Commanding Heights

     The movie “Commanding Heights” explores the battle for the control of the world. Based on the book by Daniel Yergin and Joseph Stanislaw, “Commanding Heights” describes the clash of thoughts that came up after the World War I. It brings out the struggle of control of such infrastructure such as the control of steel mills, railroads and other “commanding heights”. The question that the writer seems to pose is,”Who is in control of the economy: the market or the government”?

     The twentieth century was a period of expanding government; Communism and socialism dominated the Soviet Union, China and Eastern Europe while various stages of the welfare state were the rule in much of the rest of the world. Towards the millennium it became clear that centralized economies were failing. Great Britain, home of the Industrial Revolution, was steadily experiencing economic decline with its gross domestic product approaching that of a third world country.

     The Soviet Union and Eastern Europe were bankrupt and collapsing. But change was afoot. Margaret Thatcher, who as a college student had come across and read a copy of F.A. Hayek’s The Road to Serfdom (published in the 1930s). When she became Prime Minister of Great Britain she began reducing the government’s role in the economy and allowing market forces to re-emerge.

     In Asia Deng Xiaoping and his team of reformers began relaxing the Communist Party’s grip on the Chinese economy. India, Western Europe, Latin America, Eastern Europe all began to move away from statist state control and toward market based economies and, as they did so, economies started growing and living standards began rising. The continuation of the episode continued by  exploring “The Agony of Reform” in the Eastern bloc and  at some point with a look at “The New Rules of the Game” in the world’s current trends of globalization.

     The following scene shows the world’s transition for decades toward more government control before swaying the other way. Two economists: John Maynard Keynes, the Englishman who advocated intervention to control booms and busts, and Friedrich von Hayek, the Austrian émigré who argued that big government stifled innovation. This first episode does a good job in delineating the differences between Hayek and Keynesian philosophies. Nonetheless the narration makes its clear that at the end of the day Hayek’s theories are finally coming out clearly and they do not give any explanation as to why this is so. They say his theories are that the government should reduce taxation/spending but after they do not tell us why they have gained ascendancy.

     In the 1970s, economic crises prompted Western politicians to rediscover Hayek. In the ’80s, the simultaneous rise of President Ronald Reagan and Britain’s Margaret Thatcher set the stage for a worldwide capitalist revolution. There were several variations in the points of view of developing and industrialized nations on the current reality of free trade and how it affected them.

     The next episode shows the fall of the Berlin Wall which heralded an era of reform around the world–in Russia and the Eastern bloc; in democracies like India, where a red-tape “permit raj” had replaced Britain’s Raj after independence; and in Latin America, which had developed its own brand of bureaucracy. New liberties brought new problems: In a leaner Poland, reform hurt workers whose struggle led to freedom, while in Russia; gangster capitalism ruled the East with a heavy hand of its own.

     The third segment shows how the global economy has been transformed by online financial markets, transnational mergers and currency speculation that dwarfs trade in goods and services. With the story of a Thai entrepreneur who built a luxury condo complex in 1997, only to see it repossessed as the Asian currency crisis fueled by international hedge fund managers turned his customers into paupers, “Commanding Heights” puts a human face on the buzzword of globalization.

     It is important to note that the movie reveals economics issues with an emphasis on the quality and quantity of wealth generated rather than externalities like the environment. Taken this way the movie performs well because it will make the viewers a little more enlightened in global economics.

     There is one thing that the movie seems to miss out. It does not explore what happened in Bolivia and other counties especially Latin America after globalization. This is partly because many of these scenarios took place after the after the series were aired. The second thing that I feel concerned about is the fact that it did not cover the moderate path to globalization that took place in France and Ukraine as well as in South Korea. This possibly is because there was no time for this. Overall who ever watches this movie will not go without having learned something new especially about the global economy.

References

Yirgin David (2002) Commanding Heights: the Battle for the World Economy USA : Simon ; Schuster

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