor, you can still get an education and have good health care. If you look at the Democratic Party, the support for Medicare For All is quite high. The problem is capital in politics: The private health care industry has huge political lobbyists and they’re not interested in it. 

If Joe Biden wins the presidency in November, could he be the transitional figure that points the way towards a more equitable economy?

Obviously, I don't get to vote, so I'm very much a spectator in this. I think there's a lot more room for him, as well a risk of him not offering enough to keep people from being turned off and just not voting. I'm surprised that the Democratic Party doesn't appear to be bolder and isn't embracing younger voters who they need to win the election. There is a chance that the disenfranchised voters will end up either voting for Trump or just not voting, because they all see Biden as the status quo and a return to the past. Even though people look at President Obama with a lot of fondness, that's not necessarily enough to win an election because people don't really want to go back in time. I am surprised that he hasn't accelerated to produce anything a little more attractive to those who are feeling like they're being left out of the process. That’s what Trump targeted: Even though he hasn't played to their needs, he speaks to them.

You outline in the film how massive amounts of capital moved easily around the globe often in secrecy. Will that change in a post-pandemic world?

Even in a virus economy, capital can move quite comfortably around, and governments are really keen to attract it. There's been a horrible narrative going through the New Zealand media where they say we should be inviting billionaires, because we're the safe haven. They can build their bunkers and bring their money, and help us get an advantage. It's absolutely crazy, because billionaires don't pay taxes... but it represents the idea that capital is even more attractive in this current environment and will continue to move freely, whereas nations have already got huge restrictions on immigration and land borders.

What I keep holding onto is that peoples’ consciousness is changing; they see that inequality is being heightened. So it’s possible to demand [change] and back politicians who actually have agreed to deal with it. Political change starts with public opinion, which lags around 20 years. We're moving somewhere that's maybe three steps forward and two steps back, but we'll get there.

Capitalism in the Twenty-First Century is available to stream on May 1 through Kino Marquee.

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