In that part, it was more focused on the battle of ideas between John Maynard Keynes and Friedrich von Hayek, two of the most well-known economists of their time. Keynes could see the faults of free market in the time after the war and that all of those errors could be fixed if the government regulated the economy. However, Hayek thought that the free market would fix itself, with no government control. World War I laid a whole continent to waste and drew attention to the problems of political organization. People were looking for something better during this time and that something came in the form of socialism and communism.
Western civilization was fascinated by this idea and started owning or regulating the so-called ‘commanding heights’ of the economy. During the period between two World Wars, the world experienced the collapse of capitalism and each part of the world tried to manage through by adopting either socialism or communism. Socialism promised a more just society, Hayek was more concerned for the poor and equity. He believed that people needed to be free from government interference and that markets work and governments don’t. His ideas were based on a fully functioning function free market system without regulations, which were also the ideas of Ludwig Von Mises. Mises was a libertarian who believed that markets always needed to be free from government meddling and he argued that socialist states cannot be successful because they lack a functioning price system to send the signals to consumers and producers. Therefore, after World War II, Keynesian view became a widespread view in the world economy. American cities boomed in the 1920s, with people spending tons of money, partying, and buying the most expensive items they could get their hands on. Stock and the New York Stock Exchange became somewhat of a national pastime, where stocks just continued to boom. However, on Black Thursday, stocks prices plunged and the downward spiral could not be stopped. During the 30s, values and prices spiraled downward and left people with no ability to earn, repay, spend, or consume. The banks also went down with it and people tried to rush to withdraw all of their savings. Millions of people lost everything and the government could not do anything about it, but instead made it worse. There was extremely high unemployment. Keynes was the real inventor of macroeconomics during these time period, as well as GDP, rate of inflation, and many other things. When Roosevelt came into office, he had to face the debt and his confidence rallied the whole nation, along with the New Deal. He created new agencies to regulate banks and the stock markets. Under the New Deal, industry came under many new rules and regulations. Keynes ideas began to gain ground during this time and World War II is what it took for his theories to become government policies. As the war began, high unemployment ended and the depression was gone, which was a demonstration of Keynesian ideas.
Commanding heights derives from Lenin’s speech, who appealed to those who criticize his amendments regarding the Marxist economics, that as long as the government owns the major industries such as oil, finance, and steel, it is okay to let individuals have some of their properties. The Keynesian idea states that the government must have control over the commanding heights and that what many nations have done since the end of the war. Whether a socialist, communist or capitalist, everyone started to believe that more regulation meant better economic outcome.

Economics is the study of choices when there is scarcity, in the video it shows how scarcity affected the status of people through out the first half of the twentieth century. It shows the impact of the economical system toward prosperity, or depression. The video shows how the factors of production can be used and the outcome that comes from using it through the right economical system. I also saw how Keynes ideas building macroeconomics and helping Roosevelt to over come the Great depression. And how a little inflation is not necessary a bad thing. In the video through out occasions it shows some principle like The Principle of Voluntary Exchange which shows that the market is an institution or arrangement that enables people to exchange goods and services and how they are better off. It shows hyperinflations, and how that affects the real value of the money which shows the Real-Nominal Principle when the hyper inflation hits and people needs baskets full of money to buy simple goods. After watching the video, I came to a more understanding that The root causes of these agonies would have to be greed, power, and money. Each country wants to be on top and in charge, so they will do anything they can to gain these powers. Nations allow corporations to take big risks and if these risk fail, they try to cover them up for as long as possible, ultimately hurting their nation.