Class Sessions

Text Reading | Topics | Discussion Questions 

At the conclusion of this session please post your discussion questions as a single set of responses under the heading DQ5.

 

Session 5: The Battle for the World Economy Episode Two  The Agony of Reform. 
 
Reading Assignments: 

Daniel Yergin and Joseph Stanislaw, The Commanding Heights. Video Transcript Two

 

  Discussion Topics:

In the 20th century, most of the world's nations tried to create prosperity through government control of their economies -- from the totalitarian central planning of the communist world to more democratic nations that tried to develop their economies by nationalizing industries and protecting them from foreign competition.

But in the 1980s those policies began to fail dramatically, and the fall of the Berlin Wall unleashed an era of dramatic and turbulent economic reform around the world -- in Russia and the Eastern Bloc nations; in democracies like India that had embraced central planning; and in Latin American countries, which had developed their own brand of government control of economic life, based on a theory called dependencia.

"The Agony of Reform" tells the story of how those economies failed and how new leaders embraced the idea of "shock therapy" -- a rapid conversion to free-market capitalism. The program focuses in detail on how reform played out in several countries -- Russia , Poland , India , Bolivia , and Chile -- as they lived through the upheavals of rapid change, dealing with both the new freedoms and the new dangers of privatization, deregulation, and freewheeling competition.

  Discussion Questions:
  1. What are the benefits and dangers of open flows of capital and trade in goods across all national borders?
  2. What have we learned about the effects of imposing price and wage controls, of deficit spending, trade tariffs, and subsidies?
  3. What have we learned about the effects of government regulation of markets and privately owned industries?  
  4. What have we learned about government use of fiscal vs. monetary policy in promoting economic growth?
  5. Compare the benefits and liabilities in nationalizing private enterprises and turning them into state-owned industries.

Class Sessions