Commanding Heights
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''The Commanding Heights: The Battle for the World Economy'' is a book by
Daniel Yergin Daniel Howard Yergin (born February 6, 1947) is an American author, speaker, energy expert, and economic historian. Yergin is vice chairman of S&P Global. He was formerly vice chairman of IHS Markit, which merged with S&P in 2022. He founded Ca ...
and
Joseph Stanislaw Joseph Stanislaw is a financial adviser on international markets and politics. He is also the co-founder and former president of Cambridge Energy Research Associates, an energy research consultancy that was acquired in 2004 by IHS Energy. Stanis ...
first published as ''The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World'' in 1998. In 2002, it was adapted as a documentary of the same title and later released on
DVD The DVD (common abbreviation for Digital Video Disc or Digital Versatile Disc) is a digital optical disc data storage format. It was invented and developed in 1995 and first released on November 1, 1996, in Japan. The medium can store any kin ...
. ''The Commanding Heights'' attempts to trace the rise of
free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...
s during the last century as well as the process of
globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
. Yergin attributes the origin of the phrase commanding heights to a speech by
Vladimir Lenin Vladimir Ilyich Ulyanov. ( 1870 – 21 January 1924), better known as Vladimir Lenin,. was a Russian revolutionary, politician, and political theorist. He served as the first and founding head of government of Soviet Russia from 1917 to 19 ...
referring to the control of perceived key segments of a national economy.


Overview

The authors take the thesis that prior to
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
, the world effectively lived in a state of
globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
, which they term the First Era of Globalization. The authors define globalization as periods in which
free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...
s predominate and countries place few, if any, limits on
export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
s,
immigration Immigration is the international movement of people to a destination country of which they are not natives or where they do not possess citizenship in order to settle as permanent residents or naturalized citizens. Commuters, tourists, and ...
,
import An import is the receiving country in an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited ...
s, or
information exchange Information exchange or information sharing means that people or other entities pass information from one to another. This could be done electronically or through certain systems. These are terms that can either refer to bidirectional ''informa ...
s. Overall, they see globalization as a positive movement that improves the
standard of living Standard of living is the level of income, comforts and services available, generally applied to a society or location, rather than to an individual. Standard of living is relevant because it is considered to contribute to an individual's quality ...
for all the people connected to it, from the richest to the poorest. According to the authors, the rise of
communism Communism (from Latin la, communis, lit=common, universal, label=none) is a far-left sociopolitical, philosophical, and economic ideology and current within the socialist movement whose goal is the establishment of a communist society, a s ...
and
fascism Fascism is a far-right, authoritarian, ultra-nationalist political ideology and movement,: "extreme militaristic nationalism, contempt for electoral democracy and political and cultural liberalism, a belief in natural social hierarchy an ...
, not to mention the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
, nearly extinguished
capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for Profit (economics), profit. Central characteristics of capitalism include capital accumulation, competitive markets, pric ...
, which rapidly lost popularity. After
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, the authors note that the work of economist
John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...
came to be widely accepted in Western economies. Keynes believed in government regulation of the economy, which the authors underline as Keynes' great influence and prestige. The authors consider that the so-called commanding heights were often owned or severely regulated by governments in accordance with Keynes' ideas. The authors then discuss how the political changes of the 1980s ushered in accompanying changes in economic policy. The old trend changed when
Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of the Conservative Party from 1975 to 1990. S ...
became
Prime Minister of the United Kingdom The prime minister of the United Kingdom is the head of government of the United Kingdom. The prime minister advises the sovereign on the exercise of much of the royal prerogative, chairs the Cabinet and selects its ministers. As modern pr ...
and when
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
was elected
President of the United States The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United Stat ...
. Both leaders parted ways with
Keynesian economics Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output an ...
and governed more in the tradition of the works of
Friedrich Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...
, who opposed
government regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. For ...
,
tariffs A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...
, and other infringements on a pure free market and those of
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
, who emphasized the futility of using
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
ary
monetary policies Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
to influence rates of
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
. In practice, Hayek's policies were applied only selectively, as Reagan's 1986 income tax reforms substantially increased
taxes A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or ...
on the lowest quintile of wage-earners but dramatically decreased rates for the upper two quintiles. In contrast to Hayek's ideas, Reagan's policies also continued and expanded tax
write-off A write-off is a reduction of the recognized value of something. In accounting, this is a recognition of the reduced or zero value of an asset. In income tax statements, this is a reduction of taxable income, as a recognition of certain expenses ...
s, rebates and
subsidies A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the ter ...
for many large corporations. Friedman's monetarism was also abandoned in practice as government-issued debt as a percentage of GDP rose dramatically throughout the 1980s. While Thatcher, Reagan, and their successors made sweeping reforms, the authors argue that the current era of globalization finally began around 1991, with the
collapse of the Soviet Union The dissolution of the Soviet Union, also negatively connoted as rus, Разва́л Сове́тского Сою́за, r=Razvál Sovétskogo Soyúza, ''Ruining of the Soviet Union''. was the process of internal disintegration within the Sov ...
. Since then, they assert countries embracing free markets have prospered on the whole, and those adhering to
central planning A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, part ...
have failed. While strongly in favor of this trend, the authors worry that globalization will not last. More specifically, they believe that if
inequality Inequality may refer to: Economics * Attention inequality, unequal distribution of attention across users, groups of people, issues in etc. in attention economy * Economic inequality, difference in economic well-being between population groups * ...
in economic growth remains high and if
Third World The term "Third World" arose during the Cold War to define countries that remained non-aligned with either NATO or the Warsaw Pact. The United States, Canada, Japan, South Korea, Western European nations and their allies represented the " First ...
nations are not offered the proper opportunities and incentives to support capitalism, the movement will end just as the first era did. The authors place so much emphasis on narrowing economic gaps because they believe, contrary to many of the people who are interviewed, that there is no
ideological An ideology is a set of beliefs or philosophies attributed to a person or group of persons, especially those held for reasons that are not purely epistemic, in which "practical elements are as prominent as theoretical ones." Formerly applied prim ...
support for capitalism, only the
pragmatic Pragmatism is a philosophical movement. Pragmatism or pragmatic may also refer to: *Pragmaticism, Charles Sanders Peirce's post-1905 branch of philosophy *Pragmatics, a subfield of linguistics and semiotics *''Pragmatics'', an academic journal in ...
fact that the system works better than any other, as they remark:


International analysis

In the book, the authors examine briefly many different nations and regions and their economic development since World War II. (In the case of
industrialized countries A developed country (or industrialized country, high-income country, more economically developed country (MEDC), advanced country) is a sovereign state that has a high quality of life, developed economy and advanced technological infrastruct ...
, they often begin before the war.) Admitting that the book cannot touch on every single aspect (Yergin remarks that the topic of their book constitutes an entire new academic discipline), the authors make many assertions.


United States

The robber barons were often condemned in the press, but the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
had much more commitment to
industrialization Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
and
free markets In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
than did other countries in the late 19th and the early 20th centuries. Unlike many countries after World War I, the 1920s saw great economic expansion for upper-income individuals and a growth in median income. However,
labor unrest A labour revolt or worker's uprising is a period of civil unrest characterised by strong labour militancy and strike activity. The history of labour revolts often provides the historical basis for many advocates of Marxism, communism, socialism and ...
continued to mount throughout the 1920s and the 1930s because of the lack of wage and hour rules,
child labor Child labour refers to the exploitation of children through any form of work that deprives children of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially and morally harmful. Such e ...
protections,
unemployment insurance Unemployment benefits, also called unemployment insurance, unemployment payment, unemployment compensation, or simply unemployment, are payments made by authorized bodies to unemployed people. In the United States, benefits are funded by a comp ...
,
right to organize Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline membe ...
, workplace safety requirements, and
social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
, which all continued to exacerbate the discontents of the substantial numbers of
working poor The working poor are working people whose incomes fall below a given poverty line due to low-income jobs and low familial household income. These are people who spend at least 27 weeks in a year working or looking for employment, but remain und ...
. The
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
caused massive
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
and massive public distrust of corporations and wealthy individuals. In response, the
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Cons ...
of President
Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...
went into effect with massive public support. Many lawyers and economists, influenced by Keynes, worked under the New Deal and believed that free markets would lead to disaster without proper regulation. The
American economy The United States is a highly developed mixed-market economy and has the world's largest nominal GDP and net wealth. It has the second-largest by purchasing power parity (PPP) behind China. It has the world's seventh-highest per capita GDP ...
boomed for about 30 years after World War II with the benefit of
Keynesianism Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output and ...
, robust antitrust regulation to promote competition and
financial regulation Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled ...
s preventing the most volatile forms of
market speculation In finance, speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable shortly. (It can also refer to short sales in which the speculator hopes for a decline in value.) Many s ...
, high unionization rates and protections promoting the growth of domestic industry. However, during the 1970s,
stagflation In economics, stagflation or recession-inflation is a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since action ...
was brought on by the
1973 oil crisis The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had supp ...
and the shift from the
gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the la ...
to
fiat currency Fiat money (from la, fiat, "let it be done") is a type of currency that is not backed by any commodity such as gold or silver. It is typically designated by the issuing government to be legal tender. Throughout history, fiat money was sometime ...
, which discredited the policy consensus that was set in place by the New Deal Coalition. Eventually,
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
was elected as president in 1980, and many of the statutes and organizations created by the New Deal were dismantled.


United Kingdom

London London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
