Preparation for watching the videos
Using the Internet, textbooks, or other research sources briefly identify the following individuals (Where were they from and what did they do?):
Ludwig von Mises: _______________________________________________________
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John Maynard Keynes: ____________________________________________________
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Friedrich von Hayek: ______________________________________________________
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John Kenneth Galbraith: ___________________________________________________
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Milton Friedman: _________________________________________________________
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Ludwig Erhard: __________________________________________________________
________________________________________________________________________
Gary Becker: ____________________________________________________________
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Lawrence Summers: _______________________________________________________
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Jeffrey Sachs: ____________________________________________________________
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Nikita Khrushchev: _______________________________________________________
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Keith Joseph: ____________________________________________________________
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Lech Walesa: ____________________________________________________________
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Hernando de Soto (not the guy from the 1400’s): ________________________________________________________________________
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Episode One, “The Battle of Ideas”
https://www.youtube.com/watch?v=DoWbm8zUG6Y
Chapter 1: Prologue – 3:55
Chapter 2: The Old Order Fails – 8:11
Meet Keynes and Hayek
The first era of globalization
World war and revolution
Keynes foresees disaster
How did the Bolsheviks describe capitalism?
Why was Keynes opposed to the Treaty of Versailles?
Chapter 3: Communism on the Heights – 6:16
Hayek explores socialism
The Austrian School’s critique
What Lenin learned
Stalin’s totalitarian plan
What did von Mises and the Libertarians feel was the greatest flaw of socialism?
What are the “commanding heights” of the world’s economies? Who can control them? What is the significance of who controls them?
What changes did Stalin make to the Soviet economy once assuming power after Lenin?
Chapter 4: A Capitalist Collapse – 8:48
German hyperinflation
American boom and bust
Fascism takes hold in Europe
Can Keynes save capitalism?
What happened in Austria and Germany as a result of wartime reparations?
What factors caused this?
Chapter 5: Global Depression – 5:25
Roosevelt improvises
Regulating the markets
Keynes completes his Theory
Keynes’s apostles in America
After the US stock market crash of 1929, “the government failed to halt the downward spiral. In fact, it made it worse.” What did the government do?
How did Keynes describe the relationship between the failure of capitalism and the rise of fascism?
What effect did The General Theory of Money, Employment, and Interest have on the US economy? Explain.
How did Keynes influence John Kenneth Galbraith, and what did this mean to US government policy?
Chapter 6: Worldwide War – 7:00
A victory for planning
Hayek’s warning
Keynes at Bretton Woods
World at a crossroads
What did Hayek argue in The Road to Serfdom?
What were the significant outcomes of Bretton Woods?
Chapter 7: Planning the Peace – 6:47
Britain seeks “fair shares”
Churchill’s defeat
Labor nationalizes the heights
Communism’s rapid gains
What changes did Clement Atlee and the Labour Party bring to Great Britain? What sort of philosophical shift did this imply?
Chapter 8: Pilgrim Mountain – 3:43
Hayek’s Mont Pelerin conference
Enter Milton Friedman
Democracy and free markets
A long fight ahead
What was the goal of the first meeting at Mont Pelerin?
What did Milton Friedman have to say about freedom?
Chapter 9: Germany’s Bold Move – 4:11
The ruins of postwar Germany
Price controls vs. inflation
Erhard defies the Allies
The market economy revives
Chapter 10: India’s Way – 3:51
Nehru and Gandhi part ways
A science of central planning
The Mahalanobis equation
A socialist model for development
Chapter 11: Chicago Against the Tide – 7:32
Outside the mainstream
The spirit of Chicago
Harnessing economic forces
The Keynesian high tide
Chapter 12: The Specter of Stagflation – 6:34
What did Nixon mean when he declared, “Now I’m a Keynesian?”
