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Since the end
of the Second World War

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the federal government had
controlled US capitalism.

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Successive governments,

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00:00:50,400 --> 00:00:52,200
both Democrat and Republican,

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had regulated the markets,
prevented monopolies

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and heavily taxed the rich.

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There was little talk of
billionaires in America anymore.

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But out of the blue, in 1973,

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an oil crisis upset
the entire economy.

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Over the next year,
the industrial slowdown

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led to a surprising
rise in unemployment.

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The government was unable
to put an end to the slump

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which the country was now mired in.

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All of a sudden, New York

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collapsed under the weight
of its welfare state.

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Enter the recession.
The big banks cut off credit,

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inflation pushed the cost
of city services way up,

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and by late this spring,

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New York faced
the prospect of going broke.

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Overnight, the authorities
were forced to lay off

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20% of firefighters,

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police officers
and healthcare workers.

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Run-down and overrun by gangs
due to the lack of police,

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America's flagship city

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became Fear City.

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Confined to
the margins for 50 years,

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the conservatives
of the Republican Party

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were now seen as
the only ones capable

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of restoring order and prosperity.

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For their leader, Ronald Reagan,

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America had erred

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in going down
the path of the New Deal,

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an abomination

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which conservatives
had never gotten over.

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He promised

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to free the economy
from the tyranny of government

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and to slash taxes,

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leaving Americans free once again

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to get as rich as they could.

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CALIFORNIA

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Meanwhile, over on the west coast,

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America's next great
fortunes were being made.

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Chiefly in the region
around San Francisco

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and the Santa Clara Valley,

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which one journalist,

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taking the name of the material

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used to make microprocessors,

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dubbed Silicon Valley.

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On 1 April 1975,
Bill Gates and Paul Allen,

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two young entrepreneurs

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who had caught a whiff
of this new El Dorado,

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founded Microsoft.

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Just a year later Steve Jobs

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and Steve Wozniak founded

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Apple Computer.

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In 1980, the popular vote

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triumphantly brought
to power the man

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who had promised to get wealth
in America trickling down.

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Let us pledge to each other,

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with this great lady looking on,

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that we can - and, so help us God,

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we will - make America great again.

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Thank you very much.

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SILICON VALLEY, SUMMERY 1981

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Silicon Valley lived by a prophecy:

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Moore's prophecy.

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The co-founder of Intel

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Gordon Moore predicted

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that the processing capacity
of microprocessors

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would double every two years.

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If a microprocessor in 1975

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was capable of carrying out
1,000 operations a second,

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then six years later, in 1981,

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according to the prophecy,
it should be capable of 8,000.

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And that's exactly what happened.

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In the summer of 1981

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all of Silicon Valley
was looking ten years down the line.

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If the prophecy continued to be true

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then the result would be

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256,000 operations a second,

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an increase in the capacity
of microprocessors

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of 25,600%.

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The challenge now was to convert

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this remarkable prediction

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into profit.

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Previously, computers
had been huge machines

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which only governments and
very large companies had.

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But the revolution
in processing power

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reduced the size of machines

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and gave birth to the first PCs

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or personal computers.

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Dozens of competitors
spring up with new machines,

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hoping to grab a piece
of the rapidly growing market.

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This gold rush
rekindled the old myth

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of the self-made man,
working in an unusual location:

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their garages.

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In the '70s

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teenagers Steve Jobs
and Stephen Wozniak,

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tinkering in a California garage,

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invent the circuitry
that becomes the brain

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of the revolutionary Apple computer.

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But there was nothing
spontaneous about this revolution:

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its origins could be traced back

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much further
in Silicon Valley's past.

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Legend has it that
Silicon Valley was born

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in 1939

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in this garage,
the first of its kind,

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in Santa Clara County.

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It was here that Bill Hewlett
and David Packard

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00:08:03,600 --> 00:08:05,880
two engineers and Harvard graduates

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00:08:06,080 --> 00:08:08,760
who were working
on a high-precision oscillator,

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founded Hewlett-Packard.

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Their first client
was Hollywood magnate Walt Disney,

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who bought eight
oscillators from them

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to address the previously
unsolvable problem

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of syncing up sound and pictures.

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This enabled him to produce

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his symphonic blockbuster Fantasia.

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Hewlett-Packard's garage
may have provided an origin myth,

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but Silicon Valley was
actually an ecosystem

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drawing on public and private funds

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and centred around
Stanford University.

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In 1951

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Stanford created
a technological research institute

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and an enormous research park

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00:09:01,280 --> 00:09:03,040
to encourage
graduates and professors

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to market their research.

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00:09:09,040 --> 00:09:10,640
Bill Hewlett and David Packard

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00:09:10,840 --> 00:09:12,680
set up there in 1953,

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and this unique environment,

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00:09:14,440 --> 00:09:16,600
combining pure
research and business,

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00:09:16,800 --> 00:09:19,000
enabled them to develop HP

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while inventing
a new corporate culture.

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At HP staff were given
a significant amount of freedom,

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the hierarchy was informal

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and successful results were shared

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equally in the form of bonuses.

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Coffee breaks were encouraged

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as an opportunity for discussions

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aimed at improving projects.

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On Friday evenings

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they organised BBQs,
not just as a way to wind down,

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but also to continue

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to brainstorm new ideas.

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This was all part of 'The HP Way',

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00:09:57,240 --> 00:10:00,480
a style of management invented
by Hewlett and Packard

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00:10:00,640 --> 00:10:03,480
which would establish itself
as the dominant culture

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00:10:03,760 --> 00:10:05,000
across Silicon Valley.

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00:10:08,520 --> 00:10:10,960
In 1963,
the Stanford Research Institute

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00:10:11,160 --> 00:10:13,360
invented the first ever

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00:10:13,560 --> 00:10:15,040
computer mouse,

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00:10:17,440 --> 00:10:18,960
an invention that was stolen

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00:10:19,160 --> 00:10:20,960
and improved by Xerox,

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00:10:22,880 --> 00:10:25,560
before being brought to market
by a new company: Apple.

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At Apple we understand that business

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as usual isn't anymore.

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And why soon there'll be
just two kinds of people...

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00:10:38,160 --> 00:10:39,080
Hi.

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...those who use computers...

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Yeah, I'll be home for breakfast.

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00:10:44,840 --> 00:10:46,960
...and those who use Apples.

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But before they
could make their fortune,

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they had to sell their machines
to a still puzzled customer base.

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00:11:01,360 --> 00:11:03,040
By simply using the mouse

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00:11:03,240 --> 00:11:06,560
the user can move an arrow around
on the screen and simply point

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00:11:06,760 --> 00:11:08,400
to English words
and point to pictures

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00:11:08,600 --> 00:11:10,960
and move things around,
select things

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and exchange information
between applications

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00:11:13,240 --> 00:11:14,760
all through this very simple device.

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00:11:17,840 --> 00:11:20,760
What's left in development?
Is this the ultimate

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office computer?

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00:11:23,440 --> 00:11:24,800
- Today.
- Today it is.

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00:11:27,840 --> 00:11:30,280
This is when the giant
IBM entered the fray,

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a company which made everything

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00:11:32,480 --> 00:11:34,880
from professional
computers to typewriters.

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IBM, old hands at marketing
products to the general public,

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decided to launch their own PC.

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The very first computers
seemed as big as houses

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and so mysterious
that for most of us

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the computer was
behind a closed door.

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But IBM was thinking how to
make the computer more useful.

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And as one good idea led to another,

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it began getting smaller, faster,

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00:12:02,400 --> 00:12:04,640
less expensive and easier to use.

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00:12:06,160 --> 00:12:08,160
But IBM had no knowledge whatsoever

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00:12:08,360 --> 00:12:09,920
of operating systems,

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software that was essential
in order for a PC to run.

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As a result IBM turned

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to Microsoft, a tiny company

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who suggested a solution
they came up with in a rush,

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MS DOS, a tongue-in-cheek
name which stood for

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Microsoft Dirty Operating System.

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IBM's PC was such
a commercial success

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that it was imitated
by most other manufacturers,

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establishing Microsoft

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00:12:48,360 --> 00:12:50,720
as the world leader

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00:12:50,920 --> 00:12:52,680
in operating systems.

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This marked the beginning

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00:12:57,880 --> 00:12:59,960
of the company's
remarkable expansion.

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00:13:09,240 --> 00:13:11,760
As promised, Regan ushered in

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00:13:11,960 --> 00:13:14,520
the conservative revolution
by slashing taxes.

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00:13:16,360 --> 00:13:18,800
It's been remarked that there
are three stages of reaction

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00:13:19,000 --> 00:13:21,320
to a new idea like our tax proposal.

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00:13:21,840 --> 00:13:24,320
First stage is,
it's crazy, it'll never work.

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00:13:24,520 --> 00:13:25,880
Don't waste my time.

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00:13:26,400 --> 00:13:29,400
The second: it's possible,
but it's not worth doing.

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00:13:29,960 --> 00:13:33,880
Finally: I've always said it was a
good idea, I'm glad I thought of it.

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00:13:36,320 --> 00:13:40,800
Well, we're rapidly
sweeping up on that third stage.

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00:13:42,960 --> 00:13:45,120
"A new day is dawning for America",

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00:13:45,320 --> 00:13:47,000
said excited conservatives.

