Book Review Group 14 Presents Book Review on The Commanding
Heights: The Battle for World Economy
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Dr. Joseph Stanislaw Dr. Daniel Yergin Meet the Authors...
Co-founder and chairman of Cambridge Energy Research Associates
(CERA) Won Pulitzer for The Prize Co-founder of CERA Financial
Adviser
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Basic theme of the book... Economic Regimes of Socialism
vis--vis Free Markets A riveting narrative through history
describes these two issues... What Globalization really is
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Title of the book... Vladimir Lenins 1922 speech on the New
Economic Policy
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Purpose of the book... Inform the reader of economic
developments in different countries of the world. Highlight the
differences between the economic approaches of socialism and
capitalism. Clarify various risks and opportunities of
globalization. Appreciate the power and success of market forces
and the role of state control. Give food for thought for the coming
years.
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A Brief Overview 1.The First Age of globalization (1870s-1914)
2.Rise of Socialism and state-control. (1914-1940s) 3.Success of
command economies and Keynesian thought (1950s- 1970s) 4.Decline of
communism. Adoption of Hayekian model. (1970s-1980s) 5.Decrease in
state control and large-scale reforms across the world
(1980s-1990s) 6.Advent of the Second Age of globalization.
(1990s-present) 7.Challenges to the new age.
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Some ideas from the book...
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The first era of globalization took place from 1870s till
1914the fateful year in which began the First World War. This
period of globalization was largely aided by three innovations: the
steam engine, the steam ship and the telegraph. These inventions
were instrumental in nearly instantaneous transfer of information
and facilitated much quicker movement of people and hence ideas.
Here we have a part of the first Mickey Mouse cartoon in 1928,
titled Steamboat Willie First Age of globalization
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The War, and Communist revolutions First World War (1914-1919)
Communist Revolution in Russia
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The Great Depression (1929-1933)
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Clash of the Titans: The Battle of Ideas John Maynard
KeynesFriedrich von Hayek
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Socialism and Keynesian thought rules FranceIndia Russia
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Winds of Change As the oil shocks of 1970s grabbed headlines,
general slowdown in the world economy stared everyone in the face,
and several nations started showing the cracks in communism, two
Hayek- inspired political leaders came into the limelight: Margaret
Thatcher in 1979 and Ronald Reagan in 1981. Here, we have a video
of the Iron Lady herself
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Britains Iron Lady PM Margaret Thatcher speaks on Popular
Capitalism and lessening state control (1986) Change is here... The
reforms of 1980s
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Its not about government disappearing [...] It is about
restructuring the role of the government. Getting government out of
activities where governments are not very efficient [...] Getting
government involved where [...] markets alone cannot provide the
necessary amount of goods: [...] basic education, basic health
care, environmental protection, basic social safety [...] In 1991,
India too finally gave up its licensing policy and underwent major
economic reforms: liberalization, privatization and globalization.
Page 397 of the book quotes Manmohan Singh, then finance minister:
The Dancing Elephant: India Surges
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Dawn of the Second Age of globalization
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Weaknesses of the book... 1.An over-simplification of the
Keynes-Hayek Battle of Ideas. Also Keynesian economics is
underscored, even though Hayek deserves more credit as later
economic models emulated him. 2.Assumption that perfect competition
would operate in markets. 3.Narrative in some places is fragmented
as the theme switches between chronology, economics and countries.
4.Not enough emphasis on sustainability and inclusiveness.
5.Comparison between state-owned undertakings and large private
corporations is absent. Only the former has been criticized.
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Strengths of the book... 1.Several original interviews of
economists and political leaders. 2.Interesting anecdotes and
behind-the-scenes approach to the development of socio-economic
policies. 3.Fair coverage of a large number of countriestheir
historical backgrounds and their main figures. 4.Clear narrative
with comparisons of historical and contemporary decisions and also
implications of the former. 5.Description of India vis--vis other
countries gives fresh perspectives.
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6. Examples of failures and successes of communism and market
forces. 7. Optimism regarding the future of globalization and also
market forces. 8.Illustrations to show the intricate relationship
between political setups and economic philosophy. 9.A conspicuous
balance in the use of jargon, which makes the book enjoyable both
for the common person and for the economist.
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Remarks The book is an excellent read for everyone because
globalization and economics touch everyones lives today. Civil
servants should especially read it in order to understand clearly:
1.How market forces operate? 2.What is the limit till which
state-control should be exercised? 3.What is the role of the
governments world over as a provider and enabler? 4.How has
bureaucracy and private sector both contributed to ushering in
globalization? 5.Where does India stand in the coming years with
respect to the rest of the world? 6.What are the impending problems
associated with globalization?
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Recommendations 1. Commanding Heights has been made into an
excellent 6- hour documentary available on the PBS website. It is a
must- watch for everyone. Group 14 highly recommends it to all! The
link is: www.pbs.org/wgbh/commandingheights/ 2. Another book called
Keynes Hayek: The Clash that defined Modern Economics by Nicholas
Wapshott further explores the theories of Keynes and Hayek.
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In our opinion, market forces are to be seen as forces of
naturelike the wind and the tide. To flow with them is being
reckless, and to resist them is futile The only solution is to
harness them for growth and development. It is in this context that
inclusiveness and sustainability are the next challenges to
globalization, which need to be met in order to have a truly
equitable and connected world, and a prosperous humanity
Conclusion
