here for a list of vocabulary from this part of the film.
The Commanding Heights (Part 1): The Battle of Ideas (Chapters
Chapter 13: A Mixed Economy Flounders
Onscreen title: London, 1973
NARRATOR: Britain's mixed economy, so
widely imitated, was in similar trouble. It, too, was facing the deadly
combination of unemployment and inflation. In theory, the Conservative prime
minister Ted Heath and his Cabinet believed in markets. In practice, like Nixon,
they made a sharp U-turn and used wage and price controls to combat
KENNETH BAKER, Conservative Minister, 1981-1992: I was a junior minister in Ted
Heath's government, and I remember having to attend meetings with three or four
other ministers where we would actually decide the level of charges plumbers
would charge next week to repair taps and how much taxi drivers could charge for
fares and how much hairdressers should get in wages. It was absolutely
unbelievable. It all came to a very sticky end, a complete collapse.
NARRATOR: A coal miners' strike and an oil crisis plunged the country into
darkness. Voters blamed Ted Heath and voted the Conservatives out of office.
SHOP MANAGER: Well, we're virtually out of business while the power's off. We've
got no sets that we can operate at all.
DAVID YOUNG, Conservative Minister, 1984-1989: We were the sick man of Europe, and the English disease was the disease of strikes,
which we had all over the place. And you know, it was so bad that Herman Kahn of
the Hudson Institute wrote a book called The Year 2000, and he saw many
things, but the one thing he did see was that the lowest standard of living in
in the year 2000 would
be shared between
NARRATOR: A minister in the defeated government, Keith Joseph may have been an
unworldly intellectual, but his search for fresh answers would change the way
but the world thought
about economics and society.
KENNETH BAKER: Keith wore a hair shirt, he beat his breast, and said we
were to blame; we've got it wrong. And he did beat his breast. He was called a
KEITH JOSEPH (interviewed in 1975): I thought I was a Conservative. I thought I
was a Conservative, but all the time I was in favor of... I was in favor of
shortcuts to Utopia. I was in favor of the government doing things, because I
was so impatient for good things to be done.
KENNETH BAKER: And when he appeared on television, he had a vein in his head
which kept throbbing, and people said, "Oh, you know, this is a very
strange figure indeed, this man." But nonetheless, he started to rethink
the Conservative policy.
NARRATOR: Keith Joseph's search brought him here, where, with Hayek's
encouragement, a group of kindred spirits had set up a think tank called the
RALPH HARRIS: The institute started in 1957, you could say the direct result of
the Mont Pelerin Society, of The Road to Serfdom, of Hayek's ideas of
freedom and competitive enterprise.
NARRATOR: With the zeal of a convert, Joseph began to preach the virtues
of free markets. In a series of pamphlets, he went on the intellectual
offensive, attacking the mixed economy, making the case for capitalism.
Mark Garnett is a biographer of Keith Joseph.
MARK GARNETT, Biographer of Keith Joseph: From the middle of 1974 Joseph undertakes
a crusade to convert the country to his way of thinking, and what he wants
to do is take the battle to the heart of the enemy camp, and he believed
that the universities were infected with socialist thinking.
KEITH JOSEPH: Because there was a free society in this country....
CECIL PARKINSON, Conservative Minister, 1981-1983, 1987-1989: And he was going
right into the lions' den, arguing a case that many people had never
MARK GARNETT: Joseph felt that it was his duty to fight back on behalf of the
NARRATOR: To revive the economy, Joseph preached that Britain
risk-taking, which meant more bankrupts and more millionaires, and less
CECIL PARKINSON: The audience would sort of gasp. They'd never heard anybody
challenging the consensus.
KEITH JOSEPH: Mild inflation seemed a painless way of maintaining full
employment, encouraging growth, and expanding the social services. So the result
is that we're now more socialist in many ways than any other developed country
outside the Communist bloc.
RALPH HARRIS: He used to be smuggled in the back door. He was genuinely hurt
that the students had reacted to this penetrating argument by chucking flour
bombs at him.
MARK GARNETT: It was almost a badge of honor that he would come away from these
meetings with egg yolk running down his suit.
NARRATOR: Keith Joseph's most significant adherent was an up-and-coming
Conservative politician named Margaret Thatcher. In Parliament and politics,
Thatcher's closest friends agree that Keith Joseph's influence on her was
: She relied on him to
give her deep intellectual support. There's nothing wrong with intuition.
