Commanding Heights - The Battle for the World Economy - Essay Example

I agree with Keynes that during the time after World Wars and the Depression as many folks were in desperate poverty and had to unite to build nations.  However, am in disagreement with Keynes when he states that the disadvantage of the free market is the extremism, which he stated could be countered by government interventions. However, these interventions are orthodox considering how US President Nixon compromised when he introduced wage and price control leading to the collapse and deterioration of the economy. This is also one of the reasons why Payeks argued that a centrally planned economy would give governments much power leading to totalitarianism which is detrimental to the economy (tanmovie1234's channel).

The socialist system has the benefit of ensuring the poor a decent life through fair and equitable sharing of resources among the people, but, on the other hand, the free market brings about opportunities through which they can increase their living standards. However, irrespective of Payne's idea of the free market, there is a need for the government to control the industries and businesses because, in the case of monopolies, they should be monitored to avoid exploitation. Moreover, in a competitive economy facilitated by the free market, there may bring about unhealthy competition which will be at the peril of the consumers or citizens.  I am in agreement with Van Misses who was in support of the free market and argued that the socialist economy lacked the price system that governed the demand and supply that dictates the prices of commodities, which led to chaos and ultimately economic crisis.

Irrespective of these arguments for or against both socialism and free market systems, I have come to learn that history repeats itself irrespective of the system implemented. This is considering the 2008 economic crisis and stock market collapse similar to that of October 24, 1929. Therefore, every economic system has its advantages and disadvantages, thus, world economies should not be attached to any of these systems. In addition, we have been fighting the same problems of high rates of unemployment and inflation despite the economic strategies employed, and whichever politicians we elect.

Consequently, I believe that both socialism and free market economic strategies are required to form a strong and balanced economy, as they complement one another in forming a prosperous economy. In conclusion, I believe that Payek's free market economic system is beneficial in encouraging productivity in an economy; however, the government should always control the commanding heights of the economy. This will ensure equitable resource allocation, monetary stability, regulation of lending practices, and encouragement of entrepreneurial activity.  

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