The Global Divide

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The Global Divide
The global divide described in the Commanding Heights video is in regards to the differing views of Friedrich von Hayek and John Maynard Keynes. Hayek saw the market as a system that self-regulates itself, which eventually will sort itself out. On the other hand, Keynes saw the market as a positive force, which had to be adjusted in order for best results for the economy to be achieved. Therefore, for Keynes, there was a need for government interference for stability in the economy to occur. On the other hand, Hayek believed that for favorable outcomes to be realized, the economy should be left alone. As such, there was a divide in regards which system worked best for the economy, and this is the global divide that the video examines. While both ideas offer a way of managing an economy, Keynes’ dominated and his ideas were pursued by many nations.
According to Hernando de Soto’s Paper Wall Theory, a majority of humanity create value and trade in the face of bureaucratic obstacles. From de Soto’s point of view, the world is filled with exclusive and confusing laws, corruption, bureaucracy, and procedures that keep the majority of people in the world from cooperating economically both nationally and globally. Therefore, most of the people that are willing to improve their chances in life are not within the rule of law. Their chances of success are thus reduced because of the discriminatory legal systems that have prevent...