was the center of the so-called First Era of Globalization because of the power and resources of the
British Empire The British Empire was composed of the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts esta ...
. However, World War I severely weakened Britain, causing massive unemployment. The
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
successfully held out during World War II and emerged victorious, but the war effectively caused the dismantling of its empire.
Winston Churchill Sir Winston Leonard Spencer Churchill (30 November 187424 January 1965) was a British statesman, soldier, and writer who served as Prime Minister of the United Kingdom twice, from 1940 to 1945 Winston Churchill in the Second World War, dur ...
was influenced by the work of Hayek and opposed heavy government interference in the
British economy The economy of the United Kingdom is a highly developed social market and market-orientated economy. It is the sixth-largest national economy in the world measured by nominal gross domestic product (GDP), ninth-largest by purchasing power pa ...
. However, the Labour Party, led by
Clement Attlee Clement Richard Attlee, 1st Earl Attlee, (3 January 18838 October 1967) was a British politician who served as Prime Minister of the United Kingdom from 1945 to 1951 and Leader of the Labour Party from 1935 to 1955. He was Deputy Prime Mini ...
, came to power in force after the
1945 general election The following elections occurred in the year 1945. Africa * 1945 South-West African legislative election Asia * 1945 Indian general election Australia * 1945 Fremantle by-election Europe * 1945 Albanian parliamentary election * 1945 Bulgaria ...
and was dedicated to government controls to prevent another
economic crisis An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the p ...
. The United Kingdom's major industries were nationalized over the following decades (including the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...
, electricity, water,
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
,
railways Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a pre ...
, mining, bus transport,
telecommunications Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than that fe ...
, along with large portions of the oil, shipbuilding, aerospace, automotive, and steel industries. Basic human services such as
healthcare Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
and university education were brought under government control and made available for free, while rents in the private housing market were regulated and
council housing Public housing in the United Kingdom, also known as council estates, council housing, or social housing, provided the majority of rented accommodation until 2011 when the number of households in private rental housing surpassed the number in so ...
provided homes for around a third of the population by the late 1970s. Meanwhile, practically all occupations and wages were heavily
regulated Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. Fo ...
and
unionized A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...
. The practices became so prevalent that even
Conservative Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization i ...
governments elected after the initial wave of nationalisations in the late 1940s kept them. However, during the 1970s, massive strikes by unions (see the
Three-Day Week The Three-Day Week was one of several measures introduced in the United Kingdom in 1973–1974 by Edward Heath's Conservative government to conserve electricity, the generation of which was severely restricted owing to industrial action by coal ...
and
Winter of Discontent The Winter of Discontent was the period between November 1978 and February 1979 in the United Kingdom characterised by widespread strikes by private, and later public, sector trade unions demanding pay rises greater than the limits Prime Minis ...
) and other economic woes, such as the
1973 oil crisis The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had supp ...
, almost ground the British economy to a halt. Thatcher, an ardent admirer of Hayek, began privatizatizing industries. While her results were initially mixed, the
Falklands War The Falklands War ( es, link=no, Guerra de las Malvinas) was a ten-week undeclared war between Argentina and the United Kingdom in 1982 over two British dependent territories in the South Atlantic: the Falkland Islands and its territorial de ...
brought on a nationalistic fervor that kept Thatcher in office long enough to keep her reforms in place. Even when the Labour Party later came back to power, it did not attempt to challenge the key principles of
Thatcherism Thatcherism is a form of British conservative ideology named after Conservative Party leader Margaret Thatcher that relates to not just her political platform and particular policies but also her personal character and general style of manag ...
.


