The Four Horsemen (film)

I have just seen 'The Four Horseman' a documentary by Ross Ashcroft and it is a brilliant look at the present global inequality and finance problem. Near the end it also suggests a solution (see the link below). I'm not an economist, but I like trying to understand things, and also problem solving, so here's what I understood of the film, with a few idiosyncratic bits added, not directly mentioned in the film:

First the problem. In the 1970s the post world war consensus started to erode and Anglo-Saxon governments gave up the gold standard (money backed by gold) and adopted fiat currency which allowed them to print money from nothing. Then the repeal of the Glass-Steagal act in 1999 suddenly meant that banks could gamble with savers' money again, as before 1929. All this has allowed the development of a parasitic banking elite who have become rich enough to lobby governments to syphon the taxes of the relatively poor towards them. This was seen in 2008 when tax money was used to cover banks' gambling losses, and is seen now in austerity where community-owned assets that people can't do without, like the UK's National Health Service or Royal Mail, are being broken and sold off cheap to the rich to provide constant income for them. It can also be seen in the west's 'help' for developing countries as a way to transfer wealth from the poor taxpayers in the west to rich interests working there.

The money printed from nothing by governments goes to these banks first. This means they can buy things cheaply, and by the time the money filters down to everyone else it buys much less since the money has caused inflation. Ordinary people eventually find they can't buy what they need and this worsens until violence is their only hope. It is also pointed out in the film, somewhat heartbreakingly, that the bankers have realised that ordinary people are honest, so they are encouraging them to get into debt. For example encouraging house buyers in the 1980s, and students now, to provide a constant income stream for the banks.

The solutions suggested by the film, include: 1) going back to the gold standard because gold is real, it is outside the control of politicians and therefore banks, and the supply grows slowly so would cause stability in prices, 2) cancel debt as done in 1947 in Germany (and savings too, to balance it), 3) instead of taxing what we produce (income tax), tax what people consume or own, a global wealth tax as suggested by Thomas Piketty in his new book. This is fairer and would help to level the playing field. 4) allow workers to own a stake in their factories to motivate them, and limit salary differences to, say, 6:1, as suggested by Plato, to put all of society in the same boat and therefore able to empathise with each other.

Forgive my incomplete summary, but the film is brilliant and free on youtube here.