Book Review Group 14
Presents
Book Review on
“The Commanding Heights:
The Battle for World Economy “
Meet the Authors...
Dr. Daniel Yergin
• Co-founder and chairman of
Cambridge Energy Research
Associates (CERA)
• Won Pulitzer for “The Prize”
Dr. Joseph Stanislaw
• Co-founder of CERA
• Financial Adviser
Basic theme of the book...
Economic Regimes
of Socialism
vis-à-vis
Free Markets
What Globalization
really is
A riveting narrative through history describes these two issues...
Title of the book...
Vladimir Lenin’s 1922 speech on the “New Economic Policy”
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.
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 (1950s1970s)
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.
Some ideas from the book...
“First Age” of globalization…
“The first era of globalization took place from 1870s
till 1914—the 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”
The War, and Communist revolutions
First World War (1914-1919)
Communist Revolution in Russia
The Great Depression (1929-1933)
Clash of the Titans: The “Battle of Ideas”
John Maynard Keynes
Friedrich von Hayek
Socialism and Keynesian thought rules…
France
India
Russia
Winds of Change…
“As the oil shocks of 1970’s grabbed headlines,
general slowdown in the world economy stared
everyone in the face, and several nations started
showing the cracks in communism, two Hayekinspired 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…
Change is here... The reforms of 1980s
Britain’s Iron Lady PM Margaret Thatcher speaks on
”Popular Capitalism” and lessening state control (1986)
The “Dancing Elephant:” India Surges
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:
“It’s 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 [...]“
Dawn of the “Second Age” of globalization
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.
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 countries—their 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-à-vis other countries gives fresh
perspectives.
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.
Remarks
The book is an excellent read for everyone because globalization
and economics touch everyone’s 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?
Recommendations
1. “Commanding Heights” has been made into an excellent 6hour documentary available on the PBS website. It is a mustwatch 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.
Conclusion
In our opinion, market forces are to be seen as forces of
nature—like 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…
Thank You!