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00:13:49,000 --> 00:13:50,680
Inequality, poverty
and anything else

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00:13:50,880 --> 00:13:52,560
that could threaten this euphoria

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00:13:52,760 --> 00:13:54,560
was simply not mentioned.

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00:13:57,800 --> 00:14:00,400
The President of the United States
and Mrs Reagan!

215
00:14:03,160 --> 00:14:05,720
Reagan re-established
the magic of the market,

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00:14:05,920 --> 00:14:09,080
violated by 50 years
of government intervention.

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00:14:15,800 --> 00:14:17,520
His greatest achievement

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00:14:17,720 --> 00:14:19,920
was the deregulation of Wall Street.

219
00:14:28,280 --> 00:14:29,880
Highly speculative products,

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00:14:30,080 --> 00:14:33,280
which had been banned for
50 years, were allowed once more.

221
00:14:35,880 --> 00:14:38,120
Stock prices reached record levels.

222
00:14:41,160 --> 00:14:43,080
Millionaire investor Warren Buffett

223
00:14:43,280 --> 00:14:46,520
saw a sixfold increase
in his personal fortune

224
00:14:46,720 --> 00:14:48,400
in the space of just two years.

225
00:14:50,880 --> 00:14:53,400
American millionaires
grew rich at a speed

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00:14:53,600 --> 00:14:56,840
which hadn't been
seen since the 1920s.

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00:15:00,440 --> 00:15:04,000
Meanwhile, the computing market
was changing dimension,

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00:15:04,200 --> 00:15:06,640
resulting in a fierce
battle for control.

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00:15:08,400 --> 00:15:10,560
...we celebrate the first

230
00:15:10,760 --> 00:15:14,080
glorious anniversary of
the information purification...

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00:15:14,760 --> 00:15:16,520
22 JANUARY 1984

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00:15:16,720 --> 00:15:19,680
In the evening of 22 January 1984,

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00:15:19,880 --> 00:15:21,880
during halftime in the Super Bowl,

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00:15:22,080 --> 00:15:24,840
the most watched
television event in America,

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00:15:25,360 --> 00:15:26,800
audiences got their first glimpse

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00:15:27,000 --> 00:15:29,600
of the new Apple advert
directed by Ridley Scott.

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00:15:31,120 --> 00:15:34,240
...is more powerful
a weapon than any fleet

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00:15:34,560 --> 00:15:37,240
or army on Earth.
We are one people...

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00:15:38,280 --> 00:15:41,000
A reference to George Orwell's
totalitarian world,

240
00:15:41,320 --> 00:15:43,560
this was Steve Jobs' angry retort

241
00:15:43,760 --> 00:15:45,440
to the growing supremacy of IBM

242
00:15:45,760 --> 00:15:46,960
and Microsoft.

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00:15:50,720 --> 00:15:53,280
We shall prevail!

244
00:16:08,640 --> 00:16:11,160
For weeks the Macintosh
has been rolling off the line,

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00:16:11,360 --> 00:16:13,040
one every 27 seconds.

246
00:16:13,560 --> 00:16:15,680
Not compatible with Microsoft,

247
00:16:15,880 --> 00:16:19,000
the Macintosh was the first
computer to be sold

248
00:16:19,200 --> 00:16:22,120
as both a technological
and marketing revolution.

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00:16:26,720 --> 00:16:29,720
When you bought a Macintosh,
you weren't just buying a machine.

250
00:16:30,240 --> 00:16:32,360
You were entering
the myth of Steve Jobs,

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00:16:32,560 --> 00:16:35,840
the visionary genius
who started out in his garage,

252
00:16:37,320 --> 00:16:38,920
and who was now liberating

253
00:16:39,120 --> 00:16:41,840
and transforming
the world singlehandedly.

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00:16:42,440 --> 00:16:44,960
Apple is perceived
to be the only hope

255
00:16:45,160 --> 00:16:48,000
to offer IBM a run for its money.

256
00:16:48,520 --> 00:16:52,080
Dealers, initially welcoming
IBM with open arms,

257
00:16:52,280 --> 00:16:54,800
now fear an IBM-dominated

258
00:16:55,000 --> 00:16:57,120
and controlled future.

259
00:16:57,320 --> 00:17:00,200
They are increasingly and
desperately turning back to Apple

260
00:17:00,400 --> 00:17:04,160
as the only force that can
ensure their future freedom.

261
00:17:11,160 --> 00:17:12,920
Steve Jobs had carefully honed

262
00:17:13,120 --> 00:17:15,000
his image as a genius,

263
00:17:15,920 --> 00:17:18,880
but the Macintosh arrived
too late to upset a market

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00:17:19,080 --> 00:17:21,360
already built around Microsoft.

265
00:17:29,280 --> 00:17:30,840
The dynamism of Silicon Valley

266
00:17:31,160 --> 00:17:33,160
attracted the best minds
in the country.

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00:17:37,200 --> 00:17:40,800
In tech, people were working much
more than anywhere else in America.

268
00:17:42,400 --> 00:17:43,960
Well, we'll hire people of any age

269
00:17:44,160 --> 00:17:45,680
as long as they're super energetic

270
00:17:45,880 --> 00:17:48,320
and they want to make
personal computers easier to use.

271
00:17:50,320 --> 00:17:52,960
But employees had
the highest wages in America,

272
00:17:53,160 --> 00:17:55,840
with bonuses paid
in shares in the company

273
00:17:57,080 --> 00:17:58,920
in the hope that they might get rich

274
00:17:59,240 --> 00:18:01,600
when the company was
floated on the stock market.

275
00:18:08,160 --> 00:18:11,560
The New York Times
19 September 1985.

276
00:18:13,120 --> 00:18:15,800
The tale of Mr Jobs's
visionary leadership at Apple

277
00:18:16,000 --> 00:18:17,720
came to a bitter end on Tuesday

278
00:18:17,920 --> 00:18:20,400
when he resigned
as the company's chairman.

279
00:18:22,920 --> 00:18:24,280
According to associates,

280
00:18:24,440 --> 00:18:26,640
the same vision, drive
and ego that helped Mr Jobs

281
00:18:26,840 --> 00:18:28,920
make Apple into a leading company

282
00:18:29,120 --> 00:18:31,720
also prevented him from
heeding the advice of others

283
00:18:31,920 --> 00:18:33,760
to the point that Apple

284
00:18:33,960 --> 00:18:36,360
is in worse financial shape
than it has ever been.

285
00:18:40,560 --> 00:18:41,560
The New York Times

286
00:18:41,760 --> 00:18:44,120
18 March 1986.

287
00:18:46,280 --> 00:18:48,320
Software company Microsoft

288
00:18:48,520 --> 00:18:52,320
went public last
Thursday at 21 dollars a share,

289
00:18:52,520 --> 00:18:56,120
and ended the week at 29 dollars.

290
00:18:59,800 --> 00:19:01,400
This sensational stock market launch

291
00:19:02,400 --> 00:19:05,880
made 12,000 employees
and former employees of Microsoft

292
00:19:06,200 --> 00:19:08,680
into overnight millionaires.

293
00:19:11,480 --> 00:19:13,800
Bill Gates, meanwhile,
not even 31 years old,

294
00:19:14,000 --> 00:19:15,080
was now a billionaire.

295
00:19:17,280 --> 00:19:19,000
Biographies then began to appear,

296
00:19:19,200 --> 00:19:22,040
bestsellers which
described him as heartless

297
00:19:22,240 --> 00:19:24,240
and concerned only with money.

298
00:19:27,440 --> 00:19:28,960
And within the mythology of tech,

299
00:19:29,160 --> 00:19:31,080
which championed
the selfless genius,

300
00:19:31,280 --> 00:19:33,680
Bill Gates came to represent

301
00:19:33,880 --> 00:19:35,480
the horrible businessman.

302
00:19:43,080 --> 00:19:44,320
In the early 1990s,

303
00:19:44,640 --> 00:19:46,560
the revolution in processing power

304
00:19:46,760 --> 00:19:48,600
fed the entire US economy.

305
00:19:51,240 --> 00:19:53,080
The computer became
an everyday object,

306
00:19:53,280 --> 00:19:55,360
reshaping work

307
00:19:55,560 --> 00:19:57,160
for millions of Americans,

308
00:19:58,080 --> 00:19:59,880
while the country got ready

309
00:20:00,080 --> 00:20:02,200
for the next
technological revolution.

310
00:20:06,240 --> 00:20:08,880
Running counter to
the gospel of private initiative,

311
00:20:09,080 --> 00:20:11,960
this change would be financed
by the federal government

312
00:20:12,520 --> 00:20:15,600
through public investment.
Given unanimous approval,

313
00:20:16,120 --> 00:20:17,880
the money would go

314
00:20:18,080 --> 00:20:19,520
to universities and Silicon Valley

315
00:20:20,360 --> 00:20:21,720
to enable them to invent

316
00:20:21,920 --> 00:20:23,960
'the information superhighway',

317
00:20:25,560 --> 00:20:27,360
which would go on
to become the internet.

318
00:20:30,440 --> 00:20:32,560
On 12 December 1991

319
00:20:32,760 --> 00:20:35,520
Stanford University trialled

320
00:20:35,720 --> 00:20:38,960
America's first
ever internet server.

321
00:20:43,840 --> 00:20:45,400
This is Lusk, Wyoming.

322
00:20:46,840 --> 00:20:49,240
Cows outnumber people here 100 to 1.

323
00:20:51,000 --> 00:20:53,680
The thing that isn't apparent
about Lusk is it's wired.

