The great 20th century economist John Maynard Keynes once remarked that “ideas shape the course of history”. In the case of economics and economic systems, the ideas of economists not only shape history, they help decide our living conditions and the fate of nations. Keynes also noted that while our business and political leaders, what he called “practical men of affairs”, may protest that they not driven by ideology, they are indeed the “slaves of some defunct economist”.
This 3-part video series is based on the best-selling book by Pulitzer Prize-winner Daniel Yergin and Joseph Stanislaw. It takes the viewer on a historical tour of the battle of economic systems and ideas through the 20th century. It includes excellent film footage and interviews with many of the political leaders and economists who were central to these battles.
The series has a distinct bias which is partly born of the time when it was written and partly the viewpoint of the authors. It was originally written in 1997 and then revised in 2002 to include the events of the 1998 Asian Financial crisis. The video series was first shown on PBS in 2003. This means the content is at least 10 years old. A lot has happened since then. The authors are distinctly pro-free markets, pro-capitalism, and anti-government intervention in economies.
Note: this pro-markets, pro-capitalism, anti-government position is most often referred to as “neo-liberalism”. I should say it is most often referred this way outside the U.S. or in U.S. academic talk. If this confuses you because you think of Republicans, U.S. conservatives, and Fox News as being anti-liberal and yet pro-capitalism, pro-markets, anti-government, don’t feel bad. Historically the term “liberal” emerged from European politics and economics in the 19th century where it meant pro-markets, pro-private property, pro-capitalism, and anti-government. Outside the U.S., it still tends to mean that. However, political discourse in the U.S. flipped the term around 20-40 years ago. Now in the U.S. only does “liberal” mean pro-government intervention and the opposite of pro-markets, pro-capitalism. In other countries, the political positions described as “liberal” in the U.S. are more often described as “social democrat”. Got that? Yeah, it’s confusing.
At the time the series was released, it appeared that this neo-liberal view, the pro-markets, pro-capitalism, pro-Globalization view, had indeed “won” the battle of ideas. It appeared that, led by the U.S. and the U.K., this view was ascendant throughout the world. The road to capitalist Globalization was not smooth, though. At times during the 20th century it appeared that communism, socialism, or Keynesian managed capitalism would “win the day”. The series recounts how we got to our present state of Globalization.
The events of the global Great Recession (Lesser Depression?) that started in 2007 and continue today have cast a lot of doubt on the positions and claims asserted in this video series. The track record of many countries in responding to the great crash/recession of 2007-09 has led many economists to revisit Keynes.
Key Themes and Points Articulated in The Commanding Heights
- The current global economy is the outgrowth of a century of trial-and-error experimentation with different political and economic ideologies.
- The core battle of ideas is an argument about the best way to promote the economic welfare of society.
- For most of the last century the argument has centered on the role that central governments should or should not play in economic activity.
- For much of the last century the argument appeared to swing in favor of central planning and government control.
- More recently, the pendulum has swung the other way, toward greater reliance on market forces to determine the allocation of resources.
- The transition away from central control has increased productivity and expanded wealth, but has also been wrenching for the peoples of many nations.
- In recent decades, technology has also fundamentally changed the way economies behave and interrelate. We are just beginning to understand how to reap the benefits and manage the risks these changes have introduced.
- While the growth of globally integrated markets has expanded wealth and raised living standards in many parts of the world, there have also been destructive effects. The Asian economic contagion of 1997-8 is one example.
- Because the benefits of globalization have not been distributed equitably, the gulf between rich and poor continues to threaten the stability of the system.
- Equipping dispossessed populations to benefit from open global markets and entrepreneurial capitalism constitutes one of the major challenges of the 21st century.
What Episode One Is About
From the PBS Commanding Heights website
“The social and economic catastrophe left in the ashes of World War I ignited an intellectual and political struggle that would last most of the 20th century — a battle between the powers of government and the forces of the marketplace over who would control the economies of the world’s great nations.
“The Battle of Ideas” tells the story of how, for half a century, the world moved toward more government control — from the centrally planned economies of the communist world to the “mixed economies” of Europe and the developing world to the United States’ regulated capitalism — and then began to move away.
The ideas of two economists lay at the center of that struggle: John Maynard Keynes, the elegant Englishman who advocated government intervention to control the booms and busts of capitalist economies, and Friedrich von Hayek, the Austrian emigrant who argued that government intervention in the economy would erode human freedom and was doomed to failure.
In western democracies, Keynes’s ideas would dominate for decades, until the economic crises of the 1970s forced political leaders to look for new ideas, and rediscover Von Hayek’s theories. In the 1980s, the simultaneous emergence of the conservative governments of Margaret Thatcher and Ronald Reagan, who both embraced Hayek’s free-market ideas, set the stage for a worldwide capitalist revolution.”