Intuition is reason in a hurry, and Keith just supported and reinforced her
intuition. At the very moment, she needed that support.
NARRATOR: Margaret Thatcher had a gut instinct for market economics. Her
father had been a grocer, and when she was a girl, she had helped him in the
shop. Hardworking and studious, she won a place at
, where she became
interested in student politics.
While she was at
, she read Hayek's Road to Serfdom. It made a lasting impression on
her. Years later, when she became the first woman to lead the Conservative
Party, she once slammed Hayek's book down on a table and announced, "This
is what we believe."
RALPH HARRIS: (laughs) Thatcher's office came on and said could she come and
drop in to see him. And so she called by, and there was a period of unaccustomed
silence from Margaret Thatcher as she sat there, intense, attending to the
NARRATOR: By 1974, Hayek sensed the world beginning to go his way.
FRIEDRICH VON HAYEK (interviewed in 1978): As for the movement of intellectual
opinion is concerned, it is now for the first time in my life moving in the
Onscreen title: Stockholm, 1974
In the battle of ideas, 1974 was a turning point. Hayek's Nobel Prize came as a
surprise, but the balance was now shifting away from Keynes and towards Hayek.
FRIEDRICH VON HAYEK: I like to say when I was a young man, only the very old men
still believed in the free-market system. When I was in my middle ages I myself
and nobody else believed in it. And now I have the pleasure of having lived long
enough to see that the young people again believe in it. And that is a very
Chapter 14: Deregulation Takes Off 
Onscreen title: Chicago, 1974
The U.S. economy was going through the worst downturn since the Great
Depression. Industry slowed. Unemployment rose. The Yom Kippur War was followed
by an Arab oil embargo. Americans waited in gas lines. And the price of
everything kept rising.
economists had always
argued that rigid government regulations were keeping prices high and fueling
inflation. Now more people began to wonder if competition could break the
SAM PELTZMAN: What is the effect of regulating the airlines? What is the effect
of regulating the trucking industry? And what is the effect of regulating the
railroad industry? Very often, it raises prices. Instead of allowing
competition, it suppresses competition.
Onscreen title: Washington, D.C., 1974
In the airline industry, the host of
regulations enacted during the Great Depression were still in force. It was a classic example of regulated capitalism. But
deregulation was in the air.
Stephen Breyer, now a Supreme Court justice, then a Harvard professor, was asked
by liberal Democratic senator Ted Kennedy to head a Senate investigation of airline regulations.
STEPHEN BREYER, U.S. Supreme Court Justice: You discovered that basically the
same firms that had been there in 1938 were still there. Those were the major
carriers and nobody new.
NARRATOR: The hearings began, and officials from the Civil Aeronautics Board
were called to testify.
STEPHEN BREYER: And it turned out that 5 percent of their time went to stop
prices that were too high and 95 percent of their time went to stop prices that
were too low, but always the effort was to keep the price high and not low.
NARRATOR: Naturally, the established airlines were quite happy with this
STEPHEN BREYER: And we'd say, "When was the last time you granted a new
NARRATOR: Regulations meant that major carriers like Pan Am never had to compete
with newcomers. But some cut-price
charter flight operators wanted to break this club. Leading the struggle against
Pan Am over its profitable trans-Atlantic flights was an exuberant Englishman
called Freddie Laker.
FREDDY LAKER: I'm Freddy Laker. I own Laker Airways, and I'm dedicated to
low-cost air travel. With Laker you can fly round trip to the USA
in one of our
wide-bodied DC-10s for less than half the price of a normal economy ticket.
Look, I've got to give you a better deal -- I've got my name on every plane.
STEPHEN BREYER: The Transportation Department said that this may hurt Pan Am.
And Freddy Laker testified and said, "The cause of this whole thing is 'Panamania.'"
So we said, "What is that?" And he said, "Well, everybody should
do everything for Pan Am."
NARRATOR: The man who was to sweep away airline regulations is a lifelong
Gilbert and Sullivan fan. Improbably enough, the bearded poet is played by Fred
Kahn, a professor at
Kahn wanted a leaner, meaner regulatory environment in which the market was free
to chase profits without the dead weight
of bloated government. Democratic
president Jimmy Carter made Kahn head of the Civil Aeronautics Board. Kahn had
spent years studying government regulation; now he had a chance to do something
ALFRED KAHN, Civil Aeronautics Board, 1977-1978: When I got to the Civil
Aeronauts Board, the biggest division under me was the division of enforcement
-- in effect, FBI agents who would go around and seek out secret discounts and
then impose fines. We would
discipline them. It was illegal to compete in price. That means it was illegal
to compete in the discounts you offer travel agents. So we regulated travel
agents' discounts. Internationally, since they couldn't cut rates, they competed
by having more and more sumptuous meals. We actually regulated the size of
NARRATOR: By the time Kahn had finished, the C.A.B. had nothing left to do but
close itself down.