324
00:20:55,000 --> 00:20:56,760
Lusk has strong fibre optic cable

325
00:20:56,920 --> 00:20:58,920
for the future
of high-speed internet.

326
00:20:59,600 --> 00:21:02,560
The schools have
320 computers for 500 kids.

327
00:21:03,440 --> 00:21:06,280
Home businesses
on PCs are common. Why?

328
00:21:07,120 --> 00:21:08,240
They're practical people.

329
00:21:11,120 --> 00:21:12,480
In 1996,

330
00:21:12,680 --> 00:21:16,040
Americans began using
the internet in large numbers.

331
00:21:19,440 --> 00:21:23,040
Technology is a tool.
Software is a tool.

332
00:21:23,240 --> 00:21:25,160
These are the dreams it's made for.

333
00:21:25,480 --> 00:21:27,000
So, that's why we make it.

334
00:21:34,440 --> 00:21:36,560
With the infrastructure now ready,

335
00:21:36,760 --> 00:21:38,480
a new generation rushed

336
00:21:38,680 --> 00:21:39,960
to see who would be

337
00:21:40,160 --> 00:21:42,360
the next visionary entrepreneur.

338
00:21:43,760 --> 00:21:45,560
If it's in print they can get it.

339
00:21:45,760 --> 00:21:48,760
Their database
contains 1.1 million titles.

340
00:21:48,960 --> 00:21:51,000
If you were to print
the Amazon.com catalogue,

341
00:21:51,200 --> 00:21:54,160
it would be the size of
seven New York City phone books.

342
00:21:55,480 --> 00:21:57,280
Amazon.com has been online

343
00:21:57,480 --> 00:22:00,360
for a little more than a year now,
and it has yet to turn a profit.

344
00:22:00,680 --> 00:22:03,120
But that doesn't bother the man
who came up with this idea.

345
00:22:03,320 --> 00:22:06,080
In fact, if we make a profit any
time in the next two years,

346
00:22:06,400 --> 00:22:08,080
I'd say it would
strictly be an accident.

347
00:22:09,080 --> 00:22:11,520
Zip2, a California company

348
00:22:11,720 --> 00:22:13,960
that provides online access

349
00:22:14,160 --> 00:22:16,920
to information about
cities around the country,

350
00:22:17,120 --> 00:22:18,480
everything from where to eat,

351
00:22:18,800 --> 00:22:20,240
to how to get around.

352
00:22:20,440 --> 00:22:21,440
Imagine the possibilities.

353
00:22:21,640 --> 00:22:24,440
The company's chief
engineer and founder

354
00:22:24,640 --> 00:22:27,000
is 27-year-old Elon Musk.

355
00:22:27,320 --> 00:22:29,760
And how old were
you when you started

356
00:22:29,960 --> 00:22:31,800
this company or what
became this company?

357
00:22:32,040 --> 00:22:32,760
Twenty three.

358
00:22:38,080 --> 00:22:39,840
Some from this new generation

359
00:22:40,040 --> 00:22:41,480
flaunted their supposed genius

360
00:22:41,680 --> 00:22:44,480
and their carefully
cultivated egocentrism,

361
00:22:46,600 --> 00:22:48,440
close to an old,
radical strain of thought

362
00:22:48,640 --> 00:22:51,040
that had previously
been foreign to Silicon Valley:

363
00:22:51,760 --> 00:22:52,640
libertarianism.

364
00:22:52,840 --> 00:22:54,520
LIBERTARIANISM

365
00:22:56,280 --> 00:22:58,000
The libertarian movement,

366
00:22:58,200 --> 00:23:00,120
which dates back
to the American revolution,

367
00:23:00,320 --> 00:23:02,520
is typified by its stubborn defence

368
00:23:02,720 --> 00:23:04,120
of individual freedom.

369
00:23:09,480 --> 00:23:11,160
In the 1950s,

370
00:23:11,360 --> 00:23:13,960
Ayn Rand, a Russian-born
American writer,

371
00:23:14,160 --> 00:23:16,640
advocated
an extreme form of libertarianism

372
00:23:16,840 --> 00:23:19,600
totally at odds with
the prevailing mood at the time.

373
00:23:19,800 --> 00:23:21,400
How do we build roads,

374
00:23:21,600 --> 00:23:25,200
sanitation facilities,
hospitals, schools,

375
00:23:26,080 --> 00:23:28,600
if the government is not permitted

376
00:23:28,800 --> 00:23:31,720
to force, if you will,
by vote, taxation?

377
00:23:32,040 --> 00:23:33,600
You admit that someone

378
00:23:33,800 --> 00:23:36,240
is producing the money, the wealth

379
00:23:36,440 --> 00:23:38,320
that will make those roads possible.

380
00:23:38,840 --> 00:23:44,080
Now, you have no right to tell
the man who produced the wealth

381
00:23:44,280 --> 00:23:46,640
in what way you
want him to spend it.

382
00:23:47,160 --> 00:23:50,040
If you need his money,
you can obtain it

383
00:23:50,240 --> 00:23:52,640
only by his voluntary consent.

384
00:23:52,840 --> 00:23:54,960
And you believe
in the eventual goodwill

385
00:23:55,160 --> 00:23:57,080
of all human beings,
or at least that top

386
00:23:57,280 --> 00:23:58,800
echelon of human beings,

387
00:23:59,000 --> 00:24:01,920
whom you believe
will give willingly.

388
00:24:02,120 --> 00:24:05,080
No goodwill is necessary,
only self-interest.

389
00:24:05,280 --> 00:24:07,280
I believe in private roads,

390
00:24:07,480 --> 00:24:09,600
private post offices,
private schools.

391
00:24:09,800 --> 00:24:11,160
When industry breaks down...

392
00:24:12,880 --> 00:24:14,080
Ayn Rand reduced society

393
00:24:14,240 --> 00:24:16,800
to a competition pitting
everyone against each other,

394
00:24:17,000 --> 00:24:18,960
from which only a small
elite of creatives

395
00:24:19,160 --> 00:24:20,640
could emerge victorious.

396
00:24:23,120 --> 00:24:25,800
To regulate was to strangle
a person's freedom,

397
00:24:26,000 --> 00:24:28,360
while to tax them
was to steal their talent.

398
00:24:31,160 --> 00:24:32,440
Half a century later

399
00:24:32,640 --> 00:24:34,360
her ideas chimed perfectly

400
00:24:34,560 --> 00:24:36,400
with the myth of
the genius entrepreneur,

401
00:24:36,600 --> 00:24:38,560
the visionary hero of Silicon Valley

402
00:24:38,760 --> 00:24:40,600
who owed nothing to anyone.

403
00:24:44,600 --> 00:24:46,680
A myth which stood
in total contradiction

404
00:24:47,000 --> 00:24:50,240
to the ecosystem that helped
innovations to emerge

405
00:24:50,960 --> 00:24:52,920
and built the valley's
legendary success.

406
00:24:58,400 --> 00:24:59,840
FEBRUARY 1997

407
00:25:00,040 --> 00:25:03,800
Speaking of legends, Apple
sent out an SOS to Steve Jobs

408
00:25:04,000 --> 00:25:05,520
to save them from bankruptcy.

409
00:25:07,080 --> 00:25:09,120
If we want to move forward

410
00:25:09,320 --> 00:25:11,800
and see Apple healthy
and prospering again,

411
00:25:12,320 --> 00:25:13,960
we have to let go
of a few things here.

412
00:25:14,440 --> 00:25:15,480
We have to let go

413
00:25:15,680 --> 00:25:18,960
of this notion that for Apple
to win Microsoft has to lose.

414
00:25:19,160 --> 00:25:21,480
I happen to have a special
guest with me today

415
00:25:21,680 --> 00:25:23,480
via satellite downlink.

416
00:25:23,680 --> 00:25:26,480
And if we could get him
up on the stage right now.

417
00:25:35,160 --> 00:25:36,000
Good morning!

418
00:25:42,480 --> 00:25:43,800
Microsoft invested

419
00:25:44,000 --> 00:25:45,480
150 million dollars

420
00:25:45,680 --> 00:25:47,880
to kickstart its last
remaining competitor.

421
00:25:49,120 --> 00:25:50,600
This was in response to critics

422
00:25:50,800 --> 00:25:52,800
now that Bill Gates' company,

423
00:25:53,000 --> 00:25:55,720
which equipped 90%
of personal computers,

424
00:25:56,040 --> 00:25:58,280
enjoyed a near-total monopoly

425
00:25:59,520 --> 00:26:02,840
that could see it
broken up by the courts.

426
00:26:05,160 --> 00:26:08,440
Bill Gates, now the richest
man in the world,

427
00:26:08,640 --> 00:26:12,440
was keen to counteract the image
of him as this horrible businessman,

428
00:26:12,640 --> 00:26:15,040
and used a tried and
trusted method to do so.

429
00:26:17,360 --> 00:26:19,960
The man with more money
than anyone else on the planet

430
00:26:20,280 --> 00:26:23,880
today giving away more
than he ever has before:

431
00:26:24,080 --> 00:26:26,720
1 billion dollars
over the next 20 years

432
00:26:26,920 --> 00:26:29,120
to send minority
students - Asians, Blacks,

433
00:26:29,320 --> 00:26:31,120
Latinos, and Native Americans -

434
00:26:31,320 --> 00:26:33,560
to college and graduate school.

