In addition to the last installment of the Commanding Heights series, there are four other, short videos you need to watch. They range in length from 5 to 20 minutes each. In some cases I have been able to embed the video here on this page and in others you need to click a link to open it in another window/tab.
Video #1. The Commanding Heights – Episode 3
What To Watch
You’ve already watched Episode 1 and 2. Now I want you to watch the conclusion, Episode 3: The New Rules of the Game. It is two hours long and contains 23 chapters.
What It Is About
From the PBS Commanding Heights website:
With communism discredited, more and more nations harness their fortunes to the global free-market. China, Southeast Asia, India, Eastern Europe, and Latin America all compete to attract the developed world’s investment capital, and tariff barriers fall. In the United States Republican and Democratic administrations both embrace unfettered globalization over the objections of organized labor.
But as new technology and ideas drive profound economic change, unforeseen events unfold. A Mexican economic meltdown sends the Clinton administration scrambling. Internet-linked financial markets, unrestricted capital flows, and floating currencies drive levels of speculative investment that dwarf trade in actual goods and services. Fueled by electronic capital and a global workforce ready to adapt, entrepreneurs create multinational corporations with valuations greater than entire national economies.
When huge pension funds go hunting higher returns in emerging markets, enterprise flourishes where poverty once ruled, but risk grows, too. In Thailand the huge reservoir of available capital proves first a blessing, then a curse. Soon all Asia is engulfed in an economic crisis, and financial contagion spreads throughout the world, until Wall Street itself is threatened. A single global market is now the central economic reality. As the force of its effects is felt, popular unease grows. Is the system just too complex to be controlled, or is it an insiders’ game played at outsiders’ expense? New centers of opposition to globalization form and the debate turns violent over who will rewrite the rules.
Yet prosperity continues to spread with the expansion of trade, even as the gulf widens further between rich and poor. Imbalances too dangerous for the system to ignore now drive its stakeholders to devise new means to include the dispossessed lest, once again, terrorism and war destroy the stability of a deeply interconnected world.
Where to Watch: 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 Assignments 4, 5, and 6. 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.
Notes and Comments from Jim about Episode 2 of Commanding Heights
These are some of the comments and observations I’ve made as I watched this video.
- An important but unmentioned aspect of many of the political events described in the movie was U.S. covert involvement. For example, a significant aspect of the Chile situation in the 1970’s was the U.S. CIA involvement in promoting and supporting the coup that put General Pinochet into power and that toppled the popularly elected President Allende. This was repeated in Argentina and other nations. In other cases, the International Monetary Fund and World Bank, which are largely directed and controlled by the U.S., forced radical economic system changes onto countries needing assistance.
- IMPORTANT QUESTION: Milton Friedman maintained vigorously for most of his life that a free, market-based economy MUST NECESSARILY lead to a free political system. He maintained that political repression was incompatible with a free market. But is it? Does the case of Chile allowing free markets and then ten years later allowing political freedom make Friedman’s argument?What about other countries that have historically NOT been that free politically. For example, for decades South Korea, Singapore, and Taiwan had what appeared to be “elected” governments, yet there was actually brutal political repression. In some cases such as Taiwan during the decades when it grew fastest, there weren’t really elections. In Singapore, political censorship is common. Yet all three of these countries have had very free markets and experienced rapid growth? So what do you think? Is Friedman right? or not?
- SHORT-TERM COSTS vs. LONG-TERM BENEFITS. When is the long-term benefit of faster growth and more development worth the short-term costs and pain of adjustment? When is it not worth it? For example, Chile experienced 3-10 years of agonizing economic reform, dislocation, unemployment, pain and political repression. Yet after more than decade, Chile became the economic superstar of South America. It’s now one of the leading economies in South AMerica (faint praise). Was it worth it?
- I note that the president (?) of Bolivia described his country’s crisis in the 1980’s as being “initiated by reckless lending by big banks that had too much money to lend – so they lent it unwisely”. WOW. We could pretty much say the same thing about the current global credit crunch/recession and the current US crisis. Perhaps this says something about the need for close regulation of the banking industry.
- Note the interviews in this third Part of the video series. In particular, interviews with Robert Rubin and Larry Summers. Rubin was not only the Treasury Sec for Clinton, but he has also been Special Advisor/CHairman of Citigroup in recent years. He is also the mentor of the current Obama Treasury secretary, Tim Geithner and Larry Summers. Summers is now President Obama’s chief economic advisor.