Chapter 13: A Mixed Economy Flounders – 8:36
Britain under price controls
The “Mad Monk” repents
The grocer’s daughter listens
Thatcher and Hayek
Chapter 14: Deregulation Takes Off - 7:29
America bogged down
The airlines and Panamania
Deregulating the sandwiches
Costs and benefits
Chapter 15: Thatcher Takes the Helm – 3:50
The Winter of Discontent
Hayek’s birthday present
Shock therapy for Britain
The lady’s not for turning
Chapter 16: Reagan Rides In – 8:17
The double-digit dragon
Volcker at the Fed
Reagan tightens the reins
Tax cuts, deregulation, deficits
Chapter 17: War in the South Atlantic – 1:41
Argentina attacks
Thatcher gambles all
Victory’s dividend
An economic sea change
Chapter 18: The Heights Go Up for Sale – 8:08
Targeting state-owned industries
The economics of coal
Breaking the miner’s strike
Socialism turn back
Chapter 19: The Battle Decided? – 3:26
Idea politicians
The whole world watches
A century comes full circle
The battle decided for good?
How did the administrations of Margaret Thatcher and Ronald Reagan signify philosophical changes from their predecessors?
Episode Two, “The Agony of Reform”
https://www.youtube.com/watch?v=oykvdDm0qwk
Chapter l: Prologue – 3:49
A perilous interdependence
The capitalist revolution
Title sequence
Chapter 2: The Ghosts of Norilsk – 4:27
Slow trains to Siberia
The gulag economy
The essence of Soviet power
Socialism’s influence
Describe the Soviet town of Norilsk. How was this town typical of the Soviet economic system?
Chapter 3: Behind the Iron Façade – 8:18
A double agent escapes
What Gordievsky knew
The true cost of military might
No water, no fire, no incentives
Who was Oleg Gordievsky? What was his mission? What did he discover?
Explain why the Soviet economy suddenly appeared to be under so much pressure.
Explain both the meaning and economic significance of the attitude of the mineworker quoted as saying, “The people don’t want to work. They have no incentives.”
Chapter 4: India’s Permit Raj – 3:04
Central planning and corruption
Protection vs. innovation
The shortage economy
Hindustan vs. Toyota
Describe the basic characteristics of the Indian economic system.
Indians were said to work “around” the system instead of in it. How and for what reasons was this the case?
Why did the Indian government institute protectionist policies and what were their effects?
Chapter 5: Latin American Dependencia – 2:03
A shared suspicion of trade
Doomed to underdevelopment?
Dependency theory explained
The cost of closed markets
Latin America was a region rich in natural resources, yet doomed to poverty. How could this be the case?
Describe the “dependency theory” and the effects this theory had on Latin America’s economies.
Chapter 6: Counterrevolution in Chile – 3:30
The left wins an election
Allende is assassinated
An economy doesn’t obey orders
Seeking a serious blueprint
Describe the major economic actions of Salvador Allende Pinochet.
Chapter 7: Chicago Boys and Pinochet – 8:16
What Chicago stood for
Cutting the tail off the dog
Growth at a high human price
A tainted legacy
Who were “the Chicago Boys”? What was their role in Latin America? What were the consequences of their involvement?
Chapter 8: Heresy in the USSR – 8:08
A campfire conspiracy
Enter Gorbachev
The pantyhose commission
New pressure from the West
What unique perspective did Anatoly Chubais bring to the Soviet Union, and how did his countrymen receive him?
Reagan and Thatcher “determined to go on the ideological offensive.” What does this mean? What did they do? What was the effect?
Describe the worldwide significance of the fall of the Berlin Wall.
Chapter 9: Poland’s Solidarity – 7:32
Thatcher’s demand
The shipyards of Gdansk
A longing for freedom
The crucial meeting
Describe Lech Walesa’s influence on the Polish government and economy.
Why did Margaret Thatcher’s visit to Poland have such an impact on the Solidarity movement?
Chapter 10: Bolivia at the Brink – 7:07
Coups and hyperinflation
Bolivia confronts the tiger
Unreasonable amounts of money
Cocktails in La Paz
Why did Bolivia experience such problems in the 1980’s with inflation, and why was it so destabilizing to its economy?
Chapter 11: Shock Therapy Applied – 4:48
The bad news all at once
Common economic sense
The effect on Latin America
We did it in a democracy
What was “shock therapy” and what impact did it have on Latin American economies?
What was so extraordinary about Bolivian’s transition from a command to a market economy?
