| 'Commanding Heights:
The Battle for the World Economy'
With Daniel Yergin
Author,
Chairman, Cambridge Energy Research Associates
Wednesday, May 21, 2003; 3 p.m. ET What happens to globalization in an era of falling stock markets, sputtering economies, threats of terrorism and war? The six-part PBS documentary, "Commanding Heights: The Battle for the World Economy," based on the book by Pulitzer Prize-winning author Daniel Yergin and Joseph Stanislaw, explores the debate over globalization -- the rules, winners and losers in the battle between government and marketplace. Yergin was online Wednesday, May 21 at 3 p.m. ET, to discuss the series, his book and globalization. Yergin is an authority on energy policy and international politics and economics. Yergin received the Pulitzer Prize for General Nonfiction for his work "The Prize: The Epic Quest for Oil, Money and Power," which became a national best seller and was made into an eight-hour PBS/BBC series and translated into 12 languages. Yergin is a Brookings Institution Trustee and a member of the Committee on Studies of the Council on Foreign Relations. He is a member of the Secretary of Energy's Advisory Board. He is also a member of the Board of the United States Energy Association and of the National Petroleum Council, and serves on the NPC Co-chairs' Coordinating Committee. He is a Director of the U.S.-Russian Business Council. "Commanding Heights" airs on PBS beginning May 15, 2003 -- and continues on May 22, 29, June 5, 12, and 19. (check local listings). The transcript follows. Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.
Silver Spring, Md.: Could you please define "globalization?" People seem to mean VERY different things when they use this word. Thank so much! Daniel Yergin: That's a very good question. The term is used to mean so many different things. The simple answer is that it means a much more interconnected world -- particularly in terms of trade, investment, flows of money. -- and people. But in a broader sense it's also all the interconnections of communications, news, ideas, culture. It's teams of people working across time zones in different countries. It helps to bring this abstract concept down to earth. It's the difference between Americans making 200 million overseas phone calls in 1980 and 5.2 billion in 1999! It's the fact that chicken tikka is now said to the number one fast food in England!
Alexandria, Va.: I so enjoyed reading "The Prize." In what ways, if any, has the situation changed in the oil world since you wrote it. Daniel Yergin: Thank you for your comment on The Prize. I hope you will enjoy Commanding Heights, too.
Much has changed. When I was finishing The Prize, I tried to think of the the most important things that could change (this is 1990) -- and I came up with three -- Saddam Hussein, Russia opening up, and the environment. On Iraq today, I think that it will take Iraq longer to substantially increase its production than many people think. Russia really is transformed, and we're seeing the emergence of Russian "major" oil companies -- and now a "supermajor." That points to another change -- the rise of the "superpowers" -- consolidation and mergers in the industry -- giving bigger scale for bigger projects. And the environmental agenda has become a much more important factor in so many ways for the world oil business. Sometimes I think it's time to write a new volume!
Cambridge, Mass.: What is the most important benefit of globalization to the people of the world, to date? Daniel Yergin: I think the most important benefit is in terms of economic growth and higher standards of living -- the benefits that come to countries from being part of the international economy. The most dramatic story in that regard is Asia, the poorest continent in the world today. When you see the footage of Singapore in Commanding Heights and hear Lee Kuan Yew talk about the changes, you realize that Singapore now on a per person basis has a higher standard of living than Britain -- which had 200 year head start! And in Commanding Heights -- not the episode on this Thursday night, but one of the ones in June -- there is this extraordinary story of an incredibly poor teacher in China who finds a job working in a highly-computerized bicycle factory in China, and you see what that means in terms of higher standard of living in a very human and moving terms. I think one of the basic lessons I carry away from the three years we spent on Commanding Heights is simply the power of trade to reduce poverty.
Arlington Heights, Ill.: Does Globalization grossly favor managers and executives of companies involved in globalization at the expense of the ordinary worker? Another way to look at it is to ask why the gap between the rich and the poor growing the more that globalization becomes pervasive? Thanks for any insights. Daniel Yergin: I think my previous answer tried to grapple with your question. In the 1990s, the United States created about 18 million new jobs. An expanding world economy and the doubling of our international trade was one of the prime motors for that job creation.
