The Commanding Heights
Yergin, Daniel & Stanislaw, Joseph
Winfield Scott resigned from the Army in October 1861 and died in the hotel at West Point on June 1, 1866. He served fourteen presidents, thirteen of them as a general officer. A man who carried out...
...Or did the Soviet economic system in fact work well for a time, and if so, why...
...The deeper point that a bit more attention to intellectual history might have suggested is that however excessive government regulation became, America never shared the rest of the world's weakness for socialism...
...No less interesting are the many figures of the left who, having come to recognize the superiority of markets, helpedto lead the charge rightward, often without explicitly cashing in their leftist credentials...
...Referring to the statist policies adopted after the war, they say: "Who could deny the success of the experiment...
...Name: (Please Print) Address: City: State: Zip: Date of change: L VCAFRMJ idea before or since has ever done...
...In their telling, "government" battles "the marketplace" for control of the economy...
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...Fifty years later, the trend has turned 18o degrees...
...Perhaps they thought America was capitalist because it was rich...
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...From the end of the Second World War until the oil crises of the 1970's, the industrial world enjoyed three decades of prosperity and rising incomes...
...Or was the point lost on most people because the cause and effect were reversed...
...These include not only reform Communists like China's Deng Xiaoping, but also Brazil's Fernando Henrique Cardoso, India's P.V...
...Their portrayal of mankind's gathering appreciation for the efficacy of markets is compelling, but the authors fail to ask why all this learning should have been necessary...
...It was the entire structure of the economy that had reached its limits...
...frontiers of the market to expand," write Daniel Yergin and Joseph Stanislaw in The Commanding Heights...
...An Indian leader is quoted: "What happened under Mrs...
...But this is too anthropomorphic...
...The authors seem to feel duty-bound to select one or two for portraiture in virtually each of the many countries covered...
...I waited in vain for Yergin and Stanislaw to suggest the answer...
...Why didn't this example have more apparent impact on others during the ensuing thirty years...
...France undertook its own version of nationalization, featuring worker "co-determination...
...T he Commanding Heights is easy to read, lightened with amusing touches...
...But it leaves unexplored some of the most interesting questions that these events raise...
...But they did so to influence the shape of market outcomes, not to replace or roll back markets...
...What was the impact of the American model on the world's learning curve...
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...Could they take other destructive forms...
...When he was born the country consisted of thirteen states...
...How did anti-capitalist ideas, which did so much harm, gain so much sway in our enlightened age...
...A tantalizing parenthesis in that sentence...
...And so it was...
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...The sine qua non of the recent discoveries of the Chinese, New Zealanders, Bolivians, and the rest was a vast curve of unlearning that stretched from 1848 or 1789 all the way into the latter half of the twentieth century...
...Sometimes, unfortunately, the reach for a light touch throws the authors off stride, as when they seem to ascribe the dawning of China's economic reform entirely to the 1978 drought in Anhui province...
...Less heroic, but also important to the story are a variety of politicians who won office on populist promises to transcend market discipline but who, once elected, doled out the bitter but necessary medicine they had campaigned against...
...Not only in Europe, east and west, was "planning" all the rage...
...Narashima Rao, New Zealand's Labour Party, Britain's Tony Blair, even, after an edifying experiment trying to implement socialism, Francois Mitterrand...
...Was Soviet economic success a lie, an easily swallowed bait of disinformation...
...Indeed many achieved the power to govern in the first place because of the appeal of socialism...
...But] by the end of the troubled 1970's, a new realization had gained ground...
...True, Chinese reforms were a process of unrehearsed trial-and-error, but this version omits the evidence that Deng was seeking a reform path after his first rehabilitation in the early 1970's and probably even in the 1960's when he coined the phrase, "Who cares if a cat is black or white as long as it catches mice...
...Why did the process of relearning take so long...
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...The American Spectator • May 1998 77 r MOVING...
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...No doubt Thatcher was immensely influential, and New Zealand and Singapore may have had their sway as well...
...According to Yergin and Stanislaw, Ludwig Erhard engineered the German economic miracle at a single stroke in 1948 by abolishing price controls overnight...
...The Commanding Heights slices off a big chunk of the fascinating story of our time—the glorious capitalist revolution—and weaves it together in a highly readable fashion...
...Yet he became a soldier almost by chance...
...As India's first prime minister, Jawaharlal Nehru, put it: "The idea of planning and a planned society is accepted now in varying degrees by everyone...