Soviet Union and Russia

Within a few years of the rise of the
Russian Revolution The Russian Revolution was a period of Political revolution (Trotskyism), political and social revolution that took place in the former Russian Empire which began during the First World War. This period saw Russia abolish its monarchy and ad ...
, the
Soviet economy The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and Industrial engineering, industrial manufacturing. An administrative-command system managed a Soviet-type economic planning, distinc ...
went into a major crisis. Lenin responded with the
New Economic Policy The New Economic Policy (NEP) () was an economic policy of the Soviet Union proposed by Vladimir Lenin in 1921 as a temporary expedient. Lenin characterized the NEP in 1922 as an economic system that would include "a free market and capitalism, ...
, a program that allowed limited capitalistic activity, which resulted in what he would call
state capitalism State capitalism is an economic system in which the state undertakes business and commercial (i.e. for-profit) economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital a ...
, and the economy began to improve. Lenin's commanding heights speech was his attempt to defend himself against accusations that he sold out the principles of the revolution by implementing the new policy. Under
Joseph Stalin Joseph Vissarionovich Stalin (born Ioseb Besarionis dze Jughashvili; – 5 March 1953) was a Georgian revolutionary and Soviet political leader who led the Soviet Union from 1924 until his death in 1953. He held power as General Secreta ...
, the Soviet agricultural and heavy manufacturing sectors were largely centralized. During the 1940s to the 1970s, the Soviet economy grew at a rate that outpaced that of Western European nations. By the 1980s, however, the Soviet economy was in shambles. Because of a lack of incentives and, ironically, a more tolerant central government, workers did not put much effort into their duties. Nonetheless, the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
continued to build the
military A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare. It is typically authorized and maintained by a sovereign state, with its members identifiable by their distinct ...
even though at times such spending took up half the country's revenue.
Mikhail Gorbachev Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet politician who served as the 8th and final leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...
tried to reform the economy, but he took only limited steps (see
perestroika ''Perestroika'' (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated wit ...
and
glasnost ''Glasnost'' (; russian: link=no, гласность, ) has several general and specific meanings – a policy of maximum openness in the activities of state institutions and freedom of information, the inadmissibility of hushing up problems, ...
). When he lifted the
Brezhnev Doctrine The Brezhnev Doctrine was a Soviet foreign policy that proclaimed any threat to socialist rule in any state of the Soviet Bloc in Central and Eastern Europe was a threat to them all, and therefore justified the intervention of fellow socialist sta ...
and allowed
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populous ...
's
Solidarity ''Solidarity'' is an awareness of shared interests, objectives, standards, and sympathies creating a psychological sense of unity of groups or classes. It is based on class collaboration.''Merriam Webster'', http://www.merriam-webster.com/dictio ...
to usurp that country's communist regime, the entire
Warsaw Pact The Warsaw Pact (WP) or Treaty of Warsaw, formally the Treaty of Friendship, Cooperation and Mutual Assistance, was a collective defense treaty signed in Warsaw, Poland, between the Soviet Union and seven other Eastern Bloc socialist republic ...
collapsed, soon followed by the Soviet Union itself. However, even with the fall of the Soviet Union and the rise of the relatively free market-minded
Boris Yeltsin Boris Nikolayevich Yeltsin ( rus, Борис Николаевич Ельцин, p=bɐˈrʲis nʲɪkɐˈla(j)ɪvʲɪtɕ ˈjelʲtsɨn, a=Ru-Boris Nikolayevich Yeltsin.ogg; 1 February 1931 – 23 April 2007) was a Soviet and Russian politician wh ...
, former members of the
Communist Party of the Soviet Union "Hymn of the Bolshevik Party" , headquarters = 4 Staraya Square, Moscow , general_secretary = Vladimir Lenin (first) Mikhail Gorbachev (last) , founded = , banned = , founder = Vladimir Lenin , newspaper ...
maintained much power in Russia, blocked free-market movements, and forced the resignation of Yeltsin's free-market allies such as
Yegor Gaidar Yegor Timurovich Gaidar (russian: link=no, Его́р Тиму́рович Гайда́р; ; 19 March 1956 – 16 December 2009) was a Soviet and Russian economist, politician, and author, and was the Acting Prime Minister of Russia from 15 Jun ...
. During the 1996 presidential election, Yeltsin was forced to accept support from
Russian oligarchs Russian oligarchs (Russian: олигархи, romanized: ''oligarkhi'') are business oligarchs of the former Soviet republics who rapidly accumulated wealth in the 1990s via the Russian privatisation that followed the dissolution of the Soviet ...
to counter the growing power of the
Communist Party of the Russian Federation , anthem = , seats1_title = Seats in the State Duma , seats1 = , seats2_title = Seats in the Federation Council , seats2 = , seats3_title = Governors , seats3 = , seats4_title ...
. While Yeltsin remained in power, the privatization of industries proceeded extremely unequally.