SPOKESMAN FOR THE CIVIL AERONAUTICS BOARD: Competition is the rule, and because
of it, the consumers are better served than ever.
NARRATOR: Airline deregulation led to painful turbulence as new carriers came and went. Like her father, Judith
Hamill works in the airline industry.
JUDITH HAMILL, Administrator, Chicago O'Hare Airport: My dad was a jet mechanic
with Braniff. At the age of 59 he found that his skills were no longer desirable
or needed. When Braniff came back because of the duty to hire, he came back at
half the salary that he had made before. When you live by the rules and then the
rules change, it's sad.
NARRATOR: But 20 years later, the industry was employing two times as many
people to fly almost three times as many passengers.
STEPHEN BREYER: The industry vastly underestimated
the demand for airfares at lower prices, and what's happened is that as the
prices went down, demand went up dramatically.
ALFRED KAHN: And once they were free to compete, you began to get super-saver
fares and super-apex fares and potato fares and peanuts fares -- an explosion of
discounting and competition. Well, those were dramatic.
NARRATOR: The stage was set for deregulation of the
economy, and now these
ideas were about to make their entrance in the very homeland of Gilbert and
Chapter 15: Thatcher Takes the Helm 
Onscreen title: Britain, 1979
Well, 5 percent's no good to nobody, is it?
INTERVIEWER: Do you think you can win this strike?
WORKER: Yes, I do.
NARRATOR: They called it the Winter of Discontent. It seemed as if everyone was
MAN: I think it stinks, like all the
other damn strikes in this country run by the filthy Socialist Communist unions.
NARRATOR: The garbage men were out. So were the ambulances. And if you died, the
gravediggers were out, too.
NARRATOR: With the economy in apparently terminal
decline, the people voted for a new Conservative government headed by
LAURENCE HAYEK : Margaret Thatcher was elected prime minister on the day of my
father's birthday, so he sent her this telegram from
: "Thank you for the best present to my 80th birthday
that anyone could have given me." A few days later she wrote back from
: "Dear Professor Hayek, I am very proud to have
learned so much from you over the past few years. I am determined that we should
succeed. If we do so, your contribution to our ultimate victory will have been
immense. Yours sincerely, Margaret Thatcher."
MARGARET THATCHER: And I'll strive unceasingly to try to fulfill the trust and
confidence that the British people have placed in me and the things in which I
NARRATOR: Determined, and some said
strident, she would revolutionize the economy.
MARGARET THATCHER (interviewed in 1993): The spirit of enterprise had been sat
upon for years by socialism, by too-high taxes, by too-high regulation, by
too-public expenditure. The philosophy was nationalization, centralization,
control, regulation. Now this had to end.
NARRATOR: Thatcher squeezed government spending and cut subsidies to business.
Thousands of bankruptcies and higher unemployment followed. Many saw her as
had rarely been so
CROWD OF PROTESTERS: Maggie, Maggie, Maggie. Out, out, out!
NARRATOR: Thatcher had no time for conventional,
Keynesian economists who urged her to use government money to lessen the pain.
MARGARET THATCHER: Although 364 economists wrote to the Times and said,
"This is outrageous; you'll put us into a deep depression from a
recession," 364 were wrong, and the half dozen who supported us were right.
And those who urge us to relax the squeeze, to spend yet more money
indiscriminately in the belief that we'll help the unemployed and the small
businessman, are not being kind or compassionate or caring. I have only one
thing to say: U-turn if you want to. The lady's not for turning.
battle lines were drawn. In
, the fight was already
Chapter 16: Reagan Rides In 
Onscreen title: USA, 1979
Things were at a low in the
. President Carter
spoke of malaise and loss of confidence in the country. Revolution in
had led to a second
oil shock and Americans held hostage in
. Despite the beginning of deregulation, inflation was still at record
heights. Carter's attempts to follow Keynes's formula and spend his way out of
trouble were going nowhere.
LARRY LINDSEY, Assistant to the President for Economic Policy: Jimmy Carter was
of Keynesian behavior. And it simply was not working.