Chapter 12: The Miracle Year – 6:57
Poland in crisis
A phone call ends the Cold War
Extraordinary politics
Watching the price of eggs
Chapter 13: Poland in Transition – 2:39
Privatizing state industries
Solidarity loses support
The hardest hit had helped most
Poland’s entrepreneurial drive
What was the “phone call that ended the Cold War” and why did it work?
Chapter 14: Gorbachev Tries China – 7:17
Yavlinsky’s report
Gorbachev hesitates
Visiting Deng Xiaoping
No easy way out
Why did Gorbachev shrink from “shock therapy”?
Chapter 15: Soviet Free Fall – 4:52
Hard-liners strike back
The Soviet Union disintegrates
No one at the controls The boys in pink shorts
Why was the Chinese system so attractive to Gorbachev, yet why was he unable to mimic China’s path within the Soviet Union?
Chapter 16: Reform Goes Awry – 4:26
Jump-starting the market
The old guard fuels inflation
Norilsk in despair
Belief undermined
Chapter 17: India Escapes Collapse – 3:16
Watching Russia go down
Bankruptcy ahead
Turning against the party
Ending the Permit Raj
How does Sachs suggest that Russia was different from Poland even after the collapse of the Soviet Union?
Chapter 18: Russia Tries to Privatize – 5:33
Voucher capitalism
Bolshevik Biscuits
Gaidar sacrificed
The Wild East
Describe the phenomenon of the Bolshevik Biscuit Factory. How was this to be symbolic of Soviet reform?
Chapter 19: Loans for Shares – 6:18
Up against the Red Directors
Filatov of Norilsk
Fighting a Communist comeback
Yeltsin and the oligarchs
Who were “the oligarchs” and what is their significance to the Soviet story?
Chapter 20: Closing the Deal – 3:50
This way or nothing?
Potanin takes Norilsk
Responsibility comes later
Russia defaults; Yeltsin resigns
Chapter 21: A Decade of Radical Change – 7:38
Poland begins to thrive
Mixed results in Latin America
India’s new growth
Russia moves forward
Episode Three, “The New Rules of the Game”
https://www.youtube.com/watch?v=bSGAJTJzgLA
Chapter 1: Prologue – 6:14
Unforeseen risks
A single market no one controls
Title sequence
Who will rewrite the rules?
Chapter 2: The Global Idea – 3:52
1992: America’s economy adrift
Governor Clinton campaigns
Wall Street’s agenda
A meeting of minds
Describe the economic rhetoric of the 1992 presidential campaign (Bush, Clinton, Perot).
Why was Robert Rubin so focused on the “restoration of fiscal discipline”?
Chapter 3: NAFTA: The First Test – 5:28
Trade becomes the issue
That giant sucking sound
Clinton shifts his ground
Labor betrayed?
What was NAFTA? What was its purpose?
Why did major unions so vehemently oppose NAFTA?
Chapter 4: Crossing Borders – 3:30
Investment pours into Mexico
An American boom
Who wins; who loses?
The balance of bargaining power
Describe some of the effects that NAFTA has had on Southern Mexico vs. Northern Mexico
Chapter 5: The Global Market
Trade goes invisible
Markets are us
French culture at risk?
Pensions must go global
Chapter 6: Emerging Market Hunters – 5:01
Capturing returns
Opening borders
No need to be nice
Thwarting Marx’s predictions
When discussing international trade, capital flows are the biggest “trade” of all. What does this mean, and why is it so important to recognize this?
What is CalPERS, and why was it facing a crisis?
Chapter 7: Averting a Meltdown: 1994 – 4:56
Assassinations and revolt
Capital gets nervous
Fishing in the Caribbean
Moral risk in Mexico
What do Malaysia’s experiences suggest about capitalism? The Zapatista rebels in Mexico?
In 1994, the US faced the “first real-time, worldwide global financial crisis” with the instability of the Mexican peso. Describe the crisis, and what the US government did in response. How successful was this response?
Chapter 8: The Global Village – 6:47
Communication explodes
A borderless world
Venture’s capital
Talent flows, too
Describe the impact of the vast improvements in communication technologies on the global economy.
What is Narayana Murthy’s definition of “globalization”?
Why was Silicon Valley regarded as the “spiritual center of the new global village”?
