Rodel Novesteras Claus REACTION PAPER

BS in Accountancy 1-2 February 4, 2020

Commanding Heights

The struggle between free market and increased government control characterized by
globalization.

Markets should be given the power to determine prices, but governments need to make
sure that everyone plays a fair game and that, in case of a recession, inefficient institutions are
replaced and the economy is stimulated. Before, people were looking for something better and that
something came in the form of socialism and communism. Western civilization was fascinated by this
idea and started owning or regulating the so-called ‘commanding heights’ of the economy. Socialism
promised a more just society, Hayek was more concerned for the poor and equity. He believed that
people needed to be free from government interference and that markets work and governments
don’t. However, The Keynesian idea states that the government must have control over the
commanding heights

The world has practiced free economy for the past decades as a result of diminishing trade
barriers, advanced in technology innovation and unrestricted capital movement. The video explains
the global idea and the new challenges of globalization. Free trade has threatened emerging firm as
a result of competition and companies are near closure contributing to increased unemployment.

The story also covers the new challenges of terrorism, discusses the impact of globalization
and free trade to the developing world. The prosperity of the rich continues while the poor get
worse off. The free market has become unpredictable leading to the financial crisis. The world has
abandoned the old order for its failures. Communism was disillusioned, and it did not encourage or
contribute to trade, commerce or growth of capital. Commanding Heights tells how economy
compete from ups and downs and how people faced the economic revolution and their
ideas regarding world economy competed.

After watching the video, I came to a more understanding that the root causes of these
agonies would have to be greed, control, and money. Each country wants to be on top and in charge,
so they will do anything they can to gain these powers. Nations allow corporations to take big risks
and if these risk fail, they try to cover them up for as long as possible, ultimately hurting their nation.
 Nevertheless, the world is much better even though it is susceptible to the financial crisis.
Everyone should start to believe that efficient regulations are meant for a better economic
outcome.