It was stated that the expressway had 3 lanes on each side, but in the helicopter view there were only two on each side. This proves that Friedrich Hayek was the world's greatest economist.
Please revise your video at 6:30; at this juncture, the use of the Phillip's curve and animated directional arrows on that graph contradict the narrative. I believe you meant to illustrate the narrative with an AD/AS graph.
You dont need regulation to prevent cartels and monoploys, in the long run new buissnesses will see the potential profit and join the market so there is no monopoly and the members of the cartel will cheat on the cartel to maximize their profits
Monopolies and cartels can only exist with the aid of government. Most regulations enacted by Congress on a particular industry are drafted by the big businesses to crush competition and keep the small businesses from growing or from new competition from entering the market all together. YOU apparently don't understand the basic business cycle and role the government and federal reserve play in it.
You're seeing it backwards, buddies. History has proven time and time again that deregulation causes monopolies (learn spelling, btw) and mafias to control the market: without regulation and government interventions new businesses simply cannot keep up with large old ones; when monopolies grow too big, they start affecting the government in their favor, enacting and shifting laws to further decrease the capability of new businesses to compete. No monopolies don't need the government to exist and subsist but bribing politicians into further aggravating the competition sure helps. Eventually when the unregulated corporations grow too big, the government needs to appeal to their particular interests in order to survive - and this is not just to protect the selfish interests of politicians, but also the entire country's well-being -. In other words, the problems of government regulations come only once we've already let corporations run too freely for too long. Like rebellious teenagers who are not set boundaries by their parental figures, they grow into even more troublesome adults. We've seen this happen in many industries of the US, in the best cases, we still get reduced to only two companies which compete very little with one another or even supper conglomerates were all the players in a field belong to the same group of people. We've seen it with Google and youtube, which destroy the competition every time it arises while treating it's users to the barest minimum courtesies while constantly stomping on honest content creators by demographics; we saw it with Intel and AMD, the processor manufacturers that for years kept the market stagnated in 4-core processors when the technology to make 64 cores has been around for quite a while, less than a year after AMD decided to innovate and create such processor for the market, Intel took a 128 core out, showing they could've done so for a while now but didn't due to customer complacency, we see it with internet providers, who for over half of the territory of the United States run without competition because of laws that they bribed politicians to enact (politicians want money, productive citizens with rights and fair access to services produce a lot of money in a few years, but big firms can dish out a fraction of that amount in the now). This last part happens all the time, neoliberals have this completely fantastic idea that customers are experts in personal finances capable of resolving complex game riddles in seconds like supercomputers and always take the most objectively convenient action when shopping even though everyone who knows a bit of marketing knows how utterly ridiculously outside of reality this is, neoliberals use this belief to argue that a free anarchist market will automatically regulate itself through customer's smart spending, but since this never happens, monopolies happen instead. So don't be silly, just because laws can be enacted to prevent free competition, doesn't mean that laws can't be enacted to protect it, in fact, the latter will warrant fair competition, while a pure free market doesn't. You must first understand that without laws there are no rights: corporations are just other form of government, but unlike the democratic federal government which has to hold themselves accountable for their actions to the citizens, the absolute unconstitutional dictatorship run by the board of directors and CEOs doesn't have many responsibilities towards you as an employee and very little towards customers, they even deny you to be open about sensible information like your salary, budgets plans and other info that is fervently demanded of public operations and functionaries (you can't even discuss your salary with coworkers, I shouldn't need to explain to you all the repercussions this has on worker rights). They don't need your comfort or your well-being, they only need your complacency, which is gained much more easily as history once again proves: last time we combined a mostly absent government with highly efficient industrialization was before WW2, do you remember what happened back then?
Economies certainly aren’t fully self correcting. The problem is that government interference will almost always spur malinvestment, and makes things worse.
One major pitfall of this video is that it isn't what it says it is. I watched for 10 minutes and I didn't actually see a classical or keynesian model, just a phillips curve.