435
00:26:37,560 --> 00:26:39,880
The unprecedented sums
he spent on philanthropy

436
00:26:40,080 --> 00:26:42,920
gave him considerable influence,
including at the very top

437
00:26:43,120 --> 00:26:45,480
of the World Health Organization.

438
00:26:48,840 --> 00:26:50,560
He has sought to defend

439
00:26:50,760 --> 00:26:52,560
the almost state-like
influence he has.

440
00:26:54,600 --> 00:26:56,560
Certainly, when it comes
to saving children's lives,

441
00:26:56,760 --> 00:26:58,040
I don't think there's anything

442
00:26:58,240 --> 00:26:59,960
politically controversial
about that.

443
00:27:00,200 --> 00:27:03,440
And if we give mothers
the tools to save their children,

444
00:27:03,640 --> 00:27:04,880
they're going to want to do that.

445
00:27:05,120 --> 00:27:06,800
Partnering with governments on that

446
00:27:07,200 --> 00:27:11,520
is something that we've
taken as a very exciting cause.

447
00:27:11,840 --> 00:27:12,800
MAY 1998

448
00:27:14,200 --> 00:27:17,440
But Microsoft was still under
threat of being broken up.

449
00:27:18,760 --> 00:27:21,800
The company was accused
of abusing its dominant position

450
00:27:22,120 --> 00:27:23,680
in order to promote its browser,

451
00:27:23,880 --> 00:27:25,560
Internet Explorer,

452
00:27:25,880 --> 00:27:29,160
at the expense of
its main competitor, Netscape.

453
00:27:29,840 --> 00:27:32,040
Computer emails show Microsoft first

454
00:27:32,240 --> 00:27:34,160
tried to join forces with Netscape.

455
00:27:34,360 --> 00:27:37,600
When Netscape refused
Microsoft allegedly launched

456
00:27:37,800 --> 00:27:40,600
a relentless campaign
to destroy the company,

457
00:27:40,800 --> 00:27:42,480
telling one of
its business partners,

458
00:27:42,680 --> 00:27:45,800
"How much do we have
to pay you to screw Netscape?

459
00:27:46,000 --> 00:27:47,840
This is your lucky day."

460
00:27:49,040 --> 00:27:50,920
And everyone in Silicon Valley

461
00:27:51,240 --> 00:27:53,200
is keeping an eye
on the battleground

462
00:27:53,400 --> 00:27:54,880
a continent away

463
00:27:55,080 --> 00:27:57,480
at federal courthouse in Washington.

464
00:27:57,800 --> 00:28:00,360
It's here where it will
be decided whether Microsoft

465
00:28:00,680 --> 00:28:02,480
and its founder, Bill Gates...

466
00:28:02,680 --> 00:28:03,800
I don't remember sending it.

467
00:28:04,120 --> 00:28:05,720
...are our generation's equivalent

468
00:28:05,920 --> 00:28:07,800
of John D. Rockefeller

469
00:28:08,000 --> 00:28:09,480
and his Standard Oil.

470
00:28:09,800 --> 00:28:11,640
The trial is expected
to last for weeks,

471
00:28:11,840 --> 00:28:13,440
and the stakes are so high

472
00:28:13,640 --> 00:28:16,040
the case may end up
in the Supreme Court.

473
00:28:20,160 --> 00:28:21,800
While this was happening, a startup

474
00:28:22,000 --> 00:28:24,040
was celebrating its first birthday.

475
00:28:24,240 --> 00:28:25,720
SEPTEMBER 1999

476
00:28:38,040 --> 00:28:40,760
Google was a
revolutionary search engine

477
00:28:40,960 --> 00:28:43,040
with the capacity to map and index

478
00:28:43,240 --> 00:28:45,720
the labyrinth that was
the internet at that time.

479
00:28:48,400 --> 00:28:51,360
The company had been founded
by two Stanford PhD students,

480
00:28:51,880 --> 00:28:54,320
Larry Page and Sergey Brin.

481
00:28:56,800 --> 00:28:58,640
And in keeping with the fashion,

482
00:28:58,840 --> 00:29:01,560
Google was also officially
founded in a garage.

483
00:29:04,800 --> 00:29:07,280
Google was based
on a simple concept.

484
00:29:09,160 --> 00:29:11,080
Every search on a search engine

485
00:29:11,280 --> 00:29:12,640
produces pages of returns,

486
00:29:14,360 --> 00:29:16,720
but also a trail of invisible data

487
00:29:17,440 --> 00:29:18,960
including the number of searches,

488
00:29:19,280 --> 00:29:22,440
the time spent by users
on individual pages,

489
00:29:22,960 --> 00:29:25,120
and all manner of personal data.

490
00:29:29,240 --> 00:29:32,480
This data is known as
'behavioural surplus',

491
00:29:32,680 --> 00:29:35,480
surplus because it had
previously been considered waste

492
00:29:35,680 --> 00:29:38,240
clogging up the servers
of search engines.

493
00:29:41,480 --> 00:29:43,400
Google was
the first to systematically

494
00:29:43,600 --> 00:29:46,840
collect and analyse
this behavioural surplus

495
00:29:47,640 --> 00:29:49,280
in order to improve their services

496
00:29:49,480 --> 00:29:51,440
and provide increasingly accurate

497
00:29:51,640 --> 00:29:54,000
and speedy answers
to the questions asked of it.

498
00:29:57,040 --> 00:29:58,240
The better it got,

499
00:29:58,400 --> 00:30:01,360
the more people used it,
and the more people used it,

500
00:30:01,560 --> 00:30:02,800
the better it got.

501
00:30:05,240 --> 00:30:06,720
Eventually it was capable

502
00:30:06,920 --> 00:30:08,680
of predicting certain behaviour.

503
00:30:12,440 --> 00:30:14,960
Google could now
target advertising

504
00:30:15,280 --> 00:30:17,080
with previously unseen accuracy,

505
00:30:18,800 --> 00:30:21,200
transforming whims into purchases.

506
00:30:25,200 --> 00:30:26,960
Larry Page and Sergey Brin

507
00:30:27,160 --> 00:30:30,480
had their hands on an incalculably
large potential fortune.

508
00:30:30,680 --> 00:30:33,440
Google would go on to
upset every economic model

509
00:30:33,640 --> 00:30:35,360
for decades to come.

510
00:30:41,320 --> 00:30:43,560
After a two-year court case
the Federal Court

511
00:30:43,760 --> 00:30:46,720
returned its verdict
on Microsoft's monopoly.

512
00:30:48,760 --> 00:30:51,520
The New York Times 7 June 2000.

513
00:30:52,040 --> 00:30:54,560
In the Netscape case a federal judge

514
00:30:54,760 --> 00:30:57,080
ordered the breakup of Microsoft,

515
00:30:57,280 --> 00:30:59,440
believing this to be necessary

516
00:30:59,640 --> 00:31:01,680
in order to end its monopoly.

517
00:31:03,200 --> 00:31:06,080
But Microsoft had
strong grounds for an appeal.

518
00:31:06,400 --> 00:31:07,760
Bill Gates read out

519
00:31:07,960 --> 00:31:10,000
a press release
written by his lawyers,

520
00:31:10,200 --> 00:31:13,120
mentioning one key word twice.

521
00:31:14,320 --> 00:31:15,440
Despite this ruling

522
00:31:15,640 --> 00:31:17,840
we believe the courts
will ultimately find

523
00:31:18,040 --> 00:31:19,800
that all of Microsoft's actions

524
00:31:20,000 --> 00:31:23,080
have been completely legal
and good for consumers.

525
00:31:23,600 --> 00:31:26,360
We don't think this
decision matches the reality

526
00:31:26,560 --> 00:31:28,480
of the high technology industry,

527
00:31:28,680 --> 00:31:31,840
the intense competition,
the rapid innovation

528
00:31:32,040 --> 00:31:33,880
and lots of consumer benefits.

529
00:31:35,160 --> 00:31:38,240
The reason for choosing
to stress the point about consumers

530
00:31:38,440 --> 00:31:41,480
was that, influenced
by the conservative revolution,

531
00:31:42,200 --> 00:31:45,080
courts were increasingly
judging monopolies

532
00:31:45,400 --> 00:31:46,880
based not on

533
00:31:47,080 --> 00:31:49,160
their actual position on the market,

534
00:31:49,880 --> 00:31:52,200
but on the well-being
of their customers.

535
00:31:53,680 --> 00:31:55,800
And so if Microsoft's lawyers

536
00:31:56,120 --> 00:31:57,120
were able to show

537
00:31:57,320 --> 00:31:59,680
that consumers hadn't been wronged,

538
00:32:00,000 --> 00:32:01,800
then there was no monopoly.

539
00:32:04,040 --> 00:32:07,040
The New York Times 28 June 2001.

540
00:32:07,240 --> 00:32:09,720
In a twist in the Microsoft case,

541
00:32:09,920 --> 00:32:11,280
the Federal Court of Appeal

542
00:32:11,480 --> 00:32:14,720
annulled the break-up
of the leading software company.

543
00:32:16,280 --> 00:32:18,480
The cornerstone of
American capitalism

544
00:32:18,680 --> 00:32:20,560
is mastery of the law.

