Inequality – how wealth becomes power (1/3) | DW Documentary

This is the airfield for private planes at Düsseldorf airport Businessman Christoph Gröna is one of the super-rich Germans who has a lot to say in this country, but something that is rarely heard in public is worth millions and the private assets and the company share everything and self-made, let's say you have 250 million, you can throw it out the window and they will come back in the door, you can't destroy them, you can buy cars and their value increases, you buy houses and real estate. The more you buy gold and the gold prices rise, you cannot destroy money by consuming.

We have been following the Kona shores for six months through him and many others. This film looks at

inequality

in Germany. A first look. Germany is rich. and

power

ful country, full of opportunity, but if you look closely you will see that

wealth

is more unequally distributed here than in any other industrialized country, success often depends on your background. Why do differences threaten social cohesion and democracy? To find some answers. We go around the world and talk to a Nobel Prize winner and other experts who have deeply analyzed the issue of

inequality

. The world is at a crossroads today.

People feel that they are being robbed of control of their nation because inequality is the most pressing social problem before us today welcome to the land of inequality it is almost 8 in the morning in Berlin it is time my house the driver is already waiting when the boss arrives he has to get going immediately Christophe Colonna the son of a teacher has reached the top he often works 20 hours a day he is what is called a great achiever I don't have a driver because I'm lazier I think I'm too good for that on the contrary I like to drive I'm a passionate motorist but the question is: Why does my company pay me to sit behind the wheel or work in a corner?

He makes his money from real estate. Hardly any company in Germany builds as much as its CG group and in the real estate market prices only go in one direction upwards. The company has just bought a very special building The developer wants to turn his Stieglitz a Keisel office block into the tallest residential tower in the city The personalized governor is always up for a challenge and wants to reach the top in less than five minutes a race against himself 30 floors 120 meters 600 steps an employee times him with a stopwatch he's half a minute faster than last time angry well, it was pretty perfect but he could still do better.

I can still remember when he was finishing high school. I saw Boris Becker when he was at Wimbledon and I thought: wait, I'll be up there with you, you know, today an apartment here will cost between five and ten thousand euros per square meter from up here you can see many of his construction projects you can really follow the trace of the last 20 years here in Berlin about 4,000 apartments and another 3,000 are under construction we have played an important role in housing construction here one stop this is the Coronas headquarters in Berlin every company like this is a kingdom with the boss at the top and the staff below him corner the company now employs 500 people they all have good contracts he says his brother's 2015 tax return there is a lot to pay one of his most important employees is his personal assistant Angelique Lisa you still in Dusseldorf, then he will go to Zurich, tomorrow he will return to Berlin on Friday and Leipzig and then he will be away for the long weekend and what about the hours of sleep?

Not much, rumor has it that between four and six hours I don't think it's much more depending on how busy you are or if you're traveling you can tell when her emails come in I'm an assistant like she has at least the same level of stress that I have the boss is as good as her assistant I don't know note with her she's only been on the job for a few months so she's still fresh but she also has the constitution for it Mario Lauterbach guards the door downstairs he has a permanent contract as a security guard for half a year he gets gas outside, yes, but I went to the school for 14 years.

I speak two or three foreign languages, so if I ever had the opportunity again and had the initiative, I could imagine becoming a lawyer or a judge, that is something that interests me a lot. Bach earns about 2,000 euros gross per month, which is enough for a modest living, but not much more. On the other hand, his boss has been able to accumulate millions of euros and assets. Can the guard live off what he earns from me? that's what counts, if he can, then I've done my job as an employer, if I pay a guard so little that he can't live off a salary, then I've done something wrong, so you think comparing him to you is silly, of course.

It's stupid I stayed home and haven't gone to work because I'm sick three times in 30 years Ask my guard how many times he's been sick If I have a herniated disc I come to work If I have a 40 degree fever I come to work If my My wife fights with me and keeps me up all night. I still come to work. Ask my security guard. Comparing us is neither fair nor correct. The justification is a spontaneous abortion. Fired. Fish dish. Will you ever be able to afford a house with a pool? Of course not, but he.

He doesn't want that I know my security guards I know my caretakers Would you like to trade places with his moan? He didn't say yes right away I guess if I had to answer spontaneously my first answer would be no and I think if I thought about it for a long time it would still be no, that actually has a lot less to do with him as a person or what he does, it's Just a matter of my own attitude, I wouldn't like to have that much responsibility, would you like to have? a house with a pool yes, but perhaps not here in Germany, but in Greece, while one can only dream of a house with a pool, the other can afford several properties.

