RS Regulators 1 “Commanding Heights”
As a child growing up I was always intrigued
by history, specifically the American wars and diplomacies of the past century.
When it comes to history I have so many “whys”. Why is there war? Why is the
world the way it is? Why is money different around the world? Why do we have a
global economy? Back
then I never thought about the wages of war, such things never cross my mind. At
the time I was young and all I that stuck with me were the words and picture
that were black and white. Everything was black and white to me until I watched
the PBS documentary, “Commanding Heights: Episode One”. This documentary
brought color to my mind. It helped me develop a new perception of politics,
war, and terrorism in the sense of economics. Financially speaking, I grasped a
better understanding of political decisions since the turn of the century and
the economic theories that stimulated the outcome. Each significant global event
of the past 100 years are valuable fragments that were forged by the resilient
works of economist molding the global economy as we know it today. The
everlasting debate amongst economists and politics decipher whether it is
better to have more government control yielding a foolproof economic system or let
the cards play out to let free markets fix themselves overtime?
In a condensed overview the documentary defines globalization
as periods where free markets predominate, and countries place few if any
limits on imports, exports, immigration and exchanges of information. Overall,
they see globalization as a positive movement that improves the standard of
living for all the people connected to it, from the richest to poorest.
Globalization has come about in stages of economists. The
legends John Meynard Keynes and Friederich Hayek were the first to steer this
world in a positive direction at the time of the Great Depression, notably one
the world’s worst economic disasters. Keynes affirmatively implemented his idea
that in times of economic disparity the government should spend money to create
debt in order to stimulate the economy because eventually the economy will turn
around and follow with a surplus or a boom. Many governments and people took
this theory into consideration as did President Theodore Roosevelt with his New
Deal package creating government agencies to generate new jobs for the
unemployed. This is just a broad outlook on Keynesian economics but his
strategies carried over to World War II as jobs that were needed on the home
front to support the war effort. Positively, the United States was able to pull
out of the Depression. This wasn’t the end of Keynes’ political influence as
this economic policy spread globally to Eastern Europe, South America and
Africa adopting the idea of socialism. On the other hand, Hayek was a firm
believer in a free market economy. He described that an economy is to be
similar to how a river works. In his own words Hayek illustrates “to survive the free market must be allowed
to have its ebbs and flows”. His metaphoric
interpretation is that the free market flow like a river; there will be ups and
downs twists and bends but in the end economy will work itself out to a stable
momentum. Hayek believed that government regulation on the market would lead to
government control and would ruin the economy. Both these men were not wrong
with either of their policies because each economic tactic were successful but
encountered flaws that stand to be corrected by future economists and analysts.
At the time of World War II, there was a worldwide depression
and everyone was looking for a way out. As most of the world economies accepted
either Keynesian economics or Hayek’s free market theory, two men did not. Not
a surprise that Adolf Hitler along with Joseph Stalin despised this idea of
capitalism and socialism because they faithfully trusted the philosophies of
Carl Marx and Lenin. Hitler and Stalin shared this vision of one day
globalizing the world, and forming a communist society with their own hands. These
men dictated powerful countries, with powerful militaries which they used to
their advantage as they were set out to destroy all capitalistic systems. This
battle to fight against communism became a worldwide dilemma lasting for nearly
50 years. Countries were up in a toss and began forming diverse economies which
eventually led to a crash in Europe because that was the dictator’s first
targets.
It was until the late
1970s, with Keynesian theory peaking and communism spreading like wildfire,
when Margaret Thatcher was crowned the United Kingdom Prime Minister and Ronald Reagan was sworn in as President of the United States. Both of which took
Keynesian economics and threw the policies out the window. Ironically they take
Hayek’s free market ideas into consideration and begin to implement them into our
government. Regan went a little off track with Hayek’s free market idea and
decided it would be best to raise taxes and cut government spending in order to
stable the market because we were spending too much for too long. This is not a
bad idea on his part because he reinforces the monetary value of the US dollar
decreasing volatility in the currency. Government control is necessary if
needed but both believe it should not influence the free market economy because
it can disrupt it because it is fragile in a sense.
I cannot hold back how ecstatic I
feel about this documentary because it is amongst the most informational videos
I have yet to come across in
which I recommend to any interested in the history of politics and business. In
addition it was thought-provoking
as I discovered how money and economics played such a vital role for the
evolving inexperienced market driven global society. It is something new in
history to consider the world to be globalized and market driven but it is
clear why it has come about. Economics is all around us in every aspect of life
but from this I learned it is how we go about to plan, foresee, stimulate, and
regulate an economy to determine its present success as well as it potential
for the future.
"War used to be something you could stand on the nearby hill and watch. Now we have total war; everybody's in it. We have total economics as well. Everything affects everybody. The Malaysian currency shakes, and people around the world are seriously affected"- Salman Rushdie
