Battle of the Ideas: A review of economic concepts
Professor David W. Hannum
October 9th, 2012
Commanding Heights: Battle of Ideas
The neoclassical counterrevolution was a response to the interventionist dependence revolution of the 1970’s which has diagnosed the problem of underdevelopment to be due to the predatory behavior of the developed world. The neoliberal school of thought redefined underdevelopment instead to be a result of poor allocation of resources brought about by the distortionary price controls and regulations used as tools of state intervention. It posited that too much state involvement in the economy is at the root of slow economic growth. The fundamental assumption in this perspective is that an unregulated market performs better than one with government regulation. It is convinced that although markets also run the risk of failing; market failure is much less costly than government failure.
Where the dependency theorists advocated the reform in the international economic system, the counterrevolution thinkers insist that the speedy solution is the promotion of free markets that are supported by permissive governments that allow the market to perform its self-regulating functions. The prescription of the neoliberals to stimulate economic growth include not only the promotion of competitive free markets but also the privatization of state-owned enterprises, the promotion of free trade, the expansion of trade through advancement in exports and the well reception of investors, and the elimination of government regulations on prices.
Commanding Heights: Battle of Ideas puts together the arguments of the neoliberal school of thought as it emerged and influenced economic policy in the 20th century. The documentary particularly contrasted neoclassical counterrevolution approach to the structurialist-interventionist modes that depicted socialist struggles in the...
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