545
00:32:21,240 --> 00:32:23,280
Whether it's privatising pastureland

546
00:32:23,480 --> 00:32:24,640
in the 18th century

547
00:32:24,840 --> 00:32:27,200
or protecting Microsoft in 2001,

548
00:32:27,840 --> 00:32:30,080
if you're powerful enough
and smart enough

549
00:32:30,280 --> 00:32:32,280
then you can get
the law and the courts

550
00:32:32,480 --> 00:32:34,080
to serve your interests.

551
00:32:37,920 --> 00:32:39,560
11 SEPTEMBER 2001

552
00:32:39,760 --> 00:32:41,960
The September 11 attacks
dragged America

553
00:32:42,160 --> 00:32:44,960
into an all-out war on terrorism.

554
00:32:48,360 --> 00:32:50,760
As the only ones
with the capacity to store

555
00:32:50,960 --> 00:32:53,320
and analyse infinite
quantities of data,

556
00:32:53,600 --> 00:32:56,840
Silicon Valley received public
investment like never before

557
00:32:57,040 --> 00:32:58,400
to conduct cyberwarfare,

558
00:32:58,600 --> 00:33:00,320
furthering the
technological advantage

559
00:33:00,520 --> 00:33:02,640
of the American
intelligence apparatus.

560
00:33:03,720 --> 00:33:05,520
Essentially, this meant pumping

561
00:33:05,720 --> 00:33:08,840
the Valley's whole ecosystem full
of steroids for the next 20 years.

562
00:33:13,160 --> 00:33:15,240
The major players of Silicon Valley

563
00:33:15,440 --> 00:33:18,080
began to grow
at an exponential rate.

564
00:33:19,080 --> 00:33:23,040
Here, coming around,
we have North America.

565
00:33:23,240 --> 00:33:26,440
- Look at that.
- Google co-founder Sergey Brin

566
00:33:26,640 --> 00:33:28,680
is showing us an electronic globe

567
00:33:29,000 --> 00:33:31,200
that displays
the mountains of Google searches

568
00:33:31,400 --> 00:33:33,960
happening around the world
at any given moment.

569
00:33:34,160 --> 00:33:36,880
So, every little dot represents
a certain number of searches.

570
00:33:37,200 --> 00:33:40,000
You can see there are thousands of
searches going on every second.

571
00:33:40,320 --> 00:33:41,000
Now you can see Europe.

572
00:33:41,920 --> 00:33:44,400
These are all different languages,
right? All the different colours.

573
00:33:44,600 --> 00:33:45,200
Yeah.

574
00:33:45,400 --> 00:33:47,200
Wow, Europe is really going strong.

575
00:33:47,400 --> 00:33:49,360
200 million times a day

576
00:33:49,560 --> 00:33:51,640
someone somewhere uses Google

577
00:33:51,840 --> 00:33:53,480
to search for
something on the internet.

578
00:33:57,720 --> 00:33:59,600
Users churning out
behavioural surplus

579
00:33:59,800 --> 00:34:01,720
that was instantly converted

580
00:34:02,000 --> 00:34:03,960
into targeted adverts and offers.

581
00:34:05,720 --> 00:34:06,960
In just 24 months

582
00:34:07,160 --> 00:34:09,640
the startup's turnover rose

583
00:34:09,840 --> 00:34:11,200
by 3,600%,

584
00:34:15,240 --> 00:34:17,600
a new record for
American capitalism.

585
00:34:26,240 --> 00:34:29,360
This required colossal
processing power,

586
00:34:29,880 --> 00:34:31,640
but fortunately Moore's prophecy

587
00:34:31,840 --> 00:34:34,080
had continued
to come true for 30 years.

588
00:34:34,600 --> 00:34:35,800
By this time Moore was

589
00:34:36,000 --> 00:34:37,960
the richest retired
prophet in Hawai'i.

590
00:34:40,000 --> 00:34:41,520
Some supercomputers

591
00:34:41,720 --> 00:34:44,560
now had the capacity
to carry out 1,000 billion

592
00:34:44,760 --> 00:34:46,480
operations a second.

593
00:34:51,240 --> 00:34:52,840
And after the legend of the garage

594
00:34:53,040 --> 00:34:55,360
came the legend of
the student dorm room.

595
00:34:58,160 --> 00:35:00,960
For college students
the website called Facebook

596
00:35:01,160 --> 00:35:03,000
is a must-visit destination.

597
00:35:03,680 --> 00:35:06,000
Seven million college
and high school students

598
00:35:06,320 --> 00:35:09,560
use this online student
directory every day,

599
00:35:09,760 --> 00:35:12,440
a phenomenon that
Emily Murphy and Nadia Barbar,

600
00:35:12,640 --> 00:35:15,680
students at Georgetown,
describe as an addiction.

601
00:35:15,880 --> 00:35:17,040
You can entertain
yourself for hours.

602
00:35:17,360 --> 00:35:19,560
- Doing what?
- Looking at people's pictures,

603
00:35:19,880 --> 00:35:21,480
their interests and hobbies.

604
00:35:21,800 --> 00:35:23,040
There will always be

605
00:35:23,240 --> 00:35:24,400
new technology that helps...

606
00:35:24,600 --> 00:35:26,200
The creator of Facebook,

607
00:35:26,400 --> 00:35:29,920
21-year-old Mark Zuckerberg,
should still be in college.

608
00:35:30,240 --> 00:35:32,760
But he invented this by accident.

609
00:35:32,960 --> 00:35:35,560
Mark was at Harvard
when someone simply asked

610
00:35:35,760 --> 00:35:37,880
why there wasn't
an online directory.

611
00:35:38,080 --> 00:35:40,600
I just threw it together
one week in January

612
00:35:40,800 --> 00:35:42,360
and launched it for Harvard.

613
00:35:42,560 --> 00:35:44,720
- This was in your dorm room?
- Yeah.

614
00:35:44,920 --> 00:35:46,840
You launched Facebook
in your dorm room?

615
00:35:47,600 --> 00:35:48,800
Yeah.

616
00:35:52,320 --> 00:35:53,760
Seeking investors

617
00:35:53,960 --> 00:35:56,120
for Facebook's global roll-out,

618
00:35:56,320 --> 00:35:59,600
Mark Zuckerberg headed
for the promised land.

619
00:36:02,280 --> 00:36:04,320
Facebook spread across the world

620
00:36:04,520 --> 00:36:05,920
like wildfire.

621
00:36:09,200 --> 00:36:11,320
Users happily and willingly

622
00:36:11,520 --> 00:36:14,760
shared their private lives
and their personal data.

623
00:36:16,840 --> 00:36:19,400
Combined with the
invention of the infinite scroll,

624
00:36:19,600 --> 00:36:21,560
which kept pages going for ever,

625
00:36:22,440 --> 00:36:24,400
Facebook was nothing
short of a factory

626
00:36:24,600 --> 00:36:26,320
for behavioural surplus.

627
00:36:28,960 --> 00:36:32,000
So much so that Google
immediately offered to buy it

628
00:36:32,200 --> 00:36:33,600
for three billion dollars.

629
00:36:36,840 --> 00:36:38,520
Microsoft put in an offer

630
00:36:38,720 --> 00:36:40,840
five times that: 15 billion dollars.

631
00:36:44,840 --> 00:36:47,400
Zuckerberg,
whose business card read,

632
00:36:47,600 --> 00:36:50,120
"I'm CEO, b*tch",

633
00:36:50,320 --> 00:36:51,960
rejected every offer.

634
00:36:57,920 --> 00:36:59,520
I knew that the books

635
00:36:59,680 --> 00:37:02,600
business was going to be
successful in the first 30 days.

636
00:37:02,920 --> 00:37:04,200
I was shocked

637
00:37:04,560 --> 00:37:07,840
at how many books we sold,
we were ill-prepared.

638
00:37:08,640 --> 00:37:10,640
We had all the...

639
00:37:10,840 --> 00:37:12,800
We had only 10 people
in the company at that time,

640
00:37:13,000 --> 00:37:15,040
most of them were software
engineers, and so everybody

641
00:37:15,240 --> 00:37:18,160
including me and the engineers
were all packing boxes.

642
00:37:18,360 --> 00:37:20,240
We didn't even have packing tables.

643
00:37:20,440 --> 00:37:22,920
We were on our hands
and knees on a concrete floor

644
00:37:23,160 --> 00:37:24,320
packing the boxes,

645
00:37:24,520 --> 00:37:27,160
and at about one or two
in the morning I said to

646
00:37:27,360 --> 00:37:31,000
one of my software
engineering colleagues,

647
00:37:31,200 --> 00:37:37,160
"Paul, this is killing my knees.

648
00:37:37,360 --> 00:37:38,840
We need to get knee pads."

649
00:37:39,040 --> 00:37:41,200
And Paul looked at me
and he's like, "Jeff,

650
00:37:41,400 --> 00:37:43,200
we need to get packing tables."

651
00:37:44,920 --> 00:37:48,360
Behind the endlessly repeated
story about starting in his garage,

652
00:37:48,560 --> 00:37:51,200
Jeff Bezos' strategy
turned out to be identical

653
00:37:51,400 --> 00:37:54,080
to that of John Rockefeller
a century earlier,

654
00:37:55,040 --> 00:37:56,960
which is why Wall Street

655
00:37:57,160 --> 00:37:59,160
has always supported Amazon.

656
00:38:00,920 --> 00:38:03,720
For years, the more
money Amazon lost,

657
00:38:03,920 --> 00:38:05,800
the higher its stock price rose.

