- The Washington Times - Wednesday, April 3, 2002

Writing about politics without knowing anything about economics, a friend of mine once memorably put it, is a bit like standing on your head and waving your arms. While it is very difficult to do, the exercise does not make a whole lot of sense. Nevertheless, an amazing number of people have attempted this feat and continue to do so, at their peril.

With the benefit of hindsight, for instance, who could have doubted the outcome of the Cold War, considering the relative size of the American and Soviet economies? President Ronald Reagan once asked his advisers when informed that the Soviets had more troops, more tanks, more missiles, more everything than the United States "Isn't there something we have more of?" "Money," came the answer. "Then we will fight them with money," Mr. Reagan is said to have replied.

The unfolding battle of the world economy over the 20th century and at the beginning of the 21st is the subject of the six-hour PBS series "Commanding Heights," the first segment of which airs tonight. Vladimir Ilyich Lenin provides the snappy title, which refers to the strategic areas of production he thought should be under state control, and the series' authors, Daniel Yergin and Joseph Stanislaw, give an impressive overview of a vast and complex issue. One imagines that the conclusive victory of free-market economics over central planning and state control must have been rather a bitter pill to swallow at PBS, where capitalism is not often celebrated. Perhaps it is due to the meticulous case built by the authors, whose book of the same title has been published by Touchstone Books/Simon and Schuster, that the programs are aired at all.

At the beginning of the series, the authors pose two very good questions: "As the terrible events of September 11th drove the world deeper into a recession, new questions emerged about the perils of the new world economy. Can our now deeply interconnected world surmount a global downturn and rise above other crises? And is global terrorism the dark side of the promise of globalization?"

Based on Messrs. Yergin and Stanislaw's own analysis in the first part of the series, the answer would clearly have to be "yes" to the first question. The initial segment, "The Battle of Ideas," demonstrates how in the 20th-century-long struggle between government intervention (as represented by British economist John Maynard Keynes) and free market economics (as advocated by Austrian economist Friedrich von Hayek), capitalism and market forces won the day, from the United States to Europe to the former Soviet Union.

For one thing, last year's recession has since been downgraded to something less than that as productivity and other economic indicators rebounded in the last quarter of 2001. Even the spectacularly awful destruction of the World Trade Center did not have any lasting effect on the U.S. economy, engine of world growth. Given the relative resources of the United States and its allies, on the one hand, and the terrorists and their state sponsors, on the other, can anyone seriously doubt that the terrorists will be defeated or contained?

Now, the second question is much more open to debate. Obviously, the success with which the al Qaeda terrorists carried out their evil plans was helped by the openness of our society and increased mobility of people across borders. Is their radicalism rooted in a backlash against the economics and politics of "globalization?"

In fact, the second segment, "The Agony of Reform," reminds us of the human cost of the rapid conversions to free-market economies in the 1990s, even though "shock therapy" was clearly necessary in Eastern Europe and the former Soviet Union. In the Soviet Union, equality of misery had been the order of the day. Once communism fell in Russia, privatization bordering on piracy created a few extravagant winners and millions of losers.

As explored in the third segment of the series, "The New Rules of the Game," the embrace of free trade, of "globalization," that characterized the 1990s, has generated a sometimes violent public debate. Perceptive observers have pointed out that, despite the vast difference in scale, the terrorists of September 11 had a certain amount in common with the anti-globalization demonstrators who descended on Seattle, Geneva, Stockholm and other venues of international meetings a deep-seated hatred of the modern world.

It is important to note, however, that the terrorists and the mastermind behind them, Osama bin Laden, hailed from a part of the world that has not been touched by globalization. In fact, the Arab countries lag far behind in democratization, in respect for human rights, in diversified economies, in the production of much of anything besides oil. The argument could surely be made that it is the absence of globalization and the benefits it brings, which motivates suicide bombers, whether in the United States six months ago or in Israel today.


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