GEORGE SHULTZ: Toward the end of the Carter administration, with inflation out
of control, Paul Volcker was made chairman of the Federal Reserve. He understood
JIMMY CARTER: I'm grateful to Paul Volcker for being willing now to accept the
oath of office and the responsibilities of the Federal Reserve system of our
NARRATOR: Paul Volcker was steeped in
the ideas of Austrian school economics.
PAUL VOLCKER, Federal Reserve Board, 1979-1987: It's obvious to all of you from
what's been said today that we're face to
face with really unique economic difficulties.
NARRATOR: Volcker believed that inflation was one of the worst of all economic
PAUL VOLCKER: It came to be considered part of Keynesian doctrine that a little
bit of inflation is a good thing. And of course what happens then, you get a
little bit of inflation, then you need a little more, because it peps up the
economy. People get used to it, and it loses its effectiveness. Like an
antibiotic, you need a new one; you need a new one. Well, I certainly thought
that inflation was a dragon that was
eating at our innards, so the need was to slay that dragon.
NARRATOR: Volcker used a blunt weapon: He tightened the money supply. The economy went
into a nosedive. Facing a presidential election, Carter was reluctant to
back such harsh measures.
Carter's rival was the Republican Ronald Reagan. Reagan shared the same economic
philosophy as Margaret Thatcher. For over 20 years, he had been campaigning
against the Keynesian orthodoxy and for Hayek and Friedman's ideas of free
markets and freedom.
NEWT GINGRICH, Speaker, U.S. House of Representatives, 1995-1999: Reagan knew
Hayek personally; he knew Milton Friedman personally. And Reagan was, in a
sense, their popularizer. So he was the person who would take these people who
were very profound but not very easy to communicate. I don't think you'd ever
get Hayek on the Today show, but you could get Reagan explaining the core of
Hayek with better examples and in more understandable language.
RONALD REAGAN, U.S. President, 1981-1989: Vote for me, if you believe in
yourself, if you believe in your right to control your own destiny and plan your
own life, yes, and have a say in the spending of your own money.
The president is going to have more government on the backs of the people and of
business and of industry, the working people, in order to try to solve the
problems that were created by too much government on our backs.
We can get government off our backs,
out of our pockets. This kind of indifference to economic disaster must be
ended, and it'll be ended by having a different kind of leadership.
NARRATOR: The American people voted for change, and Reagan became president.
MILTON FRIEDMAN: The situation was this: The only way you could get the
inflation down was by having monetary contraction. There was no way you could do
that without having a temporary recession.
GEORGE SHULTZ: Obviously, who wants a recession? But I can remember President
Reagan using those famous words: "If not now, when? If not us, who?"
NARRATOR: Reagan offered Volcker his moral
support in the fight against inflation. As Volcker tightened the money
supply, the economy slowed and contracted. Unemployment hit 10 percent. Nobody
had realized quite how tough it would be.
All across the heartland of
, ordinary people were
DARREN SMITH, Farmer: Well, the interest rates, that just eats up your profit.
It becomes very difficult to keep your business running right. Nineteen
eighties, the interest rates were up to 20 percent or better. It was very
interesting times. I remember, you know, cash flows got very tight as things got
tighter and tougher. Creditors forced sales -- you know, "Come up with the
cash or we're going to have to liquidate you." It's a hole that almost
seems impossible that you can get out of.
PAUL VOLCKER: If you had told me in August of 1979 that interest rates, the
prime rate would get to 21.5 percent, I probably would have crawled into a hole.
I would have crawled into a hole and cried, I suppose. But then we lived through
NARRATOR: It had taken three years -- three years of growing public anger, three
years of real hardship for millions of Americans. But by 1982, the dragon of
inflation had been slain.
PAUL VOLCKER: What changed drastically in the 1980s and running through today is
the kind of presumption that inflation is bad. The primary job of a central bank
is to prevent inflation. That's a very different environment than the '50s and
ANNOUNCER: Ladies and gentlemen, the president of the United States
NARRATOR: Reagan and Volcker had set the
on a new economic
RONALD REAGAN: From our very first day, we have been working to undo the
economic wreckage they left behind.
NARRATOR: They called his policy Reaganomics. It had four key elements.
LARRY LINDSEY: The first was the concept of sound money. The second was deregulation.
The third was modest tax rates. And the fourth was limited government spending.