Kristoff corner has a villa in Berlin and a penthouse in Cologne with a view. from the cathedral but little free time how much distance there should be between those in the middle and those at the top and how big the gap is in reality there is a lot of data on the poverty of the poor but very little on the asset register of the rich would help, But there aren't any, so a team at the German Institute for Economic Research is trying to find out more. If you are trying to represent the distribution of

wealth

in Germany graphically, you can do it very easily on an A4 size sheet of paper.

On paper and with a little looking, you can imagine a coordinate system like in school with an x-axis and a y-axis and with the y-axis this here I show the amount of wealth in which you can easily show ninety-five percent of the population. this sheet here in the area because a portion of the population is indebted or even insolvent and then there is a relatively wide area where assets are practically zero until it finally starts to increase exponentially on the outer edge instructors this describes 95 percent of the population But the question is, of course, how far away is the richest man?

According to this manager, the magazine places the Reimann family business at the top of its list of the rich in Germany. The family is estimated to be worth thirty-three billion euros. If you calculate 95 percent of the Germans on an A4 graph sheet that Aemon would be six point six kilometers further away, each era has its mother lode in the past, the car manufacturers made a lot of money even before, the families that owned the big ones commercial houses became enormously rich now the real estate developers have joined them gustaf corner rice started here in leipzig 20 years ago he invested when prices were below everything was ruins or scrap I love everything you see on the left and on the right ha been remodeled, built and rented by us his company says it now builds one in every three new apartments in the The city, but Cavanaugh's Korea Coast, has been unusual.

He wasn't born as a boss. He used to work on construction sites. Every two stones have been replaced here with experience and a sense of proportion to create a whole and it helps if you have worked on scaffolding. so yourself I can do masonry I can lay concrete I can lay steel I can plaster walls lay tiles lay lawns that was my career the company started as Christophe grew Nabokov Steen's to construction services then we took on specialist construction and then contractor and development work of projects until we became the company we are today Kona has also invested in this former industrial district this is the class family Thomas and Kirkland with their two children live in a rented apartment around the corner they would not mind having one more Well It must be said that it is an oasis in an urbanized environment.

Each building has nine classic apartments and two penthouses, one large and one small on top. I'd like to show you all the floor plans in the trailer, so here we go. About where the woman is right, no, the house is next to the houses themselves or at least 20 meters behind the attics, there we have a four-bedroom apartment of 123 square meters with a 60 square meter roof terrace. I think we have to be realistic, the attic is not what we need or what we can afford. I take a classic four-room apartment with a shared balcony or garden. I think that's what we would be looking for and that would interest us.

So let's take a look at a flat. Plan parents would practically have a separate wing, a sandpit and a recreation area here, so in general the target group is young families. Yes, typical young families. Give me an idea of ​​the scale. I would be interested in a four-bedroom apartment on the first floor. at three thousand four hundred and fifty euros buying an apartment abroad would cost four hundred and fifty thousand euros the classes are a typical middle class family both have good jobs buying property used to be the way to start accumulating assets was Matthias tarbush In the speech we were 30 years old before we could start thinking about our old age and accumulating wealth to date.

I'm almost 40 now and we still haven't managed to save much in terms of reserves. I even go to the minimum. amount of capital so that the banks can give us a loan a sticking point the screens not the food the other fuel 94 percent of the buyers here are not from Saxony, which means that currently this is a market in which normal Saxons They cannot participate even with each other. Michi codes the family class, she is not the only one with few possibilities of owning her own home. The richest 5% of Germans own half of the apartments and houses.

One in two people does not own any property. Most Germans rent and have to pay more. and more in terms of living space, the purchase price of an 80 square meter apartment has skyrocketed in the last 10 years. Leipzig is an extreme case. Only 10% of people here own real estate. 60% of all new buildings and 94% of renovated ones. You've become biased from out of town, don't you want to get your shoes dirty, sir? I can feel quite annoyed as the Klaus family dithers, others are snapping up the houses on the market, did he make a killing again, did he, did he get another bargain? we continue to have repeat offenders here they buy one house after another this is the third truth it is the second the second complete and the apartments before we went to eat and I told him that it would not cost less than 4.5 and he got it for 3 well I'm crazy today the time to make money here with the standard and my company needs it urgently that is not a crime no, I do not think it is that bad the real estate market is symptomatic that allows those at the top obtain more profits, while others can hardly afford to living in your own city behind this is the most basic question: do gains for some mean losses for others?

