“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.”
You have a serious misunderstanding about what I mean by a ‘closed systems’, which is why I was labouring the point. It’s fuck all to do with ‘strategy’, it’s about how the economy is modeled by most economists. Hint; a closed system is the opposite of an open one.
" I’m just going to declare victory…"
I didn’t realise it was a game of Warhammer Online. But fair enough, if it makes you feel emasculated to ‘declare victory’ then go ahead
“lololololololol you are indistinguishable from a troll”
To be honest, I can’t argue with you on that point. Sometimes the Tinterweb does funny things to people, and it is quite fun to troll sometimes. I’m sure a delicate wallflower such as yourself will survive.
Oh, and as an aside, my ‘definition’ of an economy was more of a description. Unlike the genuinly esoteric mumblings of The Cult of Mises, I prefer to deal with things as how they are in reality as opposed to ‘truths’ garned via armchair philosophising and bonkers ‘a-priori’ reasoning.
Red herring. See “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”.
And yeah. You’re totally ignoring all the strategies that I pointed out corporations could and do adopt that could bring them towards being “closed” systems. See you want to pretend that corporations are these conventional white-collar operations where anyone can quit at any time, and the corporation only produces a narrow set of goods. This NEED NOT be the case. Corporations have the OPTION to form closed systems. Its just that they don’t because that would be a bad idea because the benefits of keynesianism don’t exist.
Good thing you speak english. But yeah har har so funny warhammer online why are you so creative and witty? Btw you should probably learn to use the quote function instead of C&P like a 45 year old having a mid-life crisis.
No no no. You got me man. I cried for hours because of what you said. You’re totally right even though you have never tried to prove that anything you are saying has consequences relevant to the OP. I guess I should just resign from having opinions… oh wait.
Why is your definition better? My definition is MUCH more general and it reflects what people actually CAN do with scarce resources and division of labor, not just some narrow artificial “well there have to be firms and those firms have to produce heterogeneous goods and hire from the same pool of laborers…” See you obviously miss out on describing anything that people could HYPOTHETICALLY do, which is the POINT of the op.
Also extend that my definition of government is superior. You didn’t address it. Actually you didn’t address a lot of stuff cus you’re just cherry picking your way through my posts. Its a great way to avoid looking like you made a mistake! You just ignore it if it comes up. Maybe one day I can be that intellectually honest…
If you honestly believe that “why don’t businesses adopt Keynesian policies?” is a good critique of Keynesianism then either you misunderstand what Keynesianism is, misunderstand what an economy is, or misunderstand what a business is. At this point I assume it is all three.
Cus those policies are supposed to be for governments
Why won’t they work for businesses?
Because businesses aren’t defined as governments
I know but what is it about businesses that make keynesianism inapplicable?
Well, businesses aren’t closed.
Governments aren’t closed either, and businesses could be closed in theory: (long list of examples)
You are stupid and I can’t use the quote function or words correctly
As I am a sucker for hitting my head against a brick wall, I though I would draw a pretty picture for you in the hope something might eventually sink in.
Fisrt off, it is not the “definition” of an economy per se, but the ACTUAL DESCRIPTION of one that matters. Individual firms and entire economies are quite clearly different in their structure, their function, their scale and their internal dynamics. To deny this in favour of some ideologically convienient ‘definition’ is a mistake.
Here is a simplified model of an economy that assumes net imports/exports to be zero. Roughly speaking, the Keyenesian theory says that savings and investment will not always be in balance. Sometimes there will be more investment than savings, at other times it is the other way round.
As a result, supply and demand can be out of whack. Sometimes aggregate demand will be too low, other times to high. To rebalance the system the Govt redirects the flows in various ways to ensure that aggregate supply and demand match.
Now look at the system from the perspective of the individual firm. The firm takes loans and invests in new production. It pays wages out and gets money in from its customers (the households). It is an OPEN system with flows going in and out.
If for some reason a firm is doing badly, it can take more loans sure (run a deficit), but if it cannot pay them back it goes bankrupt obviously. But at the national level, counter-cyclical fiscal policy just shifts around the money in the system in order to rebalance it. This is the fundamental difference between an individual firm and an entire economy.
You are claiming that Keynesian policy should work at firm level if it is to work at a national level. I am telling you that the POURPOSE of keynesian policy is to attempt to rebalance AGGREGATE supply and demand. How could a firm possibly do this?
Your question doesn’t even make sense. It is like asking “If going for a jog is good for your entire body, why can’t your lungs go for a jog by themselves?”
First, no. The context of this thread is to ask a HYPOTHETICAL question. This will differ from ACTUAL practice. This is why we need a GENERAL definition that reflects all the things that people COULD do in an economy, not what they actually do. I already know corporations ACTUALLY do not pursue keynesian policy. That’s kind of the point…
Well that assumption is wrong. I thought you were going for an “ACTUAL DESCRIPTION”? Just sayin…
Your diagram is also not empirically correct. See the government also derives revenue from banks in the form of loans (like businesses), and obtains taxes from both firms and households (your diagram does not make this clear…). Firms also “consume” each other’s products, so its not just “households” that buy the products of firms. Firms also SAVE and contribute to the loan-base. Firms also do not HAVE to take out loans - any economist will tell you that. Banks are also firms themselves, so… you know… durp.
I mean, you could write “government” where you have “firms” written and it would still be as correct as you have it now. You’re basically just defining firms to be these white-collar 9-5 operations, but they don’t HAVE to be. You have never challenged this. You have never challenged my observation that there are a variety of organizational strategies open to firms. So good job. But I guess drawing a diagram makes you feel smart.
It does not HAVE to be. It does not have to take out external loans. It does not have to pay wages “out”. It can pay wages “in” and produce products “in”. Its called a contract. You should maybe include contracts in your theory of firms.
Unless a corporation used its own system of credits. I mean you are really making this too easy… And a nation isn’t even closed in the first place. People and capital are mobile and trading with lots and lots of external entities. So again, there’s nothing to indicate that the economics of NGOs are somehow different from those of governments.
Except governments are aggressive monopolists on arbitration. See you’re not even challenging my definitions you’re just masturbating about your own trivial descriptions of the status quo. Good job? K.
Because the aggregation is just arbitrary. It draws a line around a geographic area and says “durp, aggregate economy”. I can do the same thing and draw a line around a firm. Or a person. Or several countries at once.
Except the lungs and body are categorically different. In this case, firms are capable of being independent economic units. And even if they are not, they are AS independent economically as states are from one another. So you know, its analogy time.