- Former Vice-President Dick Cheney claims that very few people have been harmed by globalization. Do you agree? Is this true? It seems open to debate to me. For example, the population of The Ukraine has declined more in the 1990’s (both #’s and %) than it did when Stalin starved the nation in 1930’s as part of his collectivization of agriculture and purge of opponents. Are the people who suffer through the various financial crises and austerity programs imposed by the IMF truly benefitting?
- One of my major concerns with the Video Series COMMANDING HEIGHTS is the way the movie assumes that increasing volume of world trade is necessarily a sign offree markets. A closer examination of much of the growth of world trade in the last few decades casts doubt on that. When we say “free trade” and “free market”, we typically mean buyers and sellers who are independent of each other and free to make decisions that are solely in their own self-interest. They agree to a trade only if the price benefits them. Yet today, fully 1/3 of the volume of world trade is in fact “trade” between two units of the same multi-national corporation. For example, Ford of Canada builds an engine. It gets shipped to Ford of U.S. to be installed in a car to be sold in U.S. This counts as “free trade” and a “free market” according to the authors of Commanding Heights. Yet Ford of Canada is not free to sell the engine to anyone else. Ford of Canada is owned by the same multi-national Corp. that owns Ford of U.S. The parent corporation determines the price to be paid (and by determining the price, it decides by itself how the money from the sale of the car will be split between US workers, Canadian workers, or corporate shareholders. There’s no competition, no “market” as we normally think of a market. There’s no freedom on the part of the buyer or seller of the engine. It strikes me that this is NOT a free market and NOT free trade. Much of what we experience in today’s world is in fact, private central planning, not a free market.
- The video discusses how NAFTA helped Mexico boom, particularly in northern Mexico. This was true at first. However in recent years, Mexico has come under intense cheap competition from China. Most of the boom in northern Mexico is over. It has been partly replaced with drugs trafficking, resulting in a major breakdown in social safety. The movie mentions that the U.S. on net, gained jobs from “free trade agreements” such as NAFTA. This was true in the 1990’s. The trend reversed since 2001, the time the movie was prepared. Since 2001, the U.S. has experienced a huge loss of manufacturing jobs with the only offsets being increased employment in financial services (mortgages), which collapsed in 2008.
- The movie tries to attribute all of the 1990’s Japanese crisis to ” a government managed domestic sector”. The movie leaves out the failure of the Japanese banks in 1990-91 due to the collapse of a real-estate bubble. The banks were propped up by the central bank (like the U.S. did in Oct. 2008) and they became zombie banks. This was the real problem preventing growth.
- As the movie says, the U.S. often “encouraged” countries to “open” their economies. However, trade negotiations with the U.S are rarely held on a level field. The U.S. usually pressures countries to “open”their economies, but the U.S. rarely opens our market. In addition, the U.S. usually pressures the other country to recognize and protect our monopolies, patents, and copyrights.
- The movie asserts that “people have become more mobile”. It uses the example of a “poor Chinese immigrant with no money” who came to the U.S. and creates a great company. I would argue with that. Certainly it was possible to enter the U.S. 60 years ago as a refugee of a nation lost to communism. Poor people cannot easily immigrate to the U.S. (or Canada, or Europe or New Zealand, or Japan) these days. [I’ve checked for a family member who wishes to migrate]. Typically developed countries these days will only accept either very well-educated immigrants, refugees from nations they have invaded (ex: Iraqi’s & Somali’s to the U.S), or wealthy people. Poor people migration is a phenomenon from another century, not today. Even in other countries that accept poor immigration as a supply of labor (Dubai, Singapore, etc), the immigration is temporary. Lose your job and you’ll be booted from the country.
- The segments on Long-Term Capital Management and the Asian financial crisis were painful to watch. We learned nothing. Instead of maintaining & improving regulation of banks, we (in the U.S) deregulated Wall St after the 1998 crisis. Result: today’s credit crunch and financial crisis.
- Postscript: The Doha round of negotiations of the WTO that were supposed to meet the demands of poor countries to have places to sell their products failed. The Doha round is dead — no agreement.
