WASHINGTON, May 27 (UPI) -- Can a discipline that's been called the "dismal science" be the subject of a six-hour TV documentary that will glue you to your set and keep you coming back episode after episode? Surprisingly, yes.
The PBS series "Commanding Heights: The Battle for the World Economy" combines historical sweep, narrative flow, and cinematic appeal. The theme is globalization, and the "battle" is between market forces and government intervention.
But the series is no simple paean to social Darwinism.
"Markets do go to excesses," series commentator Daniel Yergin told United Press International in the Washington offices of Cambridge Energy Research Associates, a group he heads.
Yergin agrees with those who say President Franklin Roosevelt and his Brain Trust probably saved capitalism during the Great Depression. Without the confidence restored by such New Deal agencies as the Securities and Exchange Commission, the system might not have stabilized and much worse might have happened, he said.
"The European view of the United States is this late 19th century Wild West capitalism. But in fact what we are is still a pretty highly regulated welfare state. ... And a lot of the regulation in this country is done through litigation. ... Whatever you call it, you need a social safety net as part of the whole deal."
"In 'Commanding Heights' we're more telling a story than making an argument," he said. Nevertheless, the theme of the series seems clear: markets work, and government economic planning does not.
The title comes from a speech Vladimir Lenin made to the Fourth Congress of the Communist International in St. Petersburg in November 1922. The year before, facing economic breakdown, Lenin -- in desperation -- had allowed the resumption of trade and private agriculture on a small scale. Now he was being attacked by Communist militants for compromising with capitalism and selling out the revolution.
The ailing Lenin defended himself by saying the state still controlled the "commanding heights" of the economy, primarily heavy industry.
Some of the best minds of the early 20th century were attracted to left-wing politics. For example, George Orwell, revered by English-speaking conservatives, remained a socialist till the day he died. It's not hard to understand why.
Orwell witnessed the suffering of honest, hard-working people whose lives were ruined by the Great Depression while governments did little. But the central planning and command economies of World War II brought prosperity. Or so it seemed. Why couldn't government have acted sooner? Socialism appeared vindicated.
"Commanding Heights" captures the mood in Britain after World War II, when voters elected the Labor government of Christian Socialist Clement Atlee. Planning had won the war, Atlee said, and now would win the peace. Why shouldn't people who had been through the war together pool their resources? The Bank of England, coal, steel, and rail were nationalized, as well as civil aviation, gas, electricity, and many communications networks. The National Health Service was created with the implicit promise of "womb to tomb" security.
Of course, the wartime model was invalid in many ways.
As British historian Corelli Barnett has written, "War is the great auditor of institutions." If a warplane is poorly designed, it will be shot from the skies. Non-competitive tanks will be swept from the battlefield, and ships will be sunk.
And long before World War II, it was well known that the great weakness of socialism was the absence of an effective pricing system. In total war, the price of goods is subordinated to the need for victory. There is no peacetime analogy.
It came as a surprise to learn from the series that we live in the second age of globalization in modern times. The first one ended with the outbreak of World War I in the summer of 1914, and the current one began with the fall of the Berlin Wall in 1989.
By the end of the 19th century, the world was tied together by the telephone, the telegraph, steamships and railways, overcoming the dependence on horse traction and sail. Trade flowed freely in this newly emergent global market. But it would be almost 80 years until another global economy emerged.
"A lot of our institutions were created to deal with what happened between 1914 and 1945," Yergin told UPI, referring to such things as the United Nations, the International Monetary Fund, Social Security, and the General Agreement on Tariffs and Trade, which developed into the World Trade Organization.
In the democratic West, the gurus of opposing schools of economic thought found themselves on the same rooftop serving as air raid wardens at Cambridge University during World War II. One was John Maynard Keynes, an Englishman who advocated government intervention to control capitalism's cycles of booms and busts. (In 1919, Keynes had accurately predicted that terrible consequences would flow from imposing ruinous economic penalties on defeated Germany.) The other was Friedrich August von Hayek, the Austrian émigré who argued that government intervention would erode human freedom and was doomed to failure.