Today's typical property buyers are wealthy people, well-off retirees, yes, and investors. The others, like Thomas Klaus and his colleagues, can only look honestly when I look at what is being built in the Sluicey district. I need a practical apartment to live in and I don't think they are building it to live in. build them as investments and I can't join that game, none of my colleagues can either, that probably also creates housing that doesn't meet the needs of the city and the majority of the population, it's scary because many people are falling behind the banks. decent there are many parts of life look who they are today you find one place with high priced apartments and another where people who just couldn't afford to live in them anymore had to move it's a horrible situation when you say that for any reason reason You have to leave your apartment but you would like to stay in your neighborhood, but that is not possible.

In a neighborhood in eastern Berlin, the Greater Schlosser has been the scene of growing conflict between residents who fear losing out financially. and the man who was accused of making the deal of his life here arrives Gustov kkona and his security guard stays close to him when he is here he normally receives police protection. I'm going to disturb your lunch hour today soLet me at least say good morning to you. Korea has been the focus of an angry reaction. His opponents filmed the first meeting with residents and protesters. Let me ask you. Is this a dialogue?

It was nice if they met me for the first time. We could call it the birth of the boogeyman they had. see a businessman who has arguments on his side and does not back down and it is precisely this stupid thinking that prevails in society, there is always a direct connection, he makes money and has become rich, so we must have stolen it from him To someone, it's about politics. He charges 12 euros per square meter and no one can afford it. We have smaller apartments of 35, 40 and 50 square meters that any nurse can afford even for 14 euros per square meter, as long as it is well made and has plenty of light.

She would love to live there. of 60 square meters there for 8 euros per square meter Clara knows that many of her workers or police officers who protect her had difficulties finding affordable housing but she says that her millions of square meters are not the cause of the problem, but part of the solution. How do you strike the right balance between rewarding achievements and allowing everyone to participate? What consequences does inequality have for society? The real overall conclusion is that inequality is a way of making people feel more distanced from each other it stretches the social fabric as expressed the social fabric separates us physically, experientially and psychologically there is nothing necessarily wrong with inequality of course , people have unequal endowments of intelligence and beauty and they have different parents and what I start to worry as a sociologist is when people accumulate dynastic wealth and dynastic wealth means a lot of money that is transferred from generation to generation because that starts to stabilize systems of inequality throughout society and that restricts the opportunities available to everyone else on the coast of Ghana.

Ghana may have reached the top, but even for him there is still a glass ceiling that you cannot buy your way into. world of dynastic wealth. You can only be born in it. Kirsti on fly: the best trace of her family tree ever. We go back to the year 1135. She is a descendant of the fogers. One of the richest families of the Middle Ages. You can always use a winch to pull the deer. If you have killed a deer that typically weighs more than 100 kilos, then you need mechanical help. Putting it in the vehicle would seem a little strange when you are driving around towing a dead deer on a trailer, people sometimes find it a little strange that the car they use is to transport dead deer like an old Austrian military vehicle when Bechtolsheim uses it in the 300 Hectares of forest he owns somewhere in the center of Germany.

We are not allowed to say exactly where his condition was to let us film it. Discretion is everything. so to speak, Keltie. I think it was the editor of the writing site Countess den Hoff who once said that you always have to own everything you love. I can understand the question philosophically, but if I answer according to my natural instincts, I would say yes, I like to own. Things I find beautiful, man, rushing to the gardenia, demonizing Shirin, printed by citizens, not by Eagles, had the great inequality that exists, space for your parents is necessary for the economy and is inevitable, obviously, if you are a entrepreneur and you have inherited something and you keep it. functioning properly, you will have more than someone who is just an employee.

Do you think things are generally fair in Germany? Yes, in general, I think so. I don't feel any real sense of injustice and the part of most people in the streetlights Lord after the stars, may be not having it during the week in Hawthorne's best works overlooking the main river in Frankfurt, he directs what he calls the family office, this exclusive establishment is essentially what used to be known as a private bank, perhaps I should add that this is one of the few old patrician houses in Frankfurt that survived the Second World War intact this old terrazzo floor o this handle this railing is not often found in Frankfort today these display cases you can see the remains of what was once patrician food culture so special Oscar Moffitt you have to imagine a family office simply as an office that looks after the interests and all the financial needs of a single family or an individual ranging from say five or ten million to several hundred million are not Even the employees know all the names of the bank's customers.