Serious no BS question here... why would a sluggish economy, which I assume would mean lower demand for goods and services benifit from full employment? In the keynesian model, The cost of employing the unemployed would require government intervention I assume. Well, since the government produces neither goods or services to sell, they have to take that money from something or someone that produces goods and services. Taxing the corporations more would essentially be equal in cost to forcing them to employ people they don't need. And who is going to run a business where you loose money? So it seems the government has to impose higher taxes on the people it is trying to help by creating that false demand for employment. In this case, sure more people are employed, but less people are saving, which to me is the real measure of an economy's potential. After the great depression and the "New Deal", didn't unemployment remain at all time highs? It wasn't until after the war, and perhaps coincidentally, the government cut spending that the economy really took off. Plus, It helped that the rest of the industrial world was in ruble and they all had to buy from the US to rebuild. Keynesian economics, to me, is like a store owner telling people he will give them money out of his own cash register if they buy from his shop... sure his sales go up, but he's not making any real money and there appears to be high demand for products that are not in demand, thus really causing resources to be misused. Am I thinking of this wrong?
The unregulated free market was perhaps precisely what caused the Great Depression in the first place. When demand falls low, the Keynesian model comes in and creates demand where necessary.
Why should full employment occur in the long run? Conditions are constantly changing making the current deployment of people and resources less than optimal. So why not an endless scramble to adjust?
The cuteness of this oversimplification of how an economy works is unfortunately. The premise lacks an understanding of Economics. Economics is the study of human behavior between 2 parties seeking value in a transaction. It is not understood by a factory machine concept. That is exactly where Keynesian breaks down is the lack of understanding of the dynamics of spontaneous transactions and the independent perception of value of the 2 parties involved. The concept of centralized planning with aggregate efficiency is not achievable. Keynesian appeals to the politicians as it appears to validate their power. In Keynesian the only way to equal out things as this video suggest is to force ably take away from those who have earned more and redistribute to those who have less. So in other words the only way to make things equal is to make things unequal...socialism.
You seem to be the type of person to read, "To Give a Mouse a Cookie" and complain that it lacks character depth and a strong resolution. Not every youtube video had you in mind as an audience member, champ. Also, "unfortunate"
he's intentions were clearly to promote his intelligence. Not saying he isn't wrong but the video was a helpful simplification and everyone here knew it lol.
6:46: how is there more inflation and less unemployment when an economy is in a recession ???. If anything there is more unemployment and prices are constant/ go down
Ok so the Keynesian model says it’s impossible for a business to form to clear the highway when accidents happen and only the State can solve such a simple problem, enough said.
For the Keynesian Model to work I have to give control of the economy to the government. I'm not a big fan of this. My government already has to much control.
He just copy and pasted models and changed the ties color it’s just supposed to be a stereotypical politician and they copy and pasted him. You are vastly overthinking this.
The problem is that it was the government badly built road (the Fed) with bad traffic management and slippery roads that caused the truck to fall in the first place. That road was non existent wealth. Also, keynesians are forgetting about the cost of towing the truck as well, it is not free and also costs money itself, and you need to repair the road and fix the problem that caused the truck to fall. The market has realized that the road is bad and that fixing it is not economically worth it, but kaynesians force the issue, the market is perfectly happy going down another road. Also, and I know keynesiands like to think so, but the economy does not operate like a two way road. But is far more complex, organic and ever changing.
Keynesian economics validates government interference in the economy and that is BAD!!! Who remembers the depression of 1921? No one, because it was over so quickly. Remember, it happened before Keynes came along!! Politicians love Keynes!
I'm glad the truck driver was OK. I was worried for him.
Jon Smith Lol 😂 luckily he left his truck if not the tow truck would've towed him still lying side way along the entire interstate highway.
It was stated that the expressway had 3 lanes on each side, but in the helicopter view there were only two on each side. This proves that Friedrich Hayek was the world's greatest economist.
markets are organic in nature and 'human' and it is such interference in the market mechanism leads to recession and depression
Lol! that stupid tow truck 2:42 towing the flipped truck still on its sides cracks me up 😂😂😂.
