Commanding Heights: The Battle for the World Economy (Part 1)

Commanding Heights: The Battle for the World Economy (Part 1)

Posted On: January 29, 2012
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The social and economic catastrophe left in the ashes of World War I ignited an intellectual and political struggle that would last most of the 20th century — a battle between the powers of government and the forces of the marketplace over who would control the economies of the world’s great nations.

“The Battle of Ideas” tells the story of how, for half a century, the world moved toward more government control — from the centrally planned economies of the communist world to the “mixed economies” of Europe and the developing world to the United States’ regulated capitalism — and then began to move away.

The ideas of two economists lay at the center of that struggle: John Maynard Keynes, the elegant Englishman who advocated government intervention to control the booms and busts of capitalist economies, and Friedrich von Hayek, the Austrian emmigrant who argued that government intervention in the economy would erode human freedom and was doomed to failure.

In western democracies, Keynes’s ideas would dominate for decades, until the economic crises of the 1970s forced political leaders to look for new ideas, and rediscover Von Hayek’s theories. In the 1980s, the simultaneous emergence of the conservative governments of Margaret Thatcher and Ronald Reagan, who both embraced Hayek’s free-market ideas, set the stage for a worldwide capitalist revolution.