The rich come through personal recommendations. They know that at the moment of battle they will be offered something that normal savers can't get from a bank these days, interest and return on their money. We have worked. together to create an asset structure for the future, let's say you want to invest in both real estate and with real estate you also have apartments and commercial buildings and maybe even logistics stocks, maybe it's thirty percent that you could put a 10%. pensions and 10% in cash, the rest is invested in other things, private equity, forestry, etc., we help families maintain their fortunes for generations.

That's what we aspire to. The legend surrounding Germany's post-war economic recovery sometimes evokes the notion of a kind of monetary zero hour in which everyone supposedly had to start from scratch if they wanted to get rich they had to advance according to the myth. What is the photomask? Noveck, shortly before the First World War, a former official of the Ministry of the Interior published a millionaires' almanac. In Buddha Shanda, numerous names that seem very familiar today are still found in these books. If you look at the lists of the rich, you get the impression that old money plays a very important role among large fortunes.

Today I hide incredible weapons to move our prejudices align the transition upwards dean dean the gap between those who only have jobs and those who belong to the upper class has increased enormously if I take as a clue that, I think that if people understood how deeply unfair It was the economic competition in the modern global economy economy they would really be up in arms it is the end of Thomas' class shift after visiting the construction site he and his wife considered real estate agents offering at this time the family essentially lives off their income his wife has reduced her work to take care of the children the children are eager to tell their father the events of the day they visited their grandmother once the children go to bed the parents talk about buying the apartment in the middle from the city when this dish happened join us mommy first you are Everyone excited and a little dazzled by the idea and the beautiful project and by the question about who the project is aimed at.

Well, for young families like yourselves, on the one hand it is flattering, but on the other hand, when you hear the price and think, I repeat, these are dimensions in which I say that a family like ours is outside of this, we do not expect an inheritance nor any other source of external money, we have to earn it monthly four hundred and fifty thousand euros, I don't even know how much annual income it would be, since I enter the Severan, so at some point you start to worry that the step down to the middle class low is much closer than the step towards the upper middle class.

I think everyone has the same feeling. I'm lucky to have a great employer. I feel like I have hit the jackpot in Leipzig, but that doesn't mean we can keep up with the development of the real estate market, which is under attack. The classes are not poor, but they belong to a group that has been under pressure in recent years the middle class people who do not have fortune but have to work for prosperity in recent months thousands have submitted comments online for this film project under the hashtag in Graceland, for example, they have reported their salaries: an industrial employee in the automobile industry 1,600 euros net a social worker in a rehabilitation clinic 1,648 net a civil engineer almost 2,000 net a specialist doctor work 12 years of training 2,768 net income of 3,500 euros places a single person in Germany's richest 10% of wage earners.

The accumulated wealth is especially unequal: half of the population has less than 17,000 euros in reserves that would allow them to buy a VW Golf model basic, all shoes and clothing for 1.6 children from birth to 18 years or just 3.3 square meters of a newly built apartment in Frankfurt the vast majority of profits and income have gone to people who They are at the top of the income distribution in the top 1% of the income distribution and the incomes of middle class people and below the middle class essentially do not have a very large middle class is necessary for peaceful societies and democratic and if there is now polarization in rich countries and if there is a shrinking of the middle classes then we really have a problem or we are really moving into a new territory that is still unexplored in the US.

The question is: can there really be a successful democracy with a very polarized citizenry, with many rich people but also many people who are below the middle class level? The world today is at a crossroads that if it does not try to write a new social contract those who have been hurt will repel the large number of people who have been hurt. There are some places where all social strata come together, but even where they exist does not mean that the group of the rich and the middle classes actually know how they are playing tactically Costa Fiona has paid for a place in a luxury suite in Leipzig's main football stadium we in the luxury zone pay for their cheapest tickets through of our high contributions, each one makes his own contribution, maybe that guy pays 20 years for a ticket, in reality I pay 2,000 for mine.

There is some justice now in the Frankfort family office. The bank's own Forester has come calling. He brought all the figures. Let's start with Finland. The Christian fund Bechtolsheim uses its clients. money to buy forests in Finland New Zealand and Uruguay what has benefited us you can see here in the prices of wood in Finland last year's development spruce and pine have experienced a large increase since 2016 and that benefits us the solution from Sweden copy mm -Hmm, authorities, German forests are incredibly expensive, there are very few areas available and when an area opens up people jump on it like crazy surprises, it has doubled, tripled, quadrupled in the last 10 or 15 years, of course, this is also due to low interest rates. that currently we have people looking for everything they can find where money can be invested where it can be invested safely or very profitably it is an intrinsic conflict can we talk briefly about Uruguay?