3:15 Beethoven didn't wear a wig... (no recorded paintings with him wearing one at least)
Please revise your video at 6:30; at this juncture, the use of the Phillip's curve and animated directional arrows on that graph contradict the narrative. I believe you meant to illustrate the narrative with an AD/AS graph.
yep he had the arrows the wrong way round
@@Overkill7200 Thanks for correcting I was very much confused!
Appears to be a pro-Keynesian video. The approach of Keynesian economics prolongs recessions.
You dont need regulation to prevent cartels and monoploys, in the long run new buissnesses will see the potential profit and join the market so there is no monopoly and the members of the cartel will cheat on the cartel to maximize their profits
Monopolies and cartels can only exist with the aid of government. Most regulations enacted by Congress on a particular industry are drafted by the big businesses to crush competition and keep the small businesses from growing or from new competition from entering the market all together. YOU apparently don't understand the basic business cycle and role the government and federal reserve play in it.
You're seeing it backwards, buddies.
History has proven time and time again that deregulation causes monopolies (learn spelling, btw) and mafias to control the market: without regulation and government interventions new businesses simply cannot keep up with large old ones; when monopolies grow too big, they start affecting the government in their favor, enacting and shifting laws to further decrease the capability of new businesses to compete.
No monopolies don't need the government to exist and subsist but bribing politicians into further aggravating the competition sure helps. Eventually when the unregulated corporations grow too big, the government needs to appeal to their particular interests in order to survive - and this is not just to protect the selfish interests of politicians, but also the entire country's well-being -. In other words, the problems of government regulations come only once we've already let corporations run too freely for too long. Like rebellious teenagers who are not set boundaries by their parental figures, they grow into even more troublesome adults.
We've seen this happen in many industries of the US, in the best cases, we still get reduced to only two companies which compete very little with one another or even supper conglomerates were all the players in a field belong to the same group of people. We've seen it with Google and youtube, which destroy the competition every time it arises while treating it's users to the barest minimum courtesies while constantly stomping on honest content creators by demographics; we saw it with Intel and AMD, the processor manufacturers that for years kept the market stagnated in 4-core processors when the technology to make 64 cores has been around for quite a while, less than a year after AMD decided to innovate and create such processor for the market, Intel took a 128 core out, showing they could've done so for a while now but didn't due to customer complacency, we see it with internet providers, who for over half of the territory of the United States run without competition because of laws that they bribed politicians to enact (politicians want money, productive citizens with rights and fair access to services produce a lot of money in a few years, but big firms can dish out a fraction of that amount in the now).
This last part happens all the time, neoliberals have this completely fantastic idea that customers are experts in personal finances capable of resolving complex game riddles in seconds like supercomputers and always take the most objectively convenient action when shopping even though everyone who knows a bit of marketing knows how utterly ridiculously outside of reality this is, neoliberals use this belief to argue that a free anarchist market will automatically regulate itself through customer's smart spending, but since this never happens, monopolies happen instead.
So don't be silly, just because laws can be enacted to prevent free competition, doesn't mean that laws can't be enacted to protect it, in fact, the latter will warrant fair competition, while a pure free market doesn't. You must first understand that without laws there are no rights: corporations are just other form of government, but unlike the democratic federal government which has to hold themselves accountable for their actions to the citizens, the absolute unconstitutional dictatorship run by the board of directors and CEOs doesn't have many responsibilities towards you as an employee and very little towards customers, they even deny you to be open about sensible information like your salary, budgets plans and other info that is fervently demanded of public operations and functionaries (you can't even discuss your salary with coworkers, I shouldn't need to explain to you all the repercussions this has on worker rights). They don't need your comfort or your well-being, they only need your complacency, which is gained much more easily as history once again proves: last time we combined a mostly absent government with highly efficient industrialization was before WW2, do you remember what happened back then?
