If keynesianism is so great, how come corporations never implement internally keynesian policies? For example, a corporation could run up deficits by buying a multi-million dollar cafeteria, raising its employee’s wages, and forcing them to eat there. This would nearly completely internalize all the “economics”, so if there are any benefits, they should materialize. Of course they will not and everybody knows this.
I’d argue that Keynes is more “macro” whereas corporate econ is more “micro”.
I imagine Paul Krugman would say it’s because the corporation isn’t in a liquidity trap so the broken window fallacy would apply.
These corporations have larger economies than many countries, particularly many countries during the great depression.
So where is the liquidity trap and why can it not be “incorporated”?
Perhaps even more reason not to have the macro/micro distinction.
Well to have a liquidity trap in a corporation you would need to have a loan market inside the corparation.
I was going to bring up the micro/macro distinction, but what is the Keynesian argument for it working on the macro scale but not the micro scale?
The macro-economy is modeled as a closed system whereas an individual firm is modeled as an open one that interacts with other agents. Therefore the dynamics of it are different and require different analyses.
Anyway, Keynesianism isn’t about runing up deficits willy nilly. The idea behind it is to soak up deficiencies in aggregate demand in times of recession (running deficits), and cool down the economy in boom-times (running a surplus). Most governments recently around the world have just been doing the former.
BTW, I’m not expert Keynesian so this is my half-informed understanding of it all.
Aside from the macro-economy obviously being open (lol), the implied stipulation of the OP is that corporations have THE OPTION to be closed. So the example was that they ran up their deficit spending it on something that would stay within the company and its workers.
Still. If corporate sales begin to plummit, it should be obvious that the solution is not to run up corporate deficits, even for a “closed” corporation. There are literally no circumstances under which keynesianism will work for private entities.
Aside from the macro-economy obviously being open (lol), the implied stipulation of the OP is that corporations have THE OPTION to be closed. So the example was that they ran up their deficit spending it on something that would stay within the company and its workers.
What do you mean when you use the word ‘closed’?
What do you think I mean when I use the term?
In what way do firms have the option to be closed?
Still. If corporate sales begin to plummit, it should be obvious that the solution is not to run up corporate deficits, even for a “closed” corporation.
See above
There are literally no circumstances under which keynesianism will work for private entities.
Exactly. That’s my point. Keynesianism is a macro-economic theory not a business strategy.
Also. Just so we are on the same page. What definition are you using for the term Keynesianism?
Economic goods flowing in/out of the organization.
A policy is “closed” if its economic impacts stay within the organization. But if you really want to press it, a corporation could just flat out refuse to trade with any other market pariticipant.
And if its not a valid strategy for businesses, and businesses are similar in many respects to states (they are both economic organizations), then keynesianism is not a valid strategy for gummints.
Economic goods flowing in/out of the organization.
Could you be a bit clearer on what you mean please? Are you saying that a closed system is one which has flows going in and out of it? This would be an open system not a closed one. A closed system is one that is self-sufficient and in which all flows circulate internally
A policy is “closed” if its economic impacts stay within the organization. But if you really want to press it, a corporation could just flat out refuse to trade with any other market pariticipant.
Would this imaginary organisation also have a captive population? A banking sector? An internal market of competing firms? its own currency? Its own legal system? If not, then the organisation you described would not be closed. Of course, what is being descibed here is not a business but an economy.
And if its not a valid strategy for businesses, and businesses are similar in many respects to states (they are both economic organizations)…
No. They are nothing like each other at all. They are qualitatively different structures in a million different ways. They have completely different dynamics and so must be analysed with different tools.
Obviously if goods are not flowing in or out, that is a “closed” organization economically speaking.
Work contracts.
Corporate coupons
They’re sometimes called “asset teams”.
Coupons
Most corporations have rules, formal and informal.
Why the hell not? Why does something have to have “internal competing firms” to be closed?
An economy is just group organization of scarce resources. The world has an economy. So do its constituent countries. So do their constituent businesses. So do their constituent family units.
States are formed aggressively. That is the ONLY difference. One of the most practiced libertarian strategies is to point out the ways in which the private sector operates similarly yet superior to the public sector.
Obviously if goods are not flowing in or out, that is a “closed” organization economically speaking.
Ok. We are on the same page now.
Work contracts.
A work contract that forces the population to buy everything from inside the firm? One that prevents the population from getting a job outside the firm? This doesn’t sound like a firm to me. It sounds like a nation state.
Corporate coupons
Corporate coupons is your definition of a fully developed financial sector?