Germany

As had been predicted by Keynes, the
hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...
caused by the
Treaty of Versailles The Treaty of Versailles (french: Traité de Versailles; german: Versailler Vertrag, ) was the most important of the peace treaties of World War I. It ended the state of war between Germany and the Allied Powers. It was signed on 28 June ...
devastated the
German economy The economy of Germany is a Developed country, highly developed social market economy. It has the largest national economy in Europe, the List of countries by GDP (nominal), fourth-largest by nominal GDP in the world, and List of countries by ...
and created political instability. In addition to widespread unemployment, the hyperinflation effectively wiped out the country's
middle class The middle class refers to a class of people in the middle of a social hierarchy, often defined by occupation, income, education, or social status. The term has historically been associated with modernity, capitalism and political debate. Commo ...
. That environment made it easy for the
Nazi Party The Nazi Party, officially the National Socialist German Workers' Party (german: Nationalsozialistische Deutsche Arbeiterpartei or NSDAP), was a far-right politics, far-right political party in Germany active between 1920 and 1945 that crea ...
to gain power. The authors also argue that the Nazis practiced central planning although industries were privatized en masse. After the war and the
division of Germany Division or divider may refer to: Mathematics * Division (mathematics), the inverse of multiplication *Division algorithm, a method for computing the result of mathematical division Military * Division (military), a formation typically consistin ...
,
East Germany East Germany, officially the German Democratic Republic (GDR; german: Deutsche Demokratische Republik, , DDR, ), was a country that existed from its creation on 7 October 1949 until its dissolution on 3 October 1990. In these years the state ...
came under the rule of the Soviets, and West Germany remained part of the Western powers. When economic conditions in occupied West Germany failed to improve, Ludwig Erhard completely destroyed price controls in 1948 without consulting the occupying powers. Wirtschaftswunder, Western Germany underwent a fast massive economic recovery, but such free-market reforms were largely confined to that country for many years. By the time of German reunification in 1989, West Germany was an economic power, and East Germany faced many problems because of the collapse of the Economy of East Germany#Central planning, central planning authority.