658
00:38:07,560 --> 00:38:08,880
Years of loss-making growth

659
00:38:09,080 --> 00:38:11,160
destroyed all competition

660
00:38:11,360 --> 00:38:12,960
without breaking any laws.

661
00:38:14,960 --> 00:38:16,960
Once Amazon started turning a profit

662
00:38:17,160 --> 00:38:20,480
the company established
itself as the world's leader,

663
00:38:21,800 --> 00:38:23,360
and continued its expansion.

664
00:38:26,880 --> 00:38:28,640
What we have seen

665
00:38:28,840 --> 00:38:30,640
is the ultra-fast
concentration of capital

666
00:38:30,880 --> 00:38:33,680
around a handful of companies
with the capacity to buy up

667
00:38:33,880 --> 00:38:35,760
ideas and innovations,

668
00:38:37,920 --> 00:38:40,680
the most powerful being Google,

669
00:38:40,880 --> 00:38:44,040
Amazon, Facebook, Apple

670
00:38:44,240 --> 00:38:46,640
and Microsoft, the GAFAM.

671
00:38:49,360 --> 00:38:50,960
The GAFAM had entered into

672
00:38:51,160 --> 00:38:53,960
a fierce global battle
to sell their products

673
00:38:54,160 --> 00:38:56,880
while also collecting as much
personal data as possible.

674
00:38:58,680 --> 00:39:00,840
But there were
limitations to this model.

675
00:39:01,040 --> 00:39:02,840
They needed users

676
00:39:03,040 --> 00:39:05,880
to be in front of a computer
connected to the internet.

677
00:39:08,160 --> 00:39:09,960
It was Apple who
solved this problem,

678
00:39:10,160 --> 00:39:13,080
granting the GAFAM
near-permanent access

679
00:39:13,280 --> 00:39:14,720
to billions of customers.

680
00:39:15,680 --> 00:39:16,600
An iPod,

681
00:39:18,000 --> 00:39:19,240
a phone

682
00:39:20,880 --> 00:39:22,560
and an internet communicator.

683
00:39:23,760 --> 00:39:25,200
An iPod,

684
00:39:26,240 --> 00:39:27,360
a phone...

685
00:39:29,360 --> 00:39:30,760
Are you getting it?

686
00:39:34,080 --> 00:39:37,400
These are not
three separate devices.

687
00:39:38,160 --> 00:39:39,840
This is one device

688
00:39:44,200 --> 00:39:45,680
and we are calling it

689
00:39:46,800 --> 00:39:47,880
iPhone.

690
00:39:52,400 --> 00:39:55,960
Today Apple is going
to reinvent the phone.

691
00:39:57,520 --> 00:40:01,200
The iPhone and the other
smartphones inspired by it

692
00:40:01,720 --> 00:40:04,040
were handheld, connected computers

693
00:40:06,200 --> 00:40:08,320
which, in accordance
with Moore's law,

694
00:40:08,520 --> 00:40:10,560
would be obsolete every 24 months,

695
00:40:10,760 --> 00:40:12,600
and which would be
sold by the billion.

696
00:40:15,960 --> 00:40:17,280
Over the next decade,

697
00:40:17,600 --> 00:40:20,120
they created new ways
of using the internet,

698
00:40:21,200 --> 00:40:23,400
brought about an
explosion in e-commerce

699
00:40:24,520 --> 00:40:25,520
and became essential

700
00:40:25,720 --> 00:40:28,560
for dozens of everyday activities.

701
00:40:29,400 --> 00:40:31,920
They also revolutionised
people's use of media,

702
00:40:32,440 --> 00:40:35,400
while making the GAFAM
richer and more powerful

703
00:40:35,600 --> 00:40:37,160
than they could ever have imagined.

704
00:40:40,480 --> 00:40:42,040
But in 2008

705
00:40:42,240 --> 00:40:44,120
Americans would be shown

706
00:40:44,320 --> 00:40:46,160
just how rotten

707
00:40:46,360 --> 00:40:48,080
their financial system was.

708
00:40:50,400 --> 00:40:53,080
SEPTEMBER 2008

709
00:40:53,640 --> 00:40:56,600
On 14 September 2008
Lehman Brothers,

710
00:40:56,800 --> 00:40:59,200
one of Wall Street's
most powerful investment banks,

711
00:40:59,400 --> 00:41:00,320
declared bankruptcy

712
00:41:02,160 --> 00:41:03,880
and sacked all of their staff.

713
00:41:09,080 --> 00:41:10,680
This extraordinary event

714
00:41:10,880 --> 00:41:13,800
worsened a financial crisis that
had been going on for months,

715
00:41:14,560 --> 00:41:16,800
the worst since 1929.

716
00:41:36,560 --> 00:41:39,280
Behind this was the collapse
of a system of property loans

717
00:41:39,600 --> 00:41:42,480
targeted at the poorest
people in America.

718
00:41:46,880 --> 00:41:48,640
Stockton, California is a city

719
00:41:48,840 --> 00:41:51,640
of 280,000 people
in the Central Valley,

720
00:41:51,840 --> 00:41:54,120
80 miles east of San Francisco,

721
00:41:54,320 --> 00:41:56,760
80 miles north of San Jose.

722
00:41:57,800 --> 00:41:59,440
A few years ago it was one of

723
00:41:59,600 --> 00:42:01,800
the hottest real estate
markets in the country.

724
00:42:01,960 --> 00:42:05,000
Today it's the foreclosure
capital of America.

725
00:42:06,760 --> 00:42:08,800
Most of the mortgages
issued in Stockton

726
00:42:09,120 --> 00:42:11,320
and a half of those now
in default or foreclosure

727
00:42:12,080 --> 00:42:14,280
were something
called subprime loans,

728
00:42:14,480 --> 00:42:16,760
meaning less than prime quality.

729
00:42:17,080 --> 00:42:19,160
The borrowers often
had sketchy credit,

730
00:42:19,360 --> 00:42:20,760
were financially strapped,

731
00:42:20,960 --> 00:42:24,640
or lacked sufficient income
to qualify for a standard mortgage.

732
00:42:27,680 --> 00:42:30,320
Brokers encouraged
insolvent buyers

733
00:42:30,520 --> 00:42:33,240
to borrow up to double
the value of their homes,

734
00:42:33,760 --> 00:42:36,560
and scored huge commissions
on each transaction.

735
00:42:40,240 --> 00:42:42,600
Wall Street then turned
these rotten loans

736
00:42:42,800 --> 00:42:44,400
into good quality securities.

737
00:42:45,720 --> 00:42:47,680
Firms like Bear Stearns
and Merrill Lynch

738
00:42:48,000 --> 00:42:50,040
sliced the loans into little pieces,

739
00:42:50,360 --> 00:42:52,480
packaged them up
with other investments,

740
00:42:52,800 --> 00:42:55,160
then sold them to their best
customers around the world

741
00:42:55,480 --> 00:42:57,800
as high-yield,
mortgage-backed securities.

742
00:42:59,360 --> 00:43:01,440
All with the blessing
of the rating agencies

743
00:43:01,640 --> 00:43:02,960
like Standard and Poor's.

744
00:43:07,680 --> 00:43:09,520
Everyone took their share

745
00:43:12,200 --> 00:43:13,680
and closed their eyes.

746
00:43:17,440 --> 00:43:19,320
Ignoring the abnormal growth

747
00:43:19,520 --> 00:43:22,440
in the number of foreclosures
for default on payments.

748
00:43:27,880 --> 00:43:30,040
Eventually there were
too many people

749
00:43:30,240 --> 00:43:32,760
who were unable
to pay back their loans,

750
00:43:35,120 --> 00:43:38,120
and the subprime bomb exploded.

751
00:43:41,320 --> 00:43:42,400
In the 1920s,

752
00:43:42,600 --> 00:43:44,720
Secretary of the Treasury
Andrew Mellon

753
00:43:44,920 --> 00:43:47,840
happily exploited
the predatory financial system

754
00:43:48,040 --> 00:43:50,600
which led to the crash of 1929.

755
00:43:53,320 --> 00:43:54,640
His distant successor,

756
00:43:54,840 --> 00:43:57,120
Secretary of the Treasury
Henry Paulson,

757
00:43:57,320 --> 00:44:00,320
was also very well-placed
to know what was going on.

758
00:44:04,600 --> 00:44:05,800
Before becoming a minister,

759
00:44:06,000 --> 00:44:08,840
he had been chairman and CEO of
the investment bank Goldman Sachs,

760
00:44:09,040 --> 00:44:11,240
Lehman Brothers' main competitor.

761
00:44:14,320 --> 00:44:16,680
And Goldman Sachs
had been just as implicated

762
00:44:16,880 --> 00:44:20,040
in ripping off the poor
using the subprime swindle.

763
00:44:22,720 --> 00:44:25,640
The whole financial system
stood on the brink of collapse,

764
00:44:25,840 --> 00:44:28,240
bringing the rest of
the economy down with it

765
00:44:28,440 --> 00:44:29,840
like in the 1930s.

766
00:44:30,040 --> 00:44:33,640
If there are these severe stresses

767
00:44:33,840 --> 00:44:35,680
continue or get worse

768
00:44:35,880 --> 00:44:39,720
and we don't have
financial flows in our systems,

769
00:44:39,920 --> 00:44:42,520
then the problems are going to be

770
00:44:42,720 --> 00:44:44,760
very big problems
with small businesses.

