Educational Media Reviews Online

Breaking from the usual analysis of economic systems, Capitalism offers a fresh perspective of the events and ideas that set the stage for free markets. Carefully researched and comprehensive, this six-part series confronts enduring questions that surround the nature and effectiveness of capitalism. Was the capitalist system created by philosophical ideas? Are free markets truly free? Are contracts between equals the typical financial activity in society?

Episode One – Adam Smith: The Birth of the Free Market – This episode explains early efforts to use scientific principles to describe the economy. These “physiocrats” likened economic activities to the body’s circulatory system. What they missed, according to the filmmakers, was that historical processes, not philosophical ideas, created capitalism. Most pivotal in capitalism’s development was the discovery of the Americas, because private companies financed exploration efforts.

Episode Two – The Wealth of Nations: A New Gospel? – Part two revisits and digs deeper into the ideas of Adam Smith. Historically, analysts believed the economy was a constant size. Therefore, a gain for one actor was a loss for another. Adam Smith’s Wealth of Nations presented a different viewpoint, arguing that economic expansion could occur with division of labor. What modern-day economists often overlook, however, is Smith’s earlier work, The Theory of Moral Sentiments. Here, Smith recognized some of the downsides of the division of labor and expressed concern about the relationship between workers and machines.

Episode Three – Ricardo and Malthus: Did You Say Freedom? – In episode three, the film assesses David Ricardo’s contention that economic growth would occur if global actors would liberate the market. One of Ricardo’s most influential ideas was the Theory of Comparative Advantage, which says that nations should focus on what they can best produce. As a result, consumers benefit from products that are higher in quality and lower in price. The filmmakers, however, contend that the realities of a modern global economy undermine this model of international trade. For example, if a crop is subsidized by the U.S. government, farmers in developing countries cannot compete with the lower prices brought about by this arrangement. Ultimately, many countries that were once self-sufficient cannot produce enough food to feed their populations.

Episode Four – What if Marx Was Right? – Part four reflects on what we can learn from Marx and his critique of capitalism. Many of Marx’s observations and descriptions of capitalism remain relevant to our current economic dilemmas. Marx observed that the accumulation of capital is always associated with the accumulation of debt. The European Union’s debt crisis with Greece, Spain, and other members illustrates this principle. In addition, Marx’s understanding that labor is a commodity in capitalist societies continues to be relevant to our current economic debate.

Episode Five – Keynes v. Hayek: A Fake Debate? – Episode five explores the proper role of government when severe economic problems arise. The Great Depression of the 1930s was a prime test. John Maynard Keynes contended that when unemployment is high and aggregate demand declines, government should increase public expenditures. Public spending should increase even when this leads to deficits. Friedrich Hayek argued that regulation and government action would lead us to serfdom. During the immediate post World War II period, it seemed that Keynes’ arguments were the accepted governmental approach. However, by the 1980s, economists led by Milton Friedman argued that government was “wasteful” and “inefficient.” These concerns encouraged decision makers to reduce the role of government in the economy. The major approach was deregulation, reducing the amount of public oversight and rules in the economic sphere.

Episode Six – Karl Polanyi: The Human Factor – Part six discusses Karl Polanyi’s ideas on the connections between economies and culture. The post-World War II period raised numerous economic questions and fears. Analysts were concerned about the possible reoccurrence of an economic depression. In addition, what steps could be taken to assist the economies in the developing world? Scholars also raised concerns about inequality between countries and within the same state. A driving force behind the role of inequality was the changing nature of debt. Ancient societies based their actions on societal norms, not on the market. Almost all debts were owed to the government or the palace. This allowed the society to periodically forgive all debts. However, as the economic system moved to a market structure, debts were owed to private creditors. This structure made it more difficult to restore property and production capabilities. Moreover, the market system converted labor, money, and land into commodities. Polanyi argues this ignores the “human factor” within the underlying economic activities.

Highly recommended for academic and public libraries, Capitalism is an essential resource for courses in business, economics, history, and political science. Each episode is under one hour, making them convenient for classroom viewing.