Your Mindset While Watching
I urge students to keep in mind that the series was last updated in 2002. At that time, while the U.S. war in Afghanistan had begun, the U.S. war in Iraq had not. More importantly, the events of 2007-2008-2009-2010, the global financial crisis and the severe global recession had not happened yet. While this book/movie is eager to bury the idea of government involvement in the economy, the events of 2008-09 showed that government involvement may very well be necessary. The continuing poor state of the economy and lack of full recovery in 2010-2012, particularly in Europe, casts further doubt on some of the ideas promoted in the video. I urge students to watch this video series with an open, yet critical mind. There will no doubt be a lot historical facts that are new and interesting, yet you may wish to question some of the authors’ conclusions. Nonetheless, this video series provides a good summary of the “mainstream consensus viewpoint” a few years ago. Later in this course you will have the opportunity to hear other perspectives and read books by authors who might disagree with these authors.
Notes from Jim:
Yergin and Stanislaw (the primary authors of Commanding Heights) have a definite ideological bias. They are unabashed free-market fundamentalists and they tell a historical story to support their viewpoint. The facts they relate and the history they relate are true. But, the art of persuasion when telling history lies in what is not said and what is left out of the story. As one example, after viewing Episode One, you may likely think that the years 1945 to the mid-1970’s were years of slow economic growth as governments attempted to regulate markets and implement Keynesian ideas. This is inaccurate. In fact, (as Angus Maddison points out in your book on page 9) these years had such strong, stable growth that economic historians refer to them as the “Golden Age”.
The authors also attempt to divide economists into two camps: free marketers (Hayek & Friedman) and socialists/Keynesians. The free marketers were/are definitely a distinct group with a distinct ideological bias. But Yergin and Stanislaw attempt to label John Maynard Keynes (and Keynesian economics) as being pro-socialist. That is misleading. Neither Keynes nor his policy recommendations were “socialist”. Indeed, there were/are distinct groups of economists that are rightly called socialists. And these socialists disagreed with Keynes as much as the free-marketers did. Keynes in fact advocated a role for government in regulating excesses of markets, setting the “rules of the game”, and in managing certain macro-economic variables (such as the money supply). But Keynes was not a socialist.
Thinking Ahead: Research for Your Research Project
While viewing the videos and navigating the PBS website, you might also want to check out this page on the site: www.pbs.org/wgbh/commandingheights/lo/resources/. At this page there are many additional resources related to the videos: complete interviews, outtake footage, supplemental stories, printed versions of the interviews, and links to data sources. These will make excellent resources for your essay research later in the term.
Options for Viewing the Videos
The PBS Website
PBS has created a website at www.pbs.org/wgbh/commandingheights/ where the entire series can be viewed as well as background information and many extra materials. The direct link to the videos is here, where you can click to view Episode One (two hours in total) online. Please note that this PBS video series can be viewed online. The series was originally 3 2-hour shows (6 hours total). Each 2 hour show is assigned for each of Units 2, 3, and 4 in this course. At the PBS site, the original 2-hour shows are called “Episodes 1-3” and each has been divided into “chapters” of approx 5-10 minutes each. Links are available to view each chapter in your choice of Windows Media, Quicktime 5, or RealPlayer versions. Each also has a “broadband” and “low-bandwidth (dial-up)” version. These videos are totally free to watch but they open in a small window, much like YouTube.
Youtube (shows with intermittent ads – click to skip ads)
Part I: Battle of Ideas
Part II: Agony of Reform
Part III: New Rules of The Game
Renting or Buying the Video Series
The Commanding Heights video series is also available in VHS, DVD, or as a rentable download. It can be rented or purchased online from Netflix. It may also be purchased from Amazon. Prices for purchase run from $20-35, depending upon new vs. used. I have not checked out the rental pricing. Note: Be sure you are getting all 3 DVD’s in the series (the box set) and not just the first disc.
A Book Version or the Online Transcript
If you are an avid reader and would prefer to read the book instead of watch the videos, that is a viable alternative. There is a book version that contains the same content as the DVD’s. It is available in paperback, either new or used, or Kindle reader version from Amazon for approximately $5-12 or from Gibson’s, the LCC bookstore.
You could also read the transcript of the movie. It is available online at the PBS site, also. It is useful if you want to refer to some specific part or to quote the movie, but I don’t recommend just reading the transcript and not watching the movie.
Another option you could check out is whether a local library has the DVD’s. Finally, if you don’t want to watch the free versions in the little window on your computer, you might consider contacting another student in the class, renting/buying the DVD together, and then watching it together.