Sociology 2: International Sociology, Class #2:  Commanding Heights Part 1

Instructions:  Enjoy the video!  But, also pay attention.  Below are a list of important ideas, concepts, names, and events.  I won’t ask you to memorize them all... but pay attention when these topics come up.

A.  Crucial point that I want you to get out of the video:  Recognize that there are two major ways that states (governments) have dealt with the economy over the past century:  1) Through regulation and central planning of markets (socialism or communism).  And, 2) Through “free markets” (free market capitalism).

Remarks: 

1.  Most countries are neither pure socialism nor pure free-market capitalism – but rather are somewhere in between.  For instance, Britain was quite socialist, but also allowed free markets in some parts of the economy.  Likewise, the United States currently favors free markets, but still regulates economic activity a fair bit.  Also, countries can change over time.  For instance, both the US and Britain have moved more toward free markets.

2.  Both socialism and free market capitalism have produced economic successes at various points in history – as well as economic disasters.  Each has benefits and drawbacks.  Currently, most governments believe that free market capitalism does better.

3.  The recent trend toward free-market capitalism has fostered economic globalization.  The material in the video is an important foundation for understanding globalization.

B.  Concepts to pay attention to (listed roughly in the order mentioned in the video):

The “capitalist revolution”

John Maynard Keynes – Keynesianism, state regulation

Freidrich Von Hayeck – Free market capitalism

Communism, Marxism, Socialism

Government regulation, government control of economy

“Commanding Heights” of the economy

Inflation / Hyper-inflation

Stock market bubble / crash

The Great Depression / Deflation / “Run” on banks

Fascism

Macro-economics

The “New Deal”

Regulating Capitalism

Bretton Woods Conference

Nationalized Industries / Mixed Economy

Welfare State

Milton Friedman

Price Controls / Wage Controls