Commanding Heights Episode 2 Summary

Topics: Economics, John Maynard Keynes, Minimum wage Pages: 2 (601 words) Published: April 4, 2011
Commanding Heights
Journal #1

The commanding heights documentary episode one was actually quite pleasing. I do enjoy documentaries, and this was one I really had no prior knowledge of. I believe it will help me see a different side of economics. What stood out to me the most in the film was how post world war one, they believed more government control meant better economic outcome. This makes sense of why we had a rise in dictators, and the reason world war two even started. Post war, inflation in Germany and Austria made money worthless. It was said that money was worth less than actual wallpaper. We learned a little about inflation in class and how as the years go on, our money becomes less valuable. We raise our minimum wage due to inflation. With inflation, our life becomes more and more expensive seeing our money goes less as far. The real and nominal value of money are not the same. This is why our minimum wage changes every few years.

This film basically shows two sides of economics through two figures. Keynes and Hayek, Keynes thought with more government control the economy would flourish. On the contrary, Hayek believes with the government controlling everything we would lose freedom and our economy would actually collapse. This really shows the two sides of free market and capitalism. It shows you how each one has its pros and cons. Hayek argued that socialist states cannot be successful because they lack a functioning price system to send the signals to consumers and producers, which would result in chaos. Even though this was extreme this is what he believed and free market with no control. I can see where he is coming from. Yes, the government doesn’t need to intervene in fair business, but we do need some control. Without some control I believe our country would be completely ran by the big businesses. Our country is already run by the rich without control I believe it would...
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