Sounds pretty conventional now, but when Reagan was elected, he was vilified
by his opponents as being some radical extremist.
RONALD REAGAN: They just can't accept that their discredited policies of tax and
tax, spend and spend, are at the root of our current problems.
NARRATOR: Reagan's tax cuts, the biggest in history, led to huge deficits. But
the economy started to grow steadily again.
MILTON FRIEDMAN: There's no doubt in my mind that those actions of Reagan,
lowering tax rates, plus his emphasis on deregulating unleashed the basic
constructive forces of the free market, and from 1983 on, it's been almost
Chapter 17: War in the South Atlantic 
Onscreen title: Atlantic Ocean, 1982
Far away in the
, a British
expeditionary force was at sea. Argentina
had seized the
. Margaret Thatcher
risked a war to make the islands British once again.
Before the war her popularity was at rock
bottom. Victory in the
ensured the survival of Margaret Thatcher's government.
CHARLES POWELL, Thatcher's Foreign Affairs Advisor, 1983-1991: The Falklands
saved her. The
gave her a new lease
on life to implement the policies on which she had embarked which were not yet
producing results. In effect, she gambled all on the
, and she won decisively. And that of course not only
greatly bolstered her standing within
the Tory Party, it bolstered her standing in the country, and it greatly
enhanced her reputation internationally.
NARRATOR: The Falklands War set her up politically to fight the final battle for
the soul of the British economy. The impact would be worldwide.
Chapter 18: The Heights Go Up for Sale 
NARRATOR: In 1945, Attlee's Labor government had
nationalized the commanding heights of the economy, bringing core
industries into state ownership. For Thatcherites, these state industries
were now the primary target.
JOHN REDWOOD, Head of Prime Minister's Policy Unit, 1983-1985: A whole lot of
people who were left of center thought that nationalization was Britain's great
gift to the world, and one of my phrases at the time was that having exported
the disaster of nationalization to the world, Britain should offer them the antidote;
it was the decent thing to do, to say we're very sorry, it didn't work.
MARGARET THATCHER (interviewed in 1993): So the whole efficiency of nationalized
industries was running down. Why should they be efficient? They had access to
the Treasury purse.
NARRATOR: Thatcher wanted to end their dependence on government subsidies and
submit them to the discipline of the marketplace.
JOHN REDWOOD: The nationalized industries fell to pieces. They lost huge sums of
money; they put the prices up massively and still weren't able to make a profit.
They were bleeding the nation dry, the taxpayer dry, and they weren't doing a
good job for their customers.
NARRATOR: The coal mines and the miners' union became Thatcher's biggest
JOSEPH STANISLAW: The coal miners represented the last bastion of the socialist mindset in the
. One of the singularly
most important economic/political events for the world economic system was
Margaret Thatcher's government confrontation with the miners.
MARGARET THATCHER: We were quite clear: Uneconomic
pits must close. You could not go on pouring money into uneconomic pits. It
was taxpayers' money.
CECIL PARKINSON: If you look at our coal industry, the coal is very deep in the
earth; it is hugely expensive to get out.
NARRATOR: Seventy-five percent of
's coal mines were
losing money. It took government subsidies of $3 billion a year to keep them
going. But these statistics were seen as irrelevant by men like Ken Capstick,
one of the radical Socialists who led the miners' union.
KEN CAPSTICK, National Union of Miners: What they would say was that in
, for instance, coal
produced at the pit head was cheaper than coal produced at the pit head here.
NARRATOR: The union leaders argued that the government subsidies were money well
spent if they kept 180,000 miners at work and able to feed their families.
KEN CAPSTICK: Miners used to say -- and I can remember them saying it --
"While ever I've got these I'll always have a job."
NARRATOR: It was a historic grudge match. Both sides knew the miners had brought
down Ted Heath's Conservative government 10 years earlier. The fiery Marxist who
led the National Union of Miners said no mine should be closed until the coal
ARTHUR SCARGILL: Reaffirm the unanimous decision of March the eighth to declare
official in accordance with Rule 41 the strike action.
The issue before our members is very clear. They either accept the policies of
the Coal Board and the government, which will result in the loss of 70,000 jobs,
or alternatively, they stand on their feet like men. They fight -- defend the
jobs, defend their pits, and defend their dignity.
