Commanding Heights of Economy

Since Sun Tzu, the Chinese strategist “Know your enemy” is still common parlance. There is still another more obscure and pardoxical saying, “keep your friends close but keep your enemies even closer”. We all have seen a lot of documentaries about the current global economic downturn (this is how the economists call it), from the Zeitgeist end of the spectrum to the Inside Job end of the spectrum.

But how about listening a bit to the other side of the story? Which side? Commooooon you will say, what other side of the story, everybody is fucking angry and critical about the whole mess. Nope! Not fucking true, there we have here this documentary screened on the US channel PBS, sponsored by a lot of neoliberal think tanks that shows you the history from the.. Bush’s side, the banker’s side, the Federal Reserve, Jeffrey Sachs/Harvard University side of things. It is definitely their side of the story. Hum? No mistake here, even if there are some inklings about the trouble in post-1989 Russia, the oligarchy, the destruction of the mining syndicates in the UK in the 80s, forced privatizations. Asia financial crisis. These are quite minor setbacks in a history that seems to be written, spoken and debated only by the major architects of the global world market of today. You will see some of the baddies from Goldman Sachs, Rubin, Treasury secretaries,  advisors, hell even Margaret Teacher gets a massive wash-over. Everybody talks as if nothing major happened except for the September 11 attack. After this series you might thank her(and Reagan) for directing you towards the Internet, freedom, democracy, private enterprise, free speech and free market capitalism.

This is not a conspiracy theory documentary, not at all, in fact it shows that most of the darkest scenarios might be true, because they get seemingly naive confirmation from the people who actually imposed shock therapy, austerity measures, economic boom&bust on us. Hell, the actual inventors, masterminds and economical big heads are all talking freely, squarely and openly about their intentions, methods, and highlights (lots of Nobel prizes for economy! hurray for everybody). Everything is euphemistic starting with the title that smacks of Emily Bronte’s romantic classic The Wuthering Heights, ooops sorry, it actually comes from a phrase by Lenin. The Commanding Heights are the big state industries – who will command them private enterprise or.. private enterprise, seems to be the conclusion. In episode two “the agony of reform” is again in the Romantic medical – hard to swallow pill – mood. Episode 3 is the new rules of the game, everything is a game for some guys, they gamble at this economic game and shit happens. It has been a very difficult to watch documentary but it was worth it i must say. It was worth it because for example you can hear a completely different genealogy of the neoliberal economics. Thus the story doesn’t begin in 1989 with the fall of Communism. Noooo, it doesn’t even start with the Chicago Boys school of economics getting in vogue in Washington and London. Nooo, it starts in the most infamous (for some, for the generals and their friends not really) South American history. I am talking about Augusto Pinochet and his military junta, those military guys that brought down the democratically elected left wing government of Salvador Allende (maybe you know the story from some other context) with the help of CIA agents and friends like Coca-Cola that where rapidly in need of protection because they where sent back home or getting their ass nationalized. Monetarism comes and save South Americans from themselves. They also save East Europeans from themselves. And its always the Bolivians, the Chileans, the Russians, the Polish who ask for help from Harvard’s youngest and brightest. After 1989 monetarism also became the evangelical truth at the Romanian School of Economics (i talked to people who finished A.S.E. in Bucharest)

The Chile coup d’etat is official history and everybody admits it, the new military junta invited the representatives of the Chicago School of Economics to teach them a lesson. The Chicago School of Economics smartass boys already had some very bright Chilean students just waiting for them around the corner at the local Christian University to start up the economy, introduce free market ideals and generally become a laboratory for neoliberal economic policies of the future. This was believe it or not the first big experiment (apart from the Berlin black market experiment also mentioned in the series) for a new kind of belief in the free market economy rule. Well, everybody said, what a pity the military government built internment camps in the desert to kill off all the dissenting voices(they are still looking for their scattered bones even now). What a unlucky coincidence to have had a coincidence that abolishing artificial price control, cutting government spending – worked hand in hand with a military dictatorship… There is also always the feeling that whenever something happens, a coup is going on, or the year 1989, or there is a group of sympathizing economists related to the Chicago School. All the big saintly figures of free market economy such as Friedrich August von Hayek  or Morton Friedman are interviewed and groomed. No these two are not the Sith overlord and his able pupil, but are very close to it. The whole legendary retelling of Hayek’s life, sitting hidden in the shadows of Keynesian economic success until his big comeback as the figurehead and inspiration for the new economic doctrine hailed by Thatcher and Bush points to this.  It is sure as shit no mere “battle of ideas” as the first episode calls it, it was millions of people sliding into economic poverty and no ability to repay debts after big promises. Hayek is being described as the outcast, the underdog, the lonely discredited survivor in the face of odds in period of central planning idealism, his comeback even more heroic in this downcast light. Seeing each episode is worthwhile because it gives you a taste about the canonic history of post-war economics that tends to disappear into legends outside of Economic School classrooms. Lets consider Bretton Woods meeting right after the war, where two of world’s most influential (and ominous) economic global institutions where founded: The World Bank and The International Monetary Fund. Or hey, did you know Hayek loved mountains, that he was heard saying “they breathe freedom”. That is why he organized a conference at Mount Pelerin (Pilgrim Mountain) where he invited a the former fashionable hotel in the Swiss alps in 1947 a group of dedicated 39 scholars, mostly economists, but also historians and philosophers adepts of the free economy. This became a first think tank that spawned other think tanks across the world: Institute of Economic Affairs, The Heritage Foundation, Fraser Institute, Atlas Economic Research Foundation etc etc

Or did you know about a group of dissident economists during the late 70s  hiding away in the Soviet forests organized reading group/seminars that discussed market economy and Morton Friedman’s and Hayek theories? This group was called “Reforma” and was led by Anatoly Chubais that became the chief privatizing man of the Russian/Soviet economy? (currently he is advisor at the JPMorgan Chase bank). These seminars in Leningrad and the small circle of people that got involved in them (they where afraid of KGB involvement and kept a low profile). They were telling jokes around the campfire that Ygor Gaidar (one of their seminar members and Soviet economist) would became prime minister or a prisoner. Well he became a prime minister and constituted the first wave of free market economists in the East. In spite of very localized and (for me at least) unseen footage(Margaret Thatcher at dinner suggesting the right ideals to Solidarity leaders in Gdansk, Poland in the 80s in a priests house), the whole series is told as a very and strangely Platonic battle of ideas, economic doctrines, ideologies, free market messages and beliefs. Market economy seems completely immaterial, based on airy and transcendently religious feelings and lofty ideas of individual freedom, market freedom and competitive cajoling.

Battle of Ideas (1)

The Agony of Reform (2)

The New Rules of the Game (3)

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