They’re sometimes called “asset teams”
Do these asset teams compete with each other for the custom of the coupon bearers? Do they produce all the amenities of life that they need? Do the asset teams all make different products and operate a division of labour?
Most corporations have rules, formal and informal.
Yes. And you can get a job elsewhere. So the system is not closed. Rules are not the same as laws.
Why does something have to have “internal competing firms” to be closed?
It doesn’t. It has to have internal competing firms to be an economy. An economy is a system CONTAINING firms. A firm is not an economy. Get it?
An economy is just group organization of scarce resources.
No. It’s not just that.
States are formed aggressively. That is the ONLY difference.
No. There are many reasons. Just a few of which I have listed here.
One of the most practiced libertarian strategies is to point out the ways in which the private sector operates similarly yet superior to the public sector.
Well then it’s no surprise that libertarianism is not that widely accepted
Without meaning to seem rude, could I ask what your area of education was?
Corportions can employ coercion. Just not aggression. You don’t need aggression for people to be “bound” to the organization. Again, “work contracts” are quite common.
Its my example of banking/currency within the corporation. It actually exists. Corportions COULD develop their own currency/banks but haven’t cus its probably a pretty bad idea. Kind of like how they COULD run up large deficits but don’t.
They compete for capital. Because they are TEAMS, they employ division of labor (is this so hard?). They may or may not make products different from other asset teams. They do not produce everything that they use, but they COULD. And this is not relevant anyway because nations do not even produce everything that they need.
First, in principle, no. A work contract could bind you to a corporation. Second, you can always just switch countries, so at least one of the following is true: Corporations CAN be closed, or countries are not closed in practice. Either way this issue is completely moot. So drop it.
Lol. That’s an esoteric definition of “economy”. And the boundaries of firms are arbitrary anyway, and firms can have competing asset teams (read: firm analogs) within them, so it seems like it falls apart on account of fuzziness. Try using a more normal definition of “economy”, like “group organization over scarce resources”.
I can’t wait for you to tack on little superficial stipulations to the definition so that you wind up being “right”. This is all SO FAR removed from the initial conversation. You are not even talking about keynesianism applied to states or businesses. You haven’t given one ounce of analysis. You’re just niggling over trivial definitions without even explaining why they would make a difference. Its a joke with you.
Are you new? How about this. A state is an aggressive monopoly on arbitration. That definition is good because it allows me to successfuly identify all the things putatively called “states” without falsely identifying things not called states.
Lol nice rebuttal. Libertarian strategy has always been to focus on the aggressive/involuntary aspect of the state, not its superficial structure. That’s how libertarians define the state, and its a correct definition for reasons listed above.
BWAHAHAH I was just about to ask you the same thing! See you’re just dancing around the issue of the OP by focusing on some trivial idiosyncratic way that you choose to define states, which in turn does not even apply to states in practice (states are not closed). I think you’re confused and just trying to save face now. I’d rather you just give up because at this point you’re wasting my time.
I’m a graduate student at UT Austin in Petro Engineering. According to department rankings, its pretty elite. But yeah thanks for talking down to me “without meaning to seem rude”. I mean, “not to insult your intelligence”, but “”. Zzzzzzzz
The reason I asked is because your question is the sort of question a 13 year old would ask (And btw, at this point I don’t care if I seem rude). I wanted to get a feel for the sort of level I needed to talk at.
Seeing as your a big boy now, I’m sure you will be able to cope with me telling you to go read some macro 101 because at the moment it is clear for all to see that you are an utter ignoramus. It’s almost funny… almost.
No offense like…
Oh, and this is even funnier:
"People do an incredible thing. No matter how incompetent they are, no matter how poor their knowledge or technical ability, people will sit there and pretend like they should be taken seriously. "
The irony is delicious
Lol. You’ve given it an answer that you think depends on the definition of “closed”, except even if I am COMPLETELY wrong about the kinds of “closed” strategies corporations can adopt, states are not closed either so we still have a good comparison along at least this parameter.
BWAHAHAHA. So lets see… if I were beating the living snot out of you, and you really were wrong about everything, this is exactly what you could say to save face. K. I’m just going to declare victory since you’re A) not even trying to argue anymore and B) not even arguing about anything relevant to the OP.
lololololololol you are indistinguishable from a troll. Have fun bluffing your way through life! If anyone ever contradicts you, you can just tell them to read a textbook loololololol.
Lol. Right back at you. But I obviously get to you if you’re going to go through the search engine and look for my old posts.
Umad bro?