What does performance look like relative to our plans? Well, Uruguay is our most conservative project. This is a new global form of capitalism. Financial capitalism to discover how the system works. Sociology statistics. Brooke Harrington first trained as an asset manager. It is a global profession and that is why I had to go to 18 different countries. know from the Cayman Islands and the British Virgin Islands to the Cook Islands in the middle of the South Pacific, the Seychelles and Mauritius, New York, London and Switzerland, everywhere, one of the things you learn in wealth management school is to consider the world as a kind of legal financial shopping mall and you go to each different state in the world the same way you would go to the stores in a shopping mall, choosing the laws and conditions that are most favorable for what you want to do or what your client wants to do with a particular asset, so what you need to know is that an estate manager is the best place to get the laws you need to do what you want to do with the art collection, the yacht or the family business.

The office is the starting point of a global investment chain. The rich entrust their money to the best of all time, among other things, invest with these fund managers and send it around the world, ensuring that it earns much more interest than, say, a normal savings account. I'm glad you're here to say it from the beginning. We are very satisfied with the performance you have achieved so far. We are currently at nine point three percent since the beginning of the year. They say the secret to their fund is automated investing. it has an algorithm that scans the global economic situation and converts it into traffic light signals green means the computer buys a lot of stocks and when the signal jumps to yellow it will read less yes the curve is flat and you can see it because the signal is not green dark we do market timing we are the ones who guarantee that a client can re-enter the market because we operate without emotions we have no emotions our entire setup our entire algorithm is purely quantitative normal geopolitical upheavals like those ofSyria or Ukraine, none of them have such a global economic dimension that could really desynchronize the world economy and that is our reference point where we would intervene at the traffic light;

It has to be an event that unbalances the world economy and in at least history no conventional war has done what many people would say now here are six well-off people sitting at the table and all they are doing is trying to increase their wealth For many you are a kind of economic inflation, what frankly, you don't tell them anything because nobody ever asks. I think it's quite complicated in Germany, everyone thinks they can join Deutsche Bank as a trainee at 18, then become an authorized signatory and finally head of department and then retire at 65. as a b class manager with a palm tree in the office and a chair with armrests, that world is definitely over, that's for sure, in the context of modern investor capitalism there has been this massive shift of

power

from work to investment, which is called the dissonance cloud of financialization.

These are very clear elements of an artificial world for which only an abstract amount of money counts and has disappeared, but not the local quality of life among people in the markets of society. Now you can get rich by being a rentier capitalist who is not from your own country. don't work by the sweat of your brow as they say, but by putting your money in the right place and at the right time the right things Tomasz class has been working as an engineer for siemens for nine years, is part of the works council and could imagine staying here until you retire with or without palm tree we have employees who have trained here they have worked here all their lives it is like a family it is not just work it is a little bit of family and a little bit of life the staff and I are very attached to what we We do here together during the day, don't worry: Siemens recently posted annual profits of six billion euros, but then worrying rumors began to circulate, investors were supposedly putting pressure on the company saying that this plant was not suitable for the future actually.

Nothing is safe, not even everyday life living in a rented apartment is unsafe, we are currently secured by a single income and that is now very very unstable, suddenly you realize that when you get to a situation like the one we are in now , students really insist on being a few blocks away from the Siemens plant. cassava corner has invited all of his staff to the company Christmas party. just bought this old post office station. His wife Anna and his youngest daughter are the first to arrive, then the boss arrives. many things depend on it. His employees are also worried.

For the same reasons as Thomas Klaus, in recent weeks the financial press reported that investors have taken 50% of the company's shares before, although dear friends, family, it is incredible to be among you, you are my motivation. where is my strength, yes, I think a letter from the management, perhaps signed by me, convinced him that we are still the same family, no matter who owns the shares, no matter who will have a say and so on, yes , we do. Capital markets, yes. We have to refinance ourselves, yes, we have to reposition ourselves. I will also do so, no matter what position I will be available to you in the future.

What we have achieved so far is to be a truly great and big family. Have a nice afternoon and thank you, at some point every company reaches a certain size where its banking and financial structures are no longer sufficient. I have to deal with financial institutions and all that. If I have that under control, I will remain in my position, but if not. Then I will be eliminated faster than you can imagine, it seems that the whole world is being shaken by large amounts of money, it is a game that few can play and even fewer can win, but when those at the top stopped a jump ship and the At the bottom they have to worry about a crisis, what effect does that have on a country today and in the future?