@@jeppep95 and in the long run, millions will suffer while we wait for monopolies and cartels to self-correct themselves.
this video is very helpfull , and i got the core idea that all the time intermingles me. thnk you a lot
Great video because of your analogy and it’s the trucks - thanks
Great video, thank you!
really nicely explained.. thank u
This video did a better job than my Economics course tried to in 3 semesters, LOL! Thank you so much!
Roberta Cervantes Garcia 😂😂 I'm writing an exam on this tomorrow and this explained everything I haven't been able to understand this whole semester
Nombulelo Mthimkulu Hah, sad how a YT tutorial is a better teacher than some professors u___u
Good luck with the exam!!!
very clear and interesting explanation. thank you so much!
Very Well Explained Sir 👏
Great video man! Keep up the good work!
Great work!
The Keynesian model only works when the government makes an actual effort to return the money it's borrowed.
Jay The Don Corleone government is inefficent at spending money wich lead to inflation wich make the people poorer
great video! Thanks!
Economies certainly aren’t fully self correcting.
The problem is that government interference will almost always spur malinvestment, and makes things worse.
Imo there just need to be standards for how and when the government will intervene. That way people can work with and around it as it happens.
Pretty sure when unemployment goes down and inflation goes up on the Philips Curve, it isn't called a recession.
I liked this explanation, thank you
So which one is better: Austrian, Classical or Keynesian economics ?
Keynesian
And no sane person takes Austrians seriously
Can you explain why the 'sane doctor strange' came to that conclusion?
RUclipsforcedme Subjectivism, praxeology and gold standard
RUclipsforcedme And Keynesianism is not necessarily better, but I prefer it.
The Keynesian model was the main causes of the depression .
reggie reg it was after the depression
One major pitfall of this video is that it isn't what it says it is. I watched for 10 minutes and I didn't actually see a classical or keynesian model, just a phillips curve.
And sets the economy up for the next bust
Great way
I've driven in the states.. EVEN THE COPS SPEED ON THE EXPRESSWAYYYY
Thank You!
Easy to understand
Classical model is that economy needs no help from gov't.
Or, when the track fell; the drivers would come together to get rid of the truck in order to continue with their journey!
very good indeed
Súper!
Author forgets that Great Depresion was a result of government interventios.
Serious no BS question here... why would a sluggish economy, which I assume would mean lower demand for goods and services benifit from full employment? In the keynesian model, The cost of employing the unemployed would require government intervention I assume. Well, since the government produces neither goods or services to sell, they have to take that money from something or someone that produces goods and services. Taxing the corporations more would essentially be equal in cost to forcing them to employ people they don't need. And who is going to run a business where you loose money? So it seems the government has to impose higher taxes on the people it is trying to help by creating that false demand for employment. In this case, sure more people are employed, but less people are saving, which to me is the real measure of an economy's potential. After the great depression and the "New Deal", didn't unemployment remain at all time highs? It wasn't until after the war, and perhaps coincidentally, the government cut spending that the economy really took off. Plus, It helped that the rest of the industrial world was in ruble and they all had to buy from the US to rebuild. Keynesian economics, to me, is like a store owner telling people he will give them money out of his own cash register if they buy from his shop... sure his sales go up, but he's not making any real money and there appears to be high demand for products that are not in demand, thus really causing resources to be misused. Am I thinking of this wrong?
I am a strong believer in the invisible hand of Adam Smith. The Keynesian model fails because it ignores this principle.
The unregulated free market was perhaps precisely what caused the Great Depression in the first place. When demand falls low, the Keynesian model comes in and creates demand where necessary.
Why should full employment occur in the long run? Conditions are constantly changing making the current deployment of people and resources less than optimal. So why not an endless scramble to adjust?
Beethoven didn't wear a wig. It was kind of his trademark at the time...
The cuteness of this oversimplification of how an economy works is unfortunately. The premise lacks an understanding of Economics. Economics is the study of human behavior between 2 parties seeking value