COMMANDING HEIGHTS 2 – THE AGONY of REFORM

                                                     VIDEO NOTES

1 – Prologue

2 – The Ghosts of Norilsk    3.52

       much of world based economy on central planning; industrialized in one generation; 

       Norilsk plant symbolized Soviet industry; started as prison camp; millions rode slow 

        train to prison; checked out wrong book in public library; trial lasted ten minutes; 

       slave labor, crucial component of Soviet economy; enemies of the people;    

3 – Behind the Iron Façade     8.16

          truth about the Soviet economy; sealed from outside world; Russian double-agent;

         to penetrate secrecy; KGB became suspicious, put him under arrest;  he knew the 

        system from the inside; evaded KGB, made his way to Finland forest border;  KGB 

        checkpoint; Gordievski in London; important foundation – economy; under great 

        stress; more than a third of economy devoted to military; at least 50%;  

        Soviet military might rested on a crumbling economy; claim success, deceiving  

    the world; the real story … an empty shell … standard of living a fraction of western; a 

        mess; why worker’s in state mines unwilling to work; no incentive; you can do two 

       things – gun to head like in Stalinist times or give him incentives; factory managers 

       saw the factory was not working because they saw the workers were not working;

       the collapse of a great empire    

4 – India’s Permit Raj    16.32

         like the Soviets, centralized planning; controlled everything in the private sector; 

         everything needed a government permit; red tape and bureaucracy; businessmen 

         found it impossible to get anything done; impossible to work in system … so work 

         around it; bribes … corruption; no competition; shoddy goods, high prices; growth 

        crippled; 15 years to get a car; Hindustan Ambassador cars; 18,000 sold; same 

        design; over protected, over administered, over managed

5 – Latin America Dependencia    19.36

6 – Counterrevolution in Chile  21.38

           economy in trouble; Allende elected; more government; Allende overthrown;  

7 – Chicago Boys and Pinochet    25.08

            exchange students, absorbing Chicago School; minimal govt.; free market; 

8 – Heresy in the U.S.S.R.    33.23

           people started to question the system; not talked about in public; not Marxism but 

           markets; some illness; tried to discuss with professors; you are crazy; I read books 

           by Hayek and Friedman;  Gorbachev appalled by the economic decay; launch 

           Sputnik but not women’s panty hose; basic necessities; Perestroika; restructuring; 

           reform; 7 generations with no experience with markets; started to allow some 

           private enterprise; removed controls of central planning without replacing them; 

          Reagan and Thatcher; Reagan speech – march of freedom and democracy, stifled 

          freedom and self-expression; Thatcher and Gorbachev; market economy runs itself; 

          1987 – Reagan, Berlin Wall; if you seek peace … prosperity … Mr. Gorbachev … 

          open this gate … tear down this wall;    

9 – Poland’s Solidarity     41.31

10 – Bolivia on the Brink   49.02

11 – Shock Therapy Applied   56.11

12 –  The Miracle Year    1:00.58

            Economist Sachs works in Poland; 

13 – Poland in Transition     1:07.42

           reforming state industries; much tougher task; old industries inherited from 

          Communist past; overmanned efficient and profitable meant lay-offs

14 – Gorbachev tries China   1:10.24

             feeling this was a disaster

15 – Soviet Free Fall     1:17.45

           August, 1991 coup attempt

16 – Reform Goes Awry  1:22.38

              New Year’s Eve, 1991, price controls freed; end of everything the communists 

              had stood for; 

17 – India Escapes Collapse   1:27.00

           adopts free market;   

18 – Russia Tries to Privatize    1:30.17

19 – Loans for Shares    1:35.49

20 – Closing the Deal   1:42.10

        goal to create business class; prevent communists from coming back; oligarchs 

         backed Yeltsin’s campaign; his victory; 

21 – A Decade of Radical Change   1:45.48

          start of new millennium, new world … looked to market; as though whole world 

         changed it’s mind; governments have retreated from the Commanding Heights ; 

          Poland; Poland has flourished; small businesses started after economic reform; 

 Argentina – final collapse; Russia – oligarchs reigned in; MY SON DOES NOT 

         KNOW WHAT COMMUNISM IS ; CAPITALISM NOW THE RULE; ERA of 

         GLOBALIZATION HAD BEGUN

END  1:53.3X