Video #2: Paul Collier on the “bottom billion”
What It Is About
Paul Collier, author of the book “The Bottom Billion” and a renowned development economist discusses the “resource trap” that some extremely impoverished nations experience. This is the phenomenon where a nation has significant amounts of exportable natural resources (such as oil or diamonds), yet is unable to ever translate those export riches into sustained industrial development and wealth for their people
Wikipedia summarizes Collier’s thesis in the book as:
The book suggests that, whereas the majority of the 5-billion people in the “developing world” are getting richer at an unprecedented rate, a group of countries (mostly in Africa and Central Asia but with a smattering elsewhere) are stuck and that development assistance should be focused heavily on them. These countries typically suffer from one or more development traps:
- The Conflict Trap – civil wars (with an estimated average cost of $64bn each) or coups.
- The Natural Resource Trap – having to rely on natural resources which can stifle other economic activity and lead to bad governance and coups/conflict.
- Landlocked with Bad Neighbours – poor landlocked countries with poor neighbours find it almost impossible to tap into world economic growth.
- Bad Governance in a Small Country – terrible governance and policies can destroy an economy with alarming speed.
He suggests a number of relatively inexpensive but institutionally difficult changes:
- Aid agencies should increasingly be concentrated in the most difficult environments, accept more risk. Ordinary citizens should not support poorly informed vociferous lobbies whose efforts are counterproductive and severely constrain what the Aid agencies can do.>
- Appropriate Military Interventions (such as the British in Sierra Leone) should be encouraged, especially to guarantee democratic governments against coups.
- International Charters are needed to encourage good governance and provide prototypes.
- Trade Policy needs to encourage free-trade and give preferential access to Bottom Billion exports. At present “Rich-country protectionism masquerades in alliance with anti-globalization romantics and third world crooks”.
In this video, Collier discusses the Natural Resource Trap.
Where to Watch
If the following embedded video doesn’t work, won’t display, or won’t expand to full-screen, then open the following link in a new window/tab (16 minutes): http://www.ted.com/talks/paul_collier_shares_4_ways_to_help_the_bottom_billion.html
Video #3 & #4: Riz Khan – The fate of the world’s poorest – Parts 1 and 2
What It Is About
Riz Khan, a TV talk show host, interviews three development economists with differing points of view on what is effective and what is needed to help the world’s poorest nations (primarily African) develop: Paul Collier, Dambiso Moyo, and Jeff Sachs.
There are two segments.
You should be familiar with Collier from the previous video. Collier is an advocate of active intervention by the first world, but believes the intervention should vary by country and involves more than aid. Dambiso Moyo believes “aid” has failed and that “trade” will work instead. She is an advocate of opening the currently protected first world markets to trade from third world nations. Also interviewed is Jeff Sachs (which you have seen in Commanding Heights). Sachs is the leading advocate of massive international aid under the auspices of the United Nations.
They reference things called “MDG”, or “Millenium Development Goals”, a massive UN-led international program attempting to lift the poorest of the poor out of poverty before 2025. See for more information: http://www.unmillenniumproject.org/goals/index.htm
Where to Watch
If the following embedded video doesn’t work, won’t display, or won’t expand to full-screen, then open the following links in a new window/tab:
Part 1 on YouTube (12 minutes): http://www.youtube.com/watch?v=kZa9LkX-QdQ
Part 2 on YouTube (11 minutes); http://www.youtube.com/watch?v=8aE_iJq4prs&feature=relmfu
Video #5: Martin Khor: Structural Adjustment Explained
What It Is About
Martin Khor, a former economist and university lecturer, is also an advisor and consultant to a number of United Nations agencies and other important international bodies. Dr Khor is author of several books on WTO reform, international trade and the global economy. In this short (5minute) segment Dr. Khor describes some of the ways that “structural adjustment” programs have actually hurt poor and developing nations.
Structural Adjustment programs, the set of radical free-market, privatization, and free-trade reforms that have been forced onto poor and developing nations, are very unpopular in those nations. Typically, nations undergoing “structural adjustment” have experienced a period of shrinkage of their economies, extreme turmoil, and often political repression. Dr. Khor explains that the un-balanced nature of the reforms often means the nation becomes poorer, or “de-industrializes” what modest amounts of industry it does have. This is due to the subject nation having to eliminate all tarriffs and subsidides, both import and export, while their competitors, the large first world nations continue to protect their markets with either import tarriffs, quotas, or agricultural subsidies.
Where to Watch
If the embedded video won’t play, then click here: Video: Martin Khor: Structural Adjustment Explained, posted by Global Issues, July 08, 2007
Martin Khor, Structural Adjustment Explained, July 15, 2005