771
00:44:44,960 --> 00:44:48,240
It's not just going to be their
inability to get loans to grow,

772
00:44:48,440 --> 00:44:51,120
it's going to be their
inability to sustain themselves.

773
00:44:52,120 --> 00:44:54,560
Unless taxpayers
halted the catastrophe

774
00:44:54,760 --> 00:44:56,600
by agreeing to foot the bill.

775
00:44:57,280 --> 00:45:00,480
The nation's top financial official
made the rounds this morning.

776
00:45:00,840 --> 00:45:03,600
He was pleading his case
to the American people

777
00:45:03,800 --> 00:45:06,920
for the largest financial
bailout since the US Depression.

778
00:45:07,240 --> 00:45:09,800
He's seeking 700 billion dollars

779
00:45:10,120 --> 00:45:13,120
for the US Treasury to buy up
those subprime mortgages

780
00:45:13,440 --> 00:45:15,280
and other risky loans and securities

781
00:45:15,480 --> 00:45:17,400
that brought
Wall Street to its knees.

782
00:45:17,720 --> 00:45:20,040
Some in Congress, where they're
working with treasury staff

783
00:45:20,240 --> 00:45:22,040
on a draft rescue bill,
want to know:

784
00:45:22,480 --> 00:45:24,600
why save the lenders
and not the borrowers

785
00:45:24,920 --> 00:45:26,880
who can't pay off those loans?

786
00:45:30,880 --> 00:45:32,160
The 700 billion dollars

787
00:45:32,360 --> 00:45:34,320
collected from American taxpayers

788
00:45:34,520 --> 00:45:36,200
saved Wall Street.

789
00:45:37,160 --> 00:45:38,880
The economy went into recession,

790
00:45:39,080 --> 00:45:42,200
but the general chaos seen
in the 1930s was avoided.

791
00:45:51,520 --> 00:45:53,000
The three million American families

792
00:45:53,200 --> 00:45:55,440
who lost their homes were seen

793
00:45:55,640 --> 00:45:57,360
as acceptable collateral damage.

794
00:46:00,840 --> 00:46:04,240
The recession also led
to a sharp rise in suicide rates,

795
00:46:04,440 --> 00:46:07,920
and amplified an epidemic of
self-medication with opioids,

796
00:46:09,880 --> 00:46:11,560
with at least 700,000 Americans

797
00:46:11,760 --> 00:46:13,760
dying from overdoses.

798
00:46:20,800 --> 00:46:23,560
In the 1930s, Congress inquiries

799
00:46:23,760 --> 00:46:25,320
led to laws being passed

800
00:46:25,520 --> 00:46:28,840
prohibiting financial products
like these subprimes.

801
00:46:32,240 --> 00:46:34,120
But in 2009 the same inquiries

802
00:46:34,320 --> 00:46:37,240
concluded that Congress
only had itself to blame.

803
00:46:40,600 --> 00:46:43,080
Congress now seems
shocked and outraged

804
00:46:43,280 --> 00:46:46,240
by the consequences
of its decision eight years ago

805
00:46:46,440 --> 00:46:49,080
to effectively deregulate
swaps and derivatives.

806
00:46:50,400 --> 00:46:52,720
Please stand and
raise your right hand.

807
00:46:56,320 --> 00:46:57,200
GOLDMAN SACHS DIRECTORS

808
00:46:57,400 --> 00:46:59,280
But Americans wanted to know

809
00:46:59,480 --> 00:47:02,800
why they had been forced
to pay 700 billion dollars.

810
00:47:07,440 --> 00:47:08,960
Got it, 105?

811
00:47:10,120 --> 00:47:11,360
Yes, Mr Chairman.

812
00:47:11,560 --> 00:47:14,160
Look what your sales team
was saying about Timberwolf.

813
00:47:15,520 --> 00:47:17,480
Timberwolf was a financial product

814
00:47:17,680 --> 00:47:19,280
that was loaded with subprimes.

815
00:47:20,800 --> 00:47:22,560
Boy, that Timberwolf

816
00:47:22,720 --> 00:47:24,640
was one shitty deal.

817
00:47:28,640 --> 00:47:30,560
- They sold that shitty deal.
- Mr Chairman...

818
00:47:30,760 --> 00:47:33,280
This email was from
the head of the division,

819
00:47:33,480 --> 00:47:35,840
- not the sales force.
- Whatever it was,

820
00:47:36,040 --> 00:47:38,120
it's an internal Goldman document.

821
00:47:39,440 --> 00:47:42,680
This was an email
to me in late June

822
00:47:42,880 --> 00:47:44,320
after the transaction.

823
00:47:44,520 --> 00:47:47,920
No, you sold Timberwolf
after as well.

824
00:47:48,120 --> 00:47:49,280
We did trades after that.

825
00:47:49,480 --> 00:47:51,520
Yeah, OK. It's the trades after...

826
00:47:51,720 --> 00:47:54,200
Some context might be helpful.

827
00:47:54,400 --> 00:47:57,320
Let me tell you
the context is mighty clear.

828
00:47:57,520 --> 00:48:01,040
June 22 is the date of this email.

829
00:48:01,240 --> 00:48:05,000
Boy, that Timberwolf
was one shitty deal.

830
00:48:05,200 --> 00:48:07,760
How much of that shitty deal

831
00:48:07,960 --> 00:48:09,880
did you sell to your clients

832
00:48:10,080 --> 00:48:12,800
after June 22, 2007?

833
00:48:14,080 --> 00:48:16,440
The pitiful banker,
the irate politician.

834
00:48:16,640 --> 00:48:18,080
But this was all just theatre

835
00:48:18,280 --> 00:48:20,880
designed to appease
the anger of citizens.

836
00:48:21,080 --> 00:48:23,200
It made no impression
on Wall Street financiers,

837
00:48:23,400 --> 00:48:25,320
nor did it change
their feelings of impunity.

838
00:48:25,640 --> 00:48:29,160
I do not think that we
did anything wrong.

839
00:48:30,840 --> 00:48:33,480
Not only did Congress not
take any proper measures

840
00:48:33,680 --> 00:48:35,280
to regulate anything,

841
00:48:36,320 --> 00:48:37,400
but Goldman Sachs

842
00:48:37,600 --> 00:48:39,680
and America's 24
biggest investment banks

843
00:48:39,880 --> 00:48:42,320
would use part of the bailout

844
00:48:42,520 --> 00:48:45,040
to pay themselves record bonuses.

845
00:48:59,080 --> 00:49:01,720
THE BUILDING OF THE FREEDOM TOWER

846
00:49:03,520 --> 00:49:06,520
TO REPLACE THE TWIN TOWERS

847
00:49:13,720 --> 00:49:16,960
In 30 years the average
wealth of Americans

848
00:49:17,160 --> 00:49:18,880
has risen by 20%.

849
00:49:22,880 --> 00:49:25,400
Meanwhile, for the wealthiest 0.1%

850
00:49:25,600 --> 00:49:28,000
it has risen by 6,000%.

851
00:49:31,400 --> 00:49:34,080
Which doesn't look
much like trickling down.

852
00:49:35,720 --> 00:49:38,520
This simply reflects
the extent to which capital

853
00:49:38,720 --> 00:49:42,240
has rewritten the statute
book over the past three decades.

854
00:49:42,560 --> 00:49:44,200
The US Supreme court today

855
00:49:44,400 --> 00:49:47,080
overturned laws on the books
for nearly a century

856
00:49:47,280 --> 00:49:48,800
and ruled that corporations

857
00:49:49,000 --> 00:49:52,440
can spend freely now
on political campaigns.

858
00:49:52,640 --> 00:49:55,040
Those who like this
decision say it's a victory

859
00:49:55,240 --> 00:49:57,600
for free speech. Those who don't

860
00:49:57,800 --> 00:50:00,080
say campaigns will now be drowning

861
00:50:00,360 --> 00:50:02,120
in corporate cash and influence.

862
00:50:09,320 --> 00:50:11,680
US CONGRESS

863
00:50:12,600 --> 00:50:14,280
In the name of freedom of speech,

864
00:50:14,480 --> 00:50:15,800
private companies

865
00:50:16,000 --> 00:50:18,200
can now spend as much as they like

866
00:50:18,400 --> 00:50:20,400
on US democracy.

867
00:50:33,240 --> 00:50:35,040
Like during
the industrial revolution,

868
00:50:35,240 --> 00:50:36,600
it is once again the richest

869
00:50:36,800 --> 00:50:38,920
who are calling
the shots in America.

870
00:50:47,160 --> 00:50:49,960
And like before,
ostentatious philanthropy

871
00:50:50,160 --> 00:50:52,600
is used to neutralise any critics.

872
00:50:55,000 --> 00:50:56,680
But while some famous billionaires

873
00:50:56,880 --> 00:50:58,240
have agreed to give away

874
00:50:58,440 --> 00:51:00,480
99% of their wealth,

875
00:51:03,160 --> 00:51:05,680
this conceals the fact
that the rest of America's rich

876
00:51:05,880 --> 00:51:07,600
actually give very little:

877
00:51:08,520 --> 00:51:10,400
less than 0.2% of their fortunes

878
00:51:10,600 --> 00:51:12,480
on average each year.

879
00:51:15,800 --> 00:51:17,520
722 billionaires

880
00:51:17,720 --> 00:51:20,480
and 22 million millionaires
who never speak

881
00:51:20,680 --> 00:51:22,960
or appear in public,

882
00:51:24,080 --> 00:51:27,080
but who use all
the legal tricks at their disposal

883
00:51:27,280 --> 00:51:28,760
to avoid paying taxes.

