“Battle of Ideas” The Battle of Ideas starts in 1914 showing a world with a global economy that is then torn apart by World War I. This created the economic development, world trade, and globalization all the way up to the 1980’s. The documentary explains how the world first moved toward more government control and then began to move away for most of the 20th century. During this time two young economists emerge in hope to solve the world’s economic troubles, John Meynard Keynes and Friederich Von Hayek. The story then focuses on the struggles that occur between the ideas of the two economists. Keynes, whose ideas on government intervention dominated much of the 20th century, and Hayek, whose free-market ideas were largely ignored
Through most of the twentieth century Friederich Von Hayek was on the losing side of the battle of ideas mostly because he was against macroeconomics and any government intervention. Hayek’s free market theory emphasizes that less government intervention meant more economic freedom. He stated that when people are free to choose, the economy runs more efficiently. In a totally free market if demand is greater than supply the prices increase, therefore leading to the increased profits and eventually the increase in production. Hayek believed that too much government planning meant too much government power which destroyed freedom creating slaves.
Over the past century the debate continues and it’s constantly being brought up whether we should have a government based on state planning or we should base it on prices. In the Western world people believe Keynes ideas were better off because people continued to argue that without help from the government the economy would fall apart whereas Hayek preferred the style in which you just let it be and the economy shall fix itself with time. After viewing the film and further researching on these two major economic ideas, I found myself favoring the ideas and theory of Hayek. Both economists have made great contribution to the economic development. However, I feel that a free market should be the way the economy is based off of. The problem with free market in today’s society is that Americans have been catered