...In West Germany the reborn Christian Democrats, the right-wing alternative to the Social Democrats, denounced capitalism and promised economic "planning...
...It was not "government" that captured economies out of its own innate motives...
...Could they, finally, lead us once again to unlearn the benefits of economic freedom...
...The authors say: "In the aftermath...it is hard to understand the enormous prestige the Soviet system garnered...first through industrialization and then through the (apparent) very high growth rates of the 1950's and 1960's...
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...When Nehru explained that everyone accepts the necessity of planning, this was nearly 200 years after Adam Smith published The Wealth of Nations...
...A man who carried out the dreams and plans of other men, his legacy, writes John EisenhowThe Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World Daniel 'Yergin and Joseph Stanislaw Simon & Schuster /457 pages /$26 REVIEWED BY Joshua Muravchik I n the first decade after World War Two, Communism spread outward from the Soviet Union to eastern Europe, North Korea, and China...
...Yergin and Stanislaw barely mention this...
...Yergin and Stanislaw use that phrase in the title of their chapter about China, but seem to ignore the implication...
...The world over, governments have come to plan less, to own less, and to regulate less, allowing instead the JOSHUA MURAVCHIK is a resident scholar at the American Enterprise Institute...
...04 78 May 1998 • The American Spectator...
...To wonder why the relearning was necessary at all or about the influence of America's example is also to wonder about why things happened when theydid...
...Yergin and Stanislaw seem at times to suggest that state control of the economy worked well enough for a time but then outlived its usefulness...
...AiiiericanSpedator...
...when he died it filled the continent...
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...It was called socialism, an idea that gripped the imaginations of human beings as no other secular Why Lenin...
...The question presents itself strongly as regards Soviet economic history...
...Meanwhile, in Britain, the Labour Party won a historic parliamentary majority over Churchill's Tories and proceeded to nationalize industries comprising one-fifth of the nation's work force...
...If the problem was simply one of reaching limits, why did the whole world turn away from statism more or less at once, when the nations were at such diverse stages of development...
...Why Stalin...
...What were the needs that gave rise to them, and can those needs ever be fulfilled by or under capitalism...
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...Thatcher is, deservedly, the prime among the many heroes in this account...
...The best anecdote concerns the purported reply of one Chinese Communist reformer to a hard-liner's criticism of the market-oriented "special economic zones" that Deng had created...
...Although they range so widely that they sometimes sacrifice depth for breadth, the authors succeed in capturing a sense of global intellectual development...
...How easily ideas fly across borders...
...The engineer of Bolivia's economic liberalization tells Yergin and Stanislaw that the principal influences on him were the experiences of China and New Zealand...
...er, lay in being the chief agent of Manifest Destiny whose victories made national expansion possible...
...That's all there is to it...
...Fine, but where did the Soviet Union come from...
...A related issue arises in their treatment of the United States...
...This process of unlearning had its own logic and momentum...
...This oddly named but interesting book traces the world-wide learning curve about the virtues of markets...
...Peru's Alberto Fujimori and Argentina's Carlos Menem were the exemplars of this tactic, but Poland's Lech Walesa and Aleksander Kwasniewski did much the same...
...Yergin and Stanislaw depict government regulation as the American analogue to government ownership, and on that basis they weave the United States seamlessly into the story of the global struggle between government and markets...
...The narrative ranges over dozens of countries in Europe, Asia, Africa, Latin America, and it also includes the United States where "government [sought] to control the key parts of the economy not through ownership but through a distinctly American approach — economic regulation...
...On the other hand, when they discuss the economic success of the "little tigers" of East Asia, they say: "Most Asian governments did intervene—sometimes quite drastically...
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...Couldn't the same words be used to describe the American method...
...The authors attribute explanatory weight to the fact that "The Soviet Union enjoyed an economic prestige and respect in the West that is hard to reconstruct today...
...The hard-liners, he proposed, could create "special Leftist zones" replete with planning, rationing, travel restrictions, and bans on foreign investment...
...Theirs is a tale of economic history largely devoid of intellectual history...
...But could it be that no one noticed that the world's most capitalistic nation also happened to be by far the wealthiest...
...Rather, individuals in office expanded government control out of their own idealistic or other reasons...
...The nations of Africa and Asia, newly liberated from colonialism, were all but unanimous in their strategy of "planning" their way from backwardness to modernity...
...Thatcher was an eyeopener....After all we had gotten our Fabian socialism from Britain...
Vol. 31 • May 1998 • No. 5
