Carlos De La Cruz

UNIV 2002-51
Global Issues
Prof. Okafor
March 10, 2017

Commanding Heights

The world before World War 1 was mostly capitalistic, means the government would not

interfere with business policies and regulate companies’ prices. This system felt the natural way

to go in order to promote trade. After World War 1, most countries like Russia where left poor

and socialism to over in the form of communism where government would set the rules for

business and corporations. That was when a battle of ideas took place to see which was the

better economic system capitalism, or socialism. Both of these ideas where represented by two

economists Friedrich Hayek and John Maynard Keynes, who were rivals. Keynes supported

socialism and Hayek supported capitalism. During the great depression the world seemed to like

Keynes ideas and it was his ideas that pulled the US out of the great depression during World

War II. While I was watching the video, I was shocked when Keynes ideas began to fail during

the 70’s when stagflation happened in the U.S. The world seemed to turn to Hayek ideas, I

thought this would be a bad idea until I saw that it led to the global market system that we have

today. This also led to globalization which meant a free market trade global economy which led

to the development of NAFTA, the North America Free Trade Agreement. Hayek Ideas of free

trade is succeeded for the rich and developed countries as it stopped stagflation. They were still

issues in the poor countries because there where not a lot of opportunities for them to get into the

global market due to poor people not having legal paper work to legalize their trade . The United
Nations still has to create a far trading system for those under developed countries that are still

not benefiting from free trade.