Chapter 9: China and the Tigers – 5:35
David Lee goes home
China’s free-trade zones
Immigration’s next wave
Singapore’s “miracle”
Chapter 10: The Japanese Paradox – 3:01
Invincibility evaporates
Economic contradictions
A mountain of bad debt
Killing off new ideas
How did the Japanese export sector differ from its domestic manufacturing sector? How did their differences contribute to the Japanese slump of the early 1990’s?
Chapter 11: Global Contagion Begins – 7:35
Begging us to borrow
Flaws in the system
Building the bubble
Shorting the baht
List and describe the factors that led to the contagion that began in the Thai economy.
Chapter 12: Contagion Engulfs Asia
America doesn’t intervene
Indonesia implodes
Economic colonialism?
Korea at the brink
Describe how the Thai experience sent a ripple effect throughout the global economy. What other countries were adversely affected, and how?
What does IMF stand for, and what is their job?
What did the IMF discover when it traveled to Korea to inspect its central bank’s books? What did they decide to do?
Chapter 13: Russia Defaults – 2:31
Markets in denial
Countries do go broke
Russia defaults
Panic in action
Chapter 14: The Crisis Reaches America – 7:07
Long Term Capital Management
Brazil at risk
Is it over yet?
Thailand after the fall
Why was the President of the NY Fed so disturbed by the LTCM hedge fund? What risky strategy did he employ as a result of this concern?
Chapter 15: The Global Debate – 2:49
New risks, new requirements
Easier said than done
A new locus for rebellion
Anti-globalization is born
Chapter 16: The Battle Joined – 5:08
The streets of Seattle
A global labor contradiction
Invisible beneficiaries
A free-trade double standard?
Why did protestors flock to the WTO meetings in Seattle? What did they hope to accomplish through their actions?
Chapter 17: Failure at the Summit – 4:58
Clinton in a corner
Not seeing eye to eye
Getting off foreign aid
The World Bank under attack
Explain why these trade negotiations posed a prickly political problem for Bill Clinton. What did he argue?
Chapter 18: The Global Divide – 2:33
Poverty no one can ignore
Can a one-world market help?
Earning legitimacy
Why is it growing worse?
What were some of the things that representatives of LDC’s asked for in these negotiations?
What is meant by the following statement: “Globalization hasn’t caused poverty, but made the workers more aware.”
Jeffrey Sachs admits that the global divide between “haves” and “have-nots” has increased. How does he explain/justify this?
Chapter 19 Capitalism Redefined – 7:00
A tool for the poor to prosper
What’s missing in Peru?
Property, law, and trust
On the slopes of Kilimanjaro
What did Hernando de Soto argue in The Mystery of Capital?
Describe the situation of the coffee farmers in Kilimanjaro. What do these farmers desire to improve their situation?
Chapter 20: The Bottom End of Globalism – 4:46
The moral problem
Snake kids
Oliver Twist has a television
Clinton’s farewell
Clinton argued that the biggest and most necessary element of world peace is free trade. Explain what he meant.
Chapter 21: Changing of the Guard – 3:04
The trade agenda moves forward
Bush meets Fox in Mexico
NAFTA plus
A raison d’etre for the left
Chapter 22: The Battle Resumes – 6:38
Quebec City, 2001
The revolution will be streamed
Protests without solutions
The wrong diagnosis?
Castenada suggests that the outcome achieved by the protesters at the Summit of the Americas in Quebec was the antithesis of what they sought. Explain. Do you agree?
Clinton said that the same protesters (above) cared about the right problems, but without the correct diagnosis. What did he mean by this?
Chapter 23: After 9/11 – 3:47
Things can go in another direction
Terrorism and recession
Doha: The next round begins
Increasing the odds for peace
How do the events of September 11, 2001, compare to the assassination of Archduke Ferdinand just prior to WWI? Do you agree?
Why does Yergin say that markets work best during times of peace? What does this suggest about the appropriate role of the government in the economy?
What compromise was reached at the November 2001 WTO meeting?
Questions prepared by A. Willis, Arizona Council on Economic Education
Outline prepared by Professor Kate Johnson, University of Arizona
Edited by Judy Horgash, Chandler High School/Spring 2011
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