Commanding Heights Analysis

Commanding Heights (Critical Survey of Contemporary Fiction)

In COMMANDING HEIGHTS: THE BATTLE BETWEEN GOVERNMENT AND THE MARKETPLACE THAT IS REMAKING THE MODERN WORLD Daniel Yergin and his co-author, Joseph Stanislaw, survey the changes away from state-controlled economies to the free market which has emerged with the globalization of the world’s economies and after the collapse of the Soviet Union.

The title refers to Vladimir Illyich Lenin’s 1922 statement that it was necessary for the Soviet government to control the commanding heights, or the primary sectors of the economy. The 1917 Russian Revolution presented an alternative paradigm to market capitalism, and the Great Depression of the 1930’s undermined faith in markets. By the late 1940’s the market was in retreat everywhere, and not only in the communist bloc: Great Britain’s Labour Party nationalized much of the economy, most of the third world followed a socialist path, and the United States pursued a policy of broad government regulation of business.

However, by the 1970’s government dominated economies were stagnating and worse. One of the heroes of COMMANDING HEIGHTS is Margaret Thatcher, who was a key catalyst in rehabilitating the market economy, and not just in Britain. Yergin and Stanislaw argue the importance of ideas: John Maynard Keynes and his interventionist theories were dominant from the 1930’s, but in the latter part of the twentieth century, market advocates such as Friedrich von Hayek and Milton Friedman and his colleagues at the University of Chicago have had the better of the argument.

The authors note that there is no guarantee that the market’s victory will be permanent. Environmental challenges, the welfare needs of increasingly older populations, and national and cultural differences must be accommodated. In addition, the market must deliver economically, and not just to the few at the top. COMMANDING HEIGHTS is an important book about a major subject.

Sources for Further Study

Commentary. CV, April, 1998, p. 62.

Commonweal. CXXV, April 24, 1998, p. 26.

The Economist. CCCXLVII, April 18, 1998, p. S5.

Foreign Affairs. LXXVII, January, 1998, p. 135.

Fortune. CXXXVIII, August 3, 1998, p. 48.

The Nation. CCLXVII, July 6, 1998, p. 42.

The New York Review of Books. XLV, October 8, 1998, p. 32.

The New York Times Book Review. CIII, February 8, 1998, p. 7.

Publishers Weekly. CCXLV, January 26, 1998, p. 81.

Washington Monthly. XXX, March, 1998, p. 39.

Commanding Heights (Literary Masterpieces, Critical Compilation)

Daniel Yergin is president of the Cambridge Energy Research Associates, the vice chairman of Global Decisions Group, and a prominent consultant on the international scene. His The Prize: The Epic Quest for Oil, Money, and Power was the recipient of the Pulitzer Prize and was made into an eight-part Public Broadcasting System television series. He has also written about the Cold War in Shattered Peace and co-authored Russia 2010, on the future of noncommunist Russia, as well as Energy Future and Global Insecurity. His co- author, Joseph Stanislaw, is an adviser on international markets to both governments and businesses.

Like The Prize, Commanding Heights ranges across the world, includes many prominent personalities, and features numerous historical anecdotes. Both studies, while organized on a historical basis, speak to current events: history becoming the present. In Commanding Heights, the authors tell the story of the world’s economies, particularly since the end of World War II, and argue the revolutionary importance of the change from government planning and governmental-political control of national economies to the revival of the competitive market system as the world’s dominant economic engine.

Their story opens in Moscow’s Izmailovo outdoor market in the early 1990’s, where anything and everything was for sale, from czarist memorabilia to South Korean electronics. For Yergin and Stanislaw, this was symbolic of the beginning of a return to Russia of the market economy. Ironically, also available at the Izmailovo market as historical curiosities were pins bearing the face of Vladimir Ilich Lenin; the title, Commanding Heights, refers to a statement made by Lenin in 1922 at the time of the adoption of the Soviet Union’s New Economic Policy, which allowed for limited private trade and agriculture and thus represented a step back from the anticipated communist utopia. Lenin was attacked by his Marxist colleagues for backtracking, but he argued that the state would still continue to control the “commanding heights,” or the most important elements in the economy. In time, particularly after the Great Depression of the 1930’s and World War II, the idea that the state or the government must hold the “commanding heights” of the nation’s economy was widely accepted, and not only within the communist bloc. Great Britain and the other countries of Western Europe increasingly moved into what was called the “mixed economy,” a combination of capitalism and socialism, and India and much of the Third World also nationalized key industries, communications systems, banks, and financial institutions, concomitantly expanding the welfare state. Where public ownership was less the resort, as in the United States, then heavy government regulation of the economy was the result. By the late 1980’s, the Soviet system, with its state-controlled economic system, failed, and the Soviet Union imploded. An era had come to an end, not only the end of communism but also of government domination of national economies in general.

The authors pursue a historical survey of how so many individuals and governments had come to believe that the market system had failed. They find the explanation in the Communist Revolution, the Great Depression, and the challenges of World War II: laissez-faire capitalism no longed worked. Ideas have consequences, according to the authors, not least those of John Maynard Keynes, who contended that governments, through spending policies, deficit financing, and taxation, could successfully guide a nation’s economy. The victory of Great Britain’s Labour Party in 1945 was a notable sign of changed perceptions and approaches; on the opposite side of the world, when India achieved independence in 1947, Jawaharlal Nehru, the new prime minister, pushed Britain’s former “jewel in the crown” into the socialist orbit. Yet it was not merely socialists and others on the left who became converts to government control. The otherwise conservative Charles de Gaulle of France claimed that the state “must hold the levers of command,” and Britain’s Conservative prime minister Harold Macmillan noted, “You [the voters] have never had it so good.” In the United States, the Republican Richard Nixon supported full employment through government programs, wage and price controls, and a Cost of Living Council, commenting, perhaps ironically, “Now, I...

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