884
00:51:33,000 --> 00:51:36,040
Their favourite ploy is actually
very simple, and involves

885
00:51:36,240 --> 00:51:38,560
only paying themselves
a very small income,

886
00:51:41,360 --> 00:51:43,720
just enough to pay back
the interest on the money

887
00:51:43,920 --> 00:51:45,280
their banker lends them

888
00:51:45,480 --> 00:51:47,160
for their daily expenses.

889
00:51:48,760 --> 00:51:51,400
The super-rich prefer
to live on credit

890
00:51:51,600 --> 00:51:53,440
rather than pay tax.

891
00:51:57,000 --> 00:51:58,640
As for American multinationals,

892
00:51:58,840 --> 00:52:00,400
they legally avoid paying tax

893
00:52:00,600 --> 00:52:02,320
through the state of Delaware,

894
00:52:05,040 --> 00:52:07,960
a tax haven that
was originally designed

895
00:52:08,160 --> 00:52:10,600
by and for the local favourite,

896
00:52:10,800 --> 00:52:12,720
the petrochemical company DuPont.

897
00:52:16,600 --> 00:52:18,520
And the pretty town of Wilmington

898
00:52:18,720 --> 00:52:20,440
is used as the tax domicile

899
00:52:20,640 --> 00:52:22,920
for hundreds of multinationals,

900
00:52:23,120 --> 00:52:24,960
including Apple,

901
00:52:25,160 --> 00:52:28,200
Google, Coca-Cola, Ford,

902
00:52:28,400 --> 00:52:31,080
General Electric and J.P. Morgan,

903
00:52:32,760 --> 00:52:34,960
all brought together in this
unassuming building

904
00:52:35,160 --> 00:52:37,600
at 1209 Orange Street,

905
00:52:38,720 --> 00:52:41,680
where a legal firm
keeps a letterbox for them

906
00:52:41,880 --> 00:52:44,720
for the modest sum of 43 dollars.

907
00:52:50,880 --> 00:52:53,120
The New York Times 5 October 2011.

908
00:52:54,640 --> 00:52:57,440
Steve Jobs, the visionary
co-founder of Apple

909
00:52:57,640 --> 00:53:00,440
who transformed our lives
has died from cancer.

910
00:53:00,960 --> 00:53:02,640
He was 56 years old.

911
00:53:04,280 --> 00:53:06,040
Social media has been filled

912
00:53:06,240 --> 00:53:09,200
with tributes to
this genius creator.

913
00:53:10,560 --> 00:53:12,000
Apple's market capitalisation

914
00:53:12,200 --> 00:53:14,480
was now the highest in the world,

915
00:53:14,680 --> 00:53:17,320
stimulated by the sale
of two billion iPhones,

916
00:53:17,520 --> 00:53:19,760
the most expensive
smartphones on the market.

917
00:53:25,200 --> 00:53:28,040
Nine years later,
there were supercomputers

918
00:53:28,240 --> 00:53:29,360
capable of carrying out

919
00:53:29,560 --> 00:53:32,520
one million billion
operations a second.

920
00:53:33,960 --> 00:53:36,840
And algorithms
always want more profit.

921
00:53:39,200 --> 00:53:41,720
Welcome to Amazon Go.

922
00:53:43,120 --> 00:53:44,880
Use the Amazon Go app to enter,

923
00:53:46,000 --> 00:53:48,960
then put away your
phone and start shopping.

924
00:53:49,720 --> 00:53:51,160
It's really that simple.

925
00:53:52,040 --> 00:53:53,280
Take whatever you like:

926
00:53:53,480 --> 00:53:54,960
anything you pick up

927
00:53:55,160 --> 00:53:57,480
is automatically added
to your virtual cart.

928
00:53:59,440 --> 00:54:02,240
If you change your
mind about that cupcake,

929
00:54:02,440 --> 00:54:03,680
just put it back.

930
00:54:04,520 --> 00:54:07,720
Our technology will update
your virtual cart automatically.

931
00:54:10,760 --> 00:54:11,920
So, how does it work?

932
00:54:13,360 --> 00:54:16,120
We used computer vision,
deep learning algorithms

933
00:54:16,320 --> 00:54:17,560
and sensor fusion,

934
00:54:17,760 --> 00:54:20,320
much like you'd find
in self-driving cars.

935
00:54:20,520 --> 00:54:23,400
We call it 'just walk out'
technology.

936
00:54:29,520 --> 00:54:32,080
Because you don't feel
as though you're paying,

937
00:54:32,280 --> 00:54:34,120
you're more prone to impulse buys.

938
00:54:34,960 --> 00:54:37,840
These supermarkets also collect
huge amounts of personal data.

939
00:54:43,040 --> 00:54:44,720
And this is just the beginning.

940
00:54:50,080 --> 00:54:52,400
The GAFAM are in fierce competition

941
00:54:52,720 --> 00:54:54,720
to sell dozens of connected objects

942
00:54:55,680 --> 00:54:57,720
which provide a range
of helpful services,

943
00:54:57,920 --> 00:55:00,200
from the bathroom
to your kids' bedrooms,

944
00:55:00,880 --> 00:55:03,400
but which also record everything
that goes on in the home,

945
00:55:03,600 --> 00:55:05,080
including conversations,

946
00:55:05,400 --> 00:55:08,040
which are automatically
analysed by algorithms

947
00:55:08,360 --> 00:55:10,360
and regurgitated
when the time is right

948
00:55:10,560 --> 00:55:12,440
in the form of commercial offers.

949
00:55:14,760 --> 00:55:17,160
Some might call this
an assault on freedom,

950
00:55:17,480 --> 00:55:20,280
or surveillance capitalism,

951
00:55:21,880 --> 00:55:23,520
but the GAFAM don't care much

952
00:55:23,720 --> 00:55:25,600
about what people say or think.

953
00:55:28,520 --> 00:55:29,720
Their only aim is to exploit

954
00:55:29,920 --> 00:55:31,720
all of the available technology

955
00:55:32,040 --> 00:55:34,080
to accumulate ever greater profits,

956
00:55:35,560 --> 00:55:36,960
and will continue to do so

957
00:55:37,160 --> 00:55:39,280
as long as customers
continue to pay.

958
00:55:41,120 --> 00:55:42,840
It's as simple as that.

959
00:55:47,160 --> 00:55:49,680
In the meantime,
Google has become a behemoth

960
00:55:49,880 --> 00:55:51,680
that has bought out 100 companies

961
00:55:51,880 --> 00:55:53,560
across the tech sector,

962
00:55:53,760 --> 00:55:56,000
a sprawling giant
with a stranglehold

963
00:55:56,160 --> 00:55:58,200
on most people's digital lives.

964
00:56:00,760 --> 00:56:03,080
Apple has new headquarters of a size

965
00:56:03,280 --> 00:56:05,320
in keeping with its turnover,

966
00:56:06,960 --> 00:56:10,000
even if its letterbox
is still in Delaware.

967
00:56:20,880 --> 00:56:23,320
American capitalism
was founded on the quest

968
00:56:23,520 --> 00:56:24,760
for individual profit

969
00:56:24,960 --> 00:56:26,800
and free enterprise.

970
00:56:29,080 --> 00:56:30,120
Within such a system

971
00:56:30,320 --> 00:56:32,520
the concentration of
ever more wealth

972
00:56:32,720 --> 00:56:35,280
in the hands of
just a few is inevitable.

973
00:56:38,800 --> 00:56:39,800
And for the past 40 years

974
00:56:40,000 --> 00:56:42,760
American capitalism
has gone unchecked.

975
00:56:45,960 --> 00:56:48,280
By establishing a new
capitalist narrative,

976
00:56:48,480 --> 00:56:51,960
the conservative revolution
erased the main protagonist:

977
00:56:54,520 --> 00:56:57,320
the US government,
which retains strict control

978
00:56:57,520 --> 00:56:59,360
over the world's leading economic,

979
00:56:59,560 --> 00:57:02,200
technological and military power.

980
00:57:06,120 --> 00:57:08,880
To maintain its position,
America is only able to spend

981
00:57:09,080 --> 00:57:11,280
and invest such
enormous sums of money

982
00:57:11,480 --> 00:57:14,760
thanks to the taxes paid
by the cash cows of the system,

983
00:57:16,200 --> 00:57:17,800
small to medium companies,

984
00:57:18,000 --> 00:57:20,200
the poor and the middle class.

985
00:57:24,000 --> 00:57:27,680
The other notable absentee in this
narrative is its sole beneficiary,

986
00:57:28,440 --> 00:57:31,000
the industrial and financial elite,

987
00:57:31,200 --> 00:57:34,080
who grow wealthy
in complete secrecy.

988
00:57:36,480 --> 00:57:37,920
The only ones to take the spotlight

989
00:57:38,120 --> 00:57:40,600
are the heroic, visionary geniuses,

990
00:57:40,920 --> 00:57:43,240
whose only purpose
is to perpetuate the myth

991
00:57:43,440 --> 00:57:45,920
that in America, anyone
can become a billionaire.

992
00:57:50,480 --> 00:57:52,920
Anything that might
contradict this narrative

993
00:57:53,120 --> 00:57:54,600
is simply ignored.

994
00:58:45,280 --> 00:58:47,880
SUBTITLES BY PAUL MULLANEY