In the video “ The Commanding Heights”, episode 1 shows the world with a global economy that is then crippled by World War 1. Following World War 1 two young economists by the name of John Meynard Keynes and Friederich Hayek commence to solve the economic difficulties the world was currently situated in. Each economist had a different vision about the approach the world should therefore take to resolve the world’s economic dilemmas.

John Meynard Keynes who first suggested the argument that the economy should be a government controlled. Keynes contemplated the idea that in an event of economic despair the government should allocate their economic resources and go into a state of paucity in order to restore the economy back to normal, “ Keynes felt that the market economy would go to excesses, and when things were in difficulty the market wouldn’t work. Therefore the government had to step in”, (Chapter 2, The Old Order Fails). Therefore, when the economy began to amplify and become stable, a surplus would arise. A profuse amount of people and governments supported this principle. The President of the United States, Franklin Roosevelt when establishing his New Deal, used Keynes theory during the Great Depression. He constituted new government agencies to put the unemployed citizens back to work, “Keynes’s solution to unemployment was for the government to spend its money to restore and maintain full employment”, (Chapter 5, Global Depression).

Hayek alternatively believed that for an economy to endure capitalism it must be allowed the constant fluctuations. “Hayek felt that the market would eventually take care of itself”, (Chapter 2, The Old Order Fails). He conceived the idea that while at times of ample unemployment, the government should not insinuate additional regulations because it would advance to a market lead by the government dominion and would collapse the overall economy, “Friedrich Von Hayek thought government interference in the economy was a threat to freedom”, (Chapter 2, The Old Order Fails).

By the end of the movie the push to elect Prime Minister, Margret Thatcher and the president of the United States of America, Ronald Reagan, the economy had averted from a government to market economy, from Keynes theory to Hayek’s. The idea of free markets of private ownerships with limited government contributions was coming into development of economic regulations and operations. This is because with multitudinous regulations by the government, it will lead to a gradual decline, which will induce job termination, cause prices to rise which will cause the economy to stager to a halt. If there are no government influences contributed then everyone will operate in his or her own personal pursuits and there will be to many negative externalities and the market will advance in a state catastrophic measures. “ Part of what happened is a capitalist revolution at the end of the 20th century. The market economy, the capitalist system, became the only model for the vast majority of the world”, (Chapter 18, The Heights Go Up For Sale).

The argument that I found more compelling was the argument of Hayek in terms of having a free market that had little government control. At the beginning of the documentary I perceived that Keynes idea was the key to controlling the economy and preventing and abolishing recessions when they occurred. But later realized that his idea was had some flaws within. Such as the World War 2 got the country out of the depression but as soon as the world war was over the country resulted into depression again and many people became unemployed. By this time the government would be in deficit and with people out of work they would have no money to pay taxes so the government would remain in debt, which therefore the country would remain in a recession. That is why I believe that Hayek argument was more compelling. In his idea that the markets do not need to be planned but will run there course. With private owners they can change the price, supply and demand to what will benefit the company so that they may continue to operate, and continue to provide jobs.