On income distribution, part of the problem has been that some areas like Africa have gone backwards in per capita income, and there are particular questions about Latin America. But something like 300 million people or more have been lifted out of poverty in China alone by China's opening up and engagement with the world economy.
I think what we do need to worry about is how well globalization works -- does it deliver on its promise. And this is a tougher era. This is the question we struggle with in the final episode of Commanding Heights. In the 1990s, world trade grew at about 6 percent a year. Currently, it is at a much lower rate.
Washington, D.C.: Mr. Yergin, so often, international political differences, like over policy in Iraq, seem to carry over into economic policy. Economically speaking, how severe a fallout could we see from the rift between the U.S. and Europe over ousting Saddam Hussein by force? Daniel Yergin: I find myself very concerned by the rift you describe and the risk that, as you point out, it will extend beyond Iraq. Just today, I was hearing how the antipathy that has entered the U.S.-Russian relationship because of Iraq is hampering cooperation on other questions that are important to both countries and have nothing to do with Iraq. The same goes for what is called "Old Europe." I think that there is a greater gulf of misunderstanding -- and lack of understanding -- and it can undermine the kind of collaborative relationships that are necessary to deal with the broad range of international questions -- including,as you say, the economic ones. This upcoming heads of state meeting in Evian, France, will be a very important test.
Lansing, Mich.: Mr. Yergin,
"The Commanding Heights" video was well done, educational and certainly fair and well balanced. Yet after it was originally aired on PBS there was a relentless attack by the left that it (basically you and your coauthor, Joseph Stanislaw) was a shill piece for corporate America. What have your experiences been with the public-at-large regarding this piece? Daniel Yergin: Thank you for your comments about the series. It was a big challenge to do it. I'm only aware of some of the attack. You have clearly seen more of them.
In general, we got fantastic reviews for the series across the spectrum. I think people were amazed to see, as people said to me, a show that with that historical sweep and substance that was also surprisingly cinematicin its feel.
We worked really hard to be balanced. At the end of the day, we were telling the story of how the world changed its mind, and it's simply true. Look at what Tony Blair and Bill Clinton represent for their respective parties. The collapse of communism -- and the poverty that it left behind -- has had a strong effect. Of course, there does seem to be a pendulum that swings back. There's a renewed question about corporate governance and about how financial markets work. But it's also inevitable that people who basically don't like the idea of a market economy -- which after all is how our country works -- would not like the show. Just not sure what they would like to replace it with!
Some of the most wonderful reactions has been from parents telling me how they sat down and watched either the show -- or, in some cases, the whole six hours on a DVD over the weekend. So I'm more aware of the positive reaction and the role that the series - and the PBS Web site is having in education.
Glenelg, Md.: I have to say that the "Commanding Heights" PBS production is the best way I know to introduce college students to globalization issues and commend you on the job you did. I especially like the fact that it shows all sides and that it does a superb job of showing how we got to where we are today. As an economics instructor I feel that with textbooks it is difficult to excite students about economic issues. In this regard your production is excellent. Daniel Yergin: Thank you for your comment. I wanted to skip ahead to it because I think you answer more effectively than I could the "problem" and concern presented by the previous question!
I hope that the lasting impact will be in the classroom and in providing a context for students doing economics, as well as history.
West Palm Beach, Fla.: I too thoroughly enjoyed "The Prize." In fact, what I learned from it helped me through many water cooler debates about the recent Iraq War... it was more about oil than many wanted to believe. So, was I wrong? Daniel Yergin: The way I see it is that the First Gulf War was much more directly about oil -- invading Kuwait was Saddam' second attempt to get control over the Persian Gulf (the first being the invasion of Iran in 1990).
