The Commanding Heights: Battle of Ideas

                                         

      For a long time now, our economy has been shaped and modified, based on the ideas of various public intellectuals-“intellectual heroes”, these people have been very influential in various country’s policies, a lot of them have been involved in debates and battles-which is inevitable, because human beings do not think the same way, hence; they have different views and ideas on things. 

      A major subject that has attracted a lot of idealist has been the issue of the World Economy. There has been a battle over the world economy for so long, which has resulted to bubbles and bust of the economy of different countries; a lot of countries have faced the problem of hyper-inflation, recession, etc.

     Two of the great economists of the twenty century were John Maynard Keyes and Friedrich August Hayek. They were friends, but intellectual rivals. Keynes helped allied governments to defend freedom by planning their wartime economics, his ideas affected the theory and practice of modern macro-economics. He advocated the use of fiscal and monetary measures to mitigate the adverse effects of economic recessions and depression. He believed that the market economics will go into excesses, so government can step in. On the other hand, Hayek thought that government interference in the economy was threat to freedom.

      Keynes went to Cambridge, and he was well-known in London for making a fortune in the stock market; lost it all, and then made it back. He advised the British government on how to organize its war economy. He later joined the British Peace Relegation in France at the end of WW1. In 1936, he showed governments how to manage economies to spend more in good economy and cut spending on bad economy. He helped to create the World Bank and the IMF.   Hayek joined the Libertarians, who believe that people needed to be free from government interventions; they believed that markets work, but the governments do not. He believed that central planning was the first step to a totalitarian state.

      Winston Churchill was opposed to government planning and later one-third of the world adopted Socialism, while others adopted Capitalism; this resulted into the Cold War. The war made the German economy to disintegrate, their currency became worthless. India also became an independent nation, and it had a good economy, which became a model for new independent nations.

       Some of the world leaders that were affected by these ideas were Richard Nixon, who was the President of the United States, during the 1971 inflation and Britain was also facing unemployment and inflation. He was a Keynesian. Another person was Margaret Thatcher, who attended oxford and had been deeply influenced after reading Hayek’s book, she later became Prime minister of Britain. Her government invented Privatization, it put the commanding heights of the British economy up for sale and two-third of state industries was sold to become private sectors. Jimmy Carter tried to follow Keynes formula, but it did not work. Ronald Reagan used Hayek’s theories and inflation was gone in 1982. His tax cuts led to huge deficits, but it later started to grow again.

     In conclusion, the battle of ideas has helped to shaped the modern economy, and helped to put in place, various policies, but in this time that the world is facing a different type of recession, this ideas have not in any way help to solve the problem at hand. It will take the ideas of a new set of idealist to end this recession.