India

Unlike Mahatma Gandhi, who supported a village-centric economy, after India's Indian Independence Act 1947, independence in 1947, its first prime minister of India, prime minister, Jawaharlal Nehru, promoted industrialization. However, he supported government-controlled economic development, development and the bureaucracy that developed stifled innovation (the authors of ''The Commanding Heights'' sarcastically claim that the British Raj was replaced by a permit Raj). Bribery and delays became common in the Indian economy while many prominent economists studied the country and attempted to finetune its central planning. By the 1990s, the Indian government began to relax these stringent regulations mainly under the influence of Minister of Finance (India), Finance Minister and later Prime Minister Manmohan Singh. The economic liberalisation in India, Indian economy bloomed under the effects of
export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
s and outsourcing, and political parties since then have continued to promote those changes. The free-marketer Singh was appointed prime minister when his party won the 2004 Indian general election, elections in 2004 although he was not the victorious United Progressive Alliance's stated candidate, and the general expectation was that Sonia Gandhi would take the seat.


South America

Under the influence of dependency theory, a Marxist international relations theory, Marxist approach to international economics, many Latin American countries attempted to industrialize by limiting imports of manufactured goods and subsidizing their own industries. However, companies had little incentive to become efficient or innovative in the absence of competition and because of government subsidies. By the 1980s, the economic problems of the countries became obvious, and much of the West's investment was lost. Chile unwittingly became an experiment in free markets when Augusto Pinochet called in followers of Friedman to evaluate the economy, the so-called Chicago boys. The authors argue that the Miracle of Chile, economic reforms proved successful, but since Pinochet was a dictator who 1973 Chilean coup d'état, came to power in a coup and human rights violations in Pinochet's Chile, had many political opponents murdered, the whole idea of free-market reform became linked to
fascism Fascism is a far-right, authoritarian, ultra-nationalist political ideology and movement,: "extreme militaristic nationalism, contempt for electoral democracy and political and cultural liberalism, a belief in natural social hierarchy an ...
. The authors and Friedman claim that the reforms eventually promoted Chilean transition to democracy, democracy, they acknowledge that the issue and their interpretation of events are extremely controversial. Bolivia was hit with hyperinflation as well. During the 1980s, economist Jeffrey Sachs was sent as a consultant and new President of Bolivia, President Gonzalo Sánchez de Lozada reined in
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
in the 1990s by severely cutting government spending. While Bolivia remained a very poor country, the authors argue that it is better off now because its inflation was curtailed. They also argue that Bolivia's example vindicates the bad reputation that free-market economics acquired in Chile as Bolivia's reforms came after a democratic election.


Other countries

The authors argue that Africa's economic development was severely hindered by central planning, socialist ideas, and political dictatorships that promoted warfare and other conflicts. While Japan was seen for many years as an Japanese economic miracle, economic success story as late as the early 1990s, the authors argue that its ongoing recession since then resulted from its governments refusal to stop subsidies to many of its industries and companies (the issue is ongoing). Poland's Balcerowicz Plan, free-market reforms pushed by Solidarity and Lech Wałęsa were initially mixed and criticized by its citizens, but by the late 1990s, the Polish economy was doing much better than other former communist states in the Eastern Bloc. One feature of the Polish economy that makes it different from other capitalistic countries is that it is dominated by small business rather than corporations or conglomerate (company), conglomerates. China is another major ongoing issue. While Deng Xiaoping, after the death of Mao Zedong, Chinese economic reform, gradually freed the economy, he did not promote civil liberties or other political freedoms, as was demonstrated by his willingness to Tiananmen Square protests of 1989, crush pro-democracy demonstrators. While the authors hope according to Friedman's ideas that free markets would eventually promote a free society, it has not yet happened although China's economy continues to grow.


