We're gonna make a lot of money today.

We're gonna make you some money today.

If you guys don't, you're fired.

[THEME MUSIC PLAYING]

NARRATOR: The School of Life is sending

some of YouTube's most popular creators

on a series of field trips

to explore some philosophy's most intriguing ideas.

This time, good friends

Hannah Stocking and Anwar Jibawi

two LA-based content creators

best known for their comedy skits

and with a fan base

of over ten million subscribers between them,

asked, "If capitalism has reached

the end of the road,

and, if it's broken, what kind of system might replace it?"

Anwar, what do you know about capitalism?

Capitalism, well, here's the thing.

Capitalism is um...

NARRATOR: A 60-second guide to capitalism.

For thousands of years, the rich were rich

because they owned land

and the poor were poor because they didn't.

With no opportunities to change their circumstances,

nobody questioned their place

or hatched elaborate schemes to get rich quick.

But, in the 1500s, a scientific and technological

revolution swept through Europe.

Over the next 500 years,

fortunes were made from a new capitalist system,

based on the spiraling profits that could be reaped

from an ever growing cycle of production and consumption.

But capitalism also created a new moral choice,

because as the wealth of the few grew,

so, too, did the suffering of the poor,

as they labored in the new factories in cities

they flocked to looking for work.

We could either be rich or virtuous.

Profit relied on exploiting workers

and selling people things they didn't need.

While being thrifty and honest meant a life of poverty.

The choice between profit and purpose

is more urgent now than ever.

As a soaring population

consumes increasingly scarce resources,

provoking a striking new question.

Could the future of capitalism look a lot like socialism?

We asked Hannah and Anwar to investigate

some of the pluses and minuses of capitalism and socialism,

by running rival cake stalls

according to the principles of each

at the Grand Central Market at downtown Los Angeles.

Hannah's stall is driven by key capitalist principles,

an overwhelming concern for profit,

prioritizing the needs of consumers

over those of the workers,

and clever marketing to stimulate desire.

HANNAH: If somebody's gonna buy a cupcake,

they're gonna want edible sparkles and gold flakes on it.

And deliciousness.

Anybody want some cupcakes, five dollars only.

NARRATOR: Anwar's cake stall

is governed by key socialist principles.

Because profit seems to rest upon exploitation,

the only goal is to break even,

prioritizing the needs of the workers

over those of consumers,

providing customers with only the basics.

Our cupcakes are three dollars.

ANWAR: Cool. Agreed?

-ANWAR: Cool. Awesome. -Works for me.

NARRATOR: A long standing argument

between capitalism and socialism

hangs on a heated disagreement over three key concepts.

Profit, competition and happiness.

In capitalism, people use their money

to start businesses, or lend their money to others

expecting to make a return on it.

Socialists say that the search for profit

inevitably exploits the workers,

by not paying them decently

or by making them work too hard.

We're gonna make you some money today.

You guys don't, you're fired.

You gotta work hard enough to get rewarded.

Why do you think parents give you chores

and then money at the end of the day?

You have to work for the money.

That makes sense. But there's a limit.

We're not trying to rip anyone off.

What if we don't sell?

Don't worry, you'll still get paid. Yeah.

NARRATOR: But capitalists say

that in the drive to make money,

they become focused on customer satisfaction,

in a way that socialists rarely are.

We have four flavors. All of them are $5 each.

Five bucks? That's so much money.

-It's probably the best cupcake you'll ever have. -Okay.

NARRATOR: This is the paradox that capitalism's earliest analyst, Adam Smith,

called the invisible hand of the market,

whereby capitalism forces the most selfish people

to think about the needs of others.

Not because they're kind,

but in order to drive up profits.

Out of selfishness, business will be super-attentive

and, in a way, kind to customers.

Thank you guys, so much, for your business.

NARRATOR: In a deep sense, greed is good,

or at least it may do good.

Capitalists believe that humans are lazy, risk-averse creatures

who naturally take the easy road,

and won't invent or invest unless forced to

by the threat of someone else grabbing their profits.

We're gonna go get something to eat.

Can you watch my stand, please?

-What? -Yeah, is that cool. Thank you.

ANWAR: Let's go.

NARRATOR: A so-called free market

is essential because only competition

creates an incentive for people to innovate

and make their products and services better.

HANNAH: People are just naturally drawn to ours,

which is gold, balloons, signs, boys yelling.

And over there...

NARRATOR: Socialists will say that the free market

leads to further exploitation of workers

as firms undercut each other on price

by pushing down wages and conditions.

Arman,

I don't know if I could afford to keep you here any longer,

so we're gonna need to send you home early.

You want me to go home, right now?

HANNAH: Right now. Yeah.

NARRATOR: Socialists prefer

the opposite of the free market.

A monopoly: one cake stand for everyone.

Which is the very thing that capitalists say leads to stagnation

and the failure to provide value for customers.

My workers obviously love me way more than they loved you.

Yeah. You're a popular boss,

but you're not gonna be popular when you run out of business.

NARRATOR: Socialists argue that profit relies

on selling people things

that they desire but don't need.

Things like exotic fruits, expensive wines and cupcakes.

Socialists prefer a simple economy

based on needs, not desires.

We've got red velvet, chocolate, double chocolate.

-Guys, you want some cupcakes? -[GIRLS SCREAMING]

She's profiting off everyone here.

ANWAR: And she's ripping everyone off.

NARRATOR: Capitalists would say that in a basic economy,

where people only buy what they really need,

most businesses would quickly go bust

and tax revenues would collapse.

Everyone would suffer, especially the most vulnerable.

Capitalists don't think we desperately need fancy cupcakes.

But the surplus generated

from this kind of unnecessary expenditure

is what creates the wealth

which pays for things like schools and old people's homes.

It seems we face a choice.

A free market economy driven by profit,

which strives to please customers but exploits workers,

or the workers who do well can be richly rewarded...

So, here's your wages and here's your bonus.

Thank you so much, boss.

Thank you for making me money.

NARRATOR: ...or a tightly controlled economy

focused on satisfying basic needs,

where workers are put ahead of customers,

but where a lack of competition

means that there's never enough profit

to escape from poverty or innovate properly.

-This is for you. -Thank you.

-This is for you. -Thank you.

This is for me. Cheers.

WOMAN: Cheers. [LAUGHS]

NARRATOR: Part of the problem

is that the capitalism versus socialism debate

is often presented as an "either-or."

I think both are good in their own ways.

I just think that if we get little parts from each system,

there's a good way of finding, like, a middle ground, you know.

Think you're onto something, Anwar.

Yeah.

NARRATOR: Perhaps both sides

need to steal each other's best lines.

From socialism, capitalism should steal...

And from capitalism, socialism should steal...

What else might each side learn from the other?

Tell us in the comments below.

I hope you guys enjoyed watching this film.

Make sure to subscribe to The School of Life channel.

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Right over here.

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