Maybe future historians will all see this as one war. But this second one was very much driven by the question of weapons of mass destruction. That was foremost. I don't think Iraq "solves" the question of oil dependence by any means. In terms of the oil dimension, it was about the stability and security of the Gulf, which provides almost 30 percent of world oil (Iraq was providing just 3 percent) and whether an Iraq armed with weapons of mass destruction would have been in a position to assert dominance over all or a substantial part of the region. Saddam himself is reputed to have regretted that he had invaded Kuwait in 1990 instead of waiting another year or two until he had nuclear weapons!
By the way, West Palm is one of the PBS stations that is showing Commanding Heights currently on Thursday nights. Others are showing it on Friday nights.
New York, N.Y.: When talking of globalization one thing does come into mind is about job movement. For instance jobs moving out of U.S. to India/China/Philippines or other places where labor is cheap. Can you comment on that. Daniel Yergin: What happens to jobs with a more open trading world is one of the most important and sensitive questions. If we import our bicycles from China instead of building them in Ohio, those are jobs lost. Yet at the same time, other jobs -- and more jobs -- are created by a growing world economy. I go back to the 18 million jobs created in the United States in the 1990s! It is very important to have the "adjustment programs" for workers who are hurt by trade. But we also need to remember the jobs that are created,although they may be less visible, and also the lower prices that give people more opportunity. Lawrence Summers, who was Bill Clinton's last Secretary of the Treasury, is very eloquent on this subject in Commanding Heights. I think "trade" is actually one of the hardest concepts -- that the benefits flow in two ways. We do have a wonderfully interesting scene in Commanding Heights of a call center in India -- which may be the very one you are calling into when you call to check on your credit card balance and think you're talking to Omaha -- but it's Bangalore!
Chicago, Ill.: Your show talked about how China has become far more open economically, and how it has benefited greatly from that. At the same time, their society has remained quite suppressed (few freedoms of press, association, etc.) How do you see those forces intersecting in the future -- will the benefits of economic openness outweigh the concerns of the state? Will the state become more open? Or do you feel it's possible to continue the economic reforms without a more open society? Daniel Yergin: A growing middle class, more travel,more communication, an ever-growing stake in the world economy -- the amazingly large number of Chinese students who have studied in the United States -- all this will lead (and is leading) to a more open Chinese society. Think how different it was 10 years ago. And, having been in the-then Soviet Union at the time of Chernobyl in 1986, I have no doubt that SARS will accelerate changes in the Chinese political system.
As China engages further with the world economy, as it adjusts to membership in the World Trade Organization, it will require more of the rule of law, which will also facilitate these changes. But how these changes will come about -- how the transition will be handled -- those are the great questions ahead. And the answers will be felt not only in China but around the world.
Denver, Colo.: Is there any reason to be concerned about the welfare of global capital markets? More than with just normal exchange rate fluctuations, it sometimes seems that the financial markets rely an awfully lot on an implicit faith in the markets themselves. How sound is the current situation, do you feel? Daniel Yergin: One of the most dramatic parts of Commanding Heights -- although you will have to see it to believe it -- is the story of the Asian financial crisis at the end of the 1990s that hit the rest of the world -- and was a close call for our own financial markets. Closer than most any of us knew at the time. The reason I mention it is that it goes to the question that concerns you.
Certainly confidence has ebbed in financial markets. What was thought to be a bull market that could only go in one direction was a vast speculative bubble. It's a little eerie if you watch the sections in Commanding Heights on the 1920s and 1930s -- including the radio boom -- and then the collapse and the creation of the SEC. Certain degree of echo! The weakness in the global economy today is evident, and "deflation" as a concern has been tip-toeing in from the wings. I hope that the United States is working its way through the post-boom bust and that we will start to see increased investment over the next year. That will do a lot to allay concerns. The Europeans, particularly the Germans, seem unable to do much to breathe some dynamism back into their economies. It seems to me that we have gotten through -- based on what is known today -- the worst part of the corporate governance crisis, and that will be important for the confidence that is one of the fundaments on which a market system rests.
I fear that we may soon be runnin out of time, and if so I apologize to everyone for the provocative set of questions that we didnt' get to!
Automatically Update Page | Get New Responses | Submit Question
© Copyright 2002 The Washington Post Company | 