Documentary

In 2002, PBS aired a six-hour documentary based on the book. This documentary was later sold on DVD and is available to view for free at PBS's website.Each of the chapters, ranging from about 1 to 9 minutes, is available in the Quicktime 5 format (extension .mov) and so it is necessary to have a player that supports that format. One can download them manually and then use a playlist to watch an entire episode without needing to switch for each chapter, or alternatively write a small script to automate the downloads. Episode 1 has 19 chapters, Episode 2 has 21 chapters, and Episode 3 has 23 chapters. The general URL is https://www-tc.pbs.org/media/commandingheights/ch_pPP_CC_qt_300.mov where PP is the episode number (01, 02, or 03) and CC (01-23) is the chapter number. It may not be necessary to have a playlist at all if the player automatically moves on to the next file in the directory in lexicographic order. The documentary is narrated by David Ogden Stiers. The documentary series consists of three, two-hour episodes: * Episode 1: The Battle of Ideas Produced and Directed by William Cran. * Episode 2: The Agony of Reform Produced and Directed by William Cran, Co-Producer Peter Sommer (British director), Peter Sommer, Co-Director Greg Barker. * Episode 3: The New Rules of the Game Directed, Written and Produced by Greg Barker. Appearing several years after the book was released allowed the documentary film to address many of the items that Yergin and Stanislaw missed in their original book, including the 1997 Asian financial crisis, collapse of Asian economies, the anti-globalization movement and the September 11 attacks. All told, two of the documentary's six hours (the entire final third) address things that happened since the original book was published. They also include free market solutions to international poverty that were not included in the book, and they interview economist Hernando de Soto (economist), Hernando de Soto, whose book on the subject was not published until after the initial printing of ''The Commanding Heights''. Like the book, the documentary attracted more support and criticism. One example is the anti-globalization movement, which argued they were portrayed unfairly. In the documentary, James Wolfensohn, then President of the World Bank, is interviewed and says that such protesters are attacking people "who are devoting their lives to addressing the very questions that these people claim to be addressing". The documentary includes a scene of Wolfensohn getting hit in the face with a pie by a protester. In contrast to the book, the PBS documentary is more wary of the possible end of the current era of globalization. For example, they include a parallel between radio stocks of the 1920s and Dot-com company, dot com stocks of the 1990s: both were industries built on new technology that had little capital (economics), capital, but fell prey to a stock market bubble, market bubble. Likewise, the documentary makes a comparison between the terrorist attacks of September 11, 2001 and the terrorist assassination of Archduke Franz Ferdinand in 1914. Venture Capitalist Tim Draper appears in the third episode and speaks about his success at the time with Outlook.com, Hotmail for email and other early internet investments. This was many years before Draper would go on to invest in many other successful tech companies of the 2000's, including Tesla, Inc., Tesla, Coinbase, and even a large purchase of Bitcoin from a sale of the cryptocurrency after the fall of the Silk Road (marketplace), Silk Road after 2013. The production was financed by donations from Electronic Data Systems, FedEx, BP, The Pew Charitable Trusts, John Templeton Foundation, Smith Richardson Foundation, and the Corporation for Public Broadcasting.


See also

* ''Free to Choose''


Notes


External links


Official Commanding Heights Site at PBS (High-Bandwidth)




* [https://www.pbs.org/wgbh/commandingheights/lo/story/index.html Link to view all three episodes at PBS website (Low-Bandwidth)]
The book's Amazon page
{{DEFAULTSORT:Commanding Heights: The Battle for the World Economy, The 1998 non-fiction books Books about globalization Books about capitalism Documentary films about globalization Films based on non-fiction books Free Press (publisher) books Manmohan Singh Jawaharlal Nehru Books about the economy of India