NARRATOR: The strike was an epic clash
of values which symbolized the wider battle of ideas: socialist against
capitalist, free market against state ownership. And it was a question of power:
Illegal mass picketing outside working mines led to violent clashes with the
KEN CAPSTICK: It was the next thing to, you know, to a war. We were faced with
an enemy, and that enemy was out to destroy our livelihoods, out to destroy our
pits, out to destroy our communities and what our communities stood for. Miners
and their families had a set of values that I don't think Margaret Thatcher
could understand, values of socialism and Christianity. The two things went hand
in hand in many ways.
NARRATOR: For more than a year the miners held out, until internal rifts and the
desire of many to return to work brought the walkout to an end.
MARGARET THATCHER (interviewed in 1993): And then suddenly it collapsed, the
strike, and the most powerful union with the most militant leader had failed.
has changed. Today,
less than 3,000 work in the mines.
KEN CAPSTICK: I feel devastated by what I see. Grimethorpe had considerable
reserves of coal when it was closed, plenty of work for those miners to continue
to do to keep their families. You can see the wasteland; you can see the social
deprivation that it caused. The children that are coming along -- no prospects,
no future; people despairing because they can't find employment and the dignity
that employment brings. It's the market forces gone mad.
MARGARET THATCHER: The political consequences of the failure of the strike were
GORDON BROWN, Labor Finance Minister: The coal-mining strike of the early 1980s
was a tragedy for so many of the mining families that were involved in it.
NARRATOR: Perhaps the greatest political impact was on the Labor Party that had
all along opposed Thatcher's free-market policies.
GORDON BROWN: I came into politics as someone who lived in an area which was an
old mining community. The problem for the left in the past was that they equated
the public interest with public ownership and public regulation, and therefore
they assumed that markets were not therefore in the public interest. What we
have had to explain both to ourselves and to the country -- and now I believe
it's possible to explain this to the rest of the world as well -- is that
markets are in the public interest.
DANIEL YERGIN: One of the most important things that the government of Margaret
Thatcher does is invent this thing called privatization; that is, taking these
state-owned companies, these nationalized industries, and selling shares to the
NARRATOR: One by one the Thatcher government put the commanding heights of the
British economy up for sale: electricity, telephones, oil, gas, coal, steel,
trains, and planes -- even water. Before long, two-thirds of the state-owned
industries were removed from government control and sold off into the private
sector. Who should control the commanding heights -- governments or markets --
? That battle was over.
Chapter 19: The Battle Decided? 
JOSEPH STANISLAW: What Margaret Thatcher did in Britain
and the principles
that she introduced were imitated worldwide --
, Latin America
, even in
and to some degree in the Middle East
JEFFREY SACHS: The tide had surely swung. The thinkers that had kept alive the
ideas of markets did play their role at that moment.
NARRATOR: In his lifetime, Hayek saw fascism rise and fall, communism come and
go, and the end of his years in the intellectual wilderness.
NEWT GINGRICH: Here was a man who had intellectually changed the world without
really ever leaving the university. It was the power of his books, the power of
his ideas as then captured by Ronald Reagan and Margaret Thatcher that had
GEORGE SHULTZ: You had in Reagan and Thatcher at the same time two, what I call,
idea politicians. They had ideas they were convinced were the right ideas, and
they put them into effect.
MILTON FRIEDMAN: The coincidence of Thatcher and Reagan having been in office at
the same time was enormously important for the public acceptance worldwide of a
different approach to economic and monetary policy.
SUMMERS: The old
debates were about what the role of the market was, what was the role of the
state. I think it's now generally appreciated that it's the market that
harnesses people's initiative best. And the real focus of progressive thinking
is not how to oppose and suppress
market forces but how to use market forces to achieve progressive objectives.
SAM PELTZMAN: If you look at the whole of the 20th century, there's been a huge
cycle. Less government was the orthodoxy at the beginning of the 20th century,
more government clearly was the orthodoxy for the middle part of the 20th
century, and now the later part, going into the new millennium, we're
back to where we were practically at the start of the century. And you have
to give folks like Hayek, Friedman, and then later Reagan and Thatcher their due
for pushing all of this along.
MARGARET THATCHER: I remember the foreign minister and finance minister from
another country saying to me: "You're the first prime minister who's ever
tried to roll back the frontiers of socialism. We want to know what's going to
happen, because if you succeed, others will follow."
NARRATOR: Within 10 years, governments everywhere would retreat from the
commanding heights of their economies. In the battle of ideas, the pendulum had
swung from government to market, from Keynes to Hayek. Only time would tell what
people would ask of their governments in the event of a new recession, or a
depression, or a war.