Throughout the Depression and until the "stagflation" of the 1970s, Keynes' ideas were ascendant. (The University of Chicago was a free-market outpost.) In the early 1980s, Margaret Thatcher in Britain and Ronald Reagan in the United States implemented principles of Hayek's philosophy.
"Commanding Heights" shows how the 1982 Falklands War "saved" Thatcher. Before the war, she had the lowest poll ratings of any prime minister since they started taking polls, Yergin said.
But the victory gave her the political capital to de-nationalize British industry and sell shares to the public.
The Thatcher reforms wrote the economic script for large parts of the world, Yergin told UPI. "It's very striking that of the major European economies, Britain is doing best."
A dramatic revelation is Thatcher's decisive role in liberating Poland from communist rule. The prime minister made seeing Solidarity leader Lech Walesa a precondition of her 1988 trip to Poland. The two met at a dinner at the home of Walesa's priest, an event captured by a Solidarity cameraman and shown in "Commanding Heights."
"That film had never been seen until we found it," Yergin said.
"You don't say no to Mrs. Thatcher," said Walesa, interviewed for the series. He called her visit "crucial," an event without which he and his Solidarity partners might have been "destroyed."
In August 1990, after Solidarity won a national election, the head of Poland's Communist Party called Soviet leader Mikhail Gorbachev for instructions. Let the election stand, Gorbachev said in the phone call that ended the Cold War.
But the collapse in world oil prices that helped Ronald Reagan, plus the 1986 Chernobyl nuclear disaster, doomed Gorbachev's attempts to reform Soviet communism through a process he called perestroika.
The series contains much more than can be summarized here. For example, it explains why the U.S. bailout of Mexico in 1995 was a good deal for America and that the loan was repaid early. It also gives the clearest explanation for the Asian financial crisis of the late 1990s this reviewer has seen.
The series, based on Yergin's book written with Joseph Stanislaw, is being broadcast for a second time. Episode 3, "The Agony of Reform," will be shown on Thursday, May 29, at 10 p.m. A companion Web cast with in-depth interviews can be found at pbs.org/commandingheights/.
"Commanding Heights" -- first broadcast in April 2002 -- has been updated to incorporate the recent skepticism about financial markets. It also asks what happens to globalization in a new era of turmoil and conflict generated by the terrorist attacks of Sept. 11, 2001.
"I think the answer is it doesn't work so well," Yergin said. Conflict requires more government controls, and confidence in the future is eroded. "Market systems work when people make bets on the future."
Yergin said one of the explicit motives of Osama bin Laden, suspected Sept. 11 mastermind, was to damage confidence. "Last autumn he said he wanted to attack the hinges of the world economy. Look at the deplorable state of the airline industry."
Yergin defined globalization: "It's expanding trade. It's global investment. It's ideas and communications. It's people who have been around the world. The number of people flying between Asia and the United States has increased six-fold in 15 years," he said. "Americans made 200 million phone calls overseas in 1980 and 5.2 billion by the end of the 1990s. To me that's globalization, which is driven by the falling costs of transportation and communications. The cost of a phone call from New York to London is only 4 percent of what it was in the 1970s. That's how the world gets tied together."
The film presents the case of a very poor Chinese schoolteacher who left his rural village with his family to work in a computerized bicycle factory and is earning 20 to 30 times what he made before joining the world economy.
Asia is the showcase of globalization, Yergin said. "It was the poorest continent four decades ago, and now Singapore has a higher per capita income than Britain."
But what about accountability? Those who control the world economy (and it is not a monolithic cabal) are not elected, accountable public figures.
"The head of a securities fund is not paid to be a patriot," William McDonough, president of the Federal Reserve Bank of New York, said in the film. Last week the SEC approved McDonough's appointment to head the new agency Congress created to oversee the scandal-plagued accounting industry.
Is it enough for democratic leaders just to step out of the way and let the market work its magic?
Perhaps it's a matter of redistribution vs. growth. Yergin said New Democrats in the United States and New Labor in Britain have realized that their parties have put too much emphasis on redistribution and not enough on growth.
"It's a mistake to hem in the market too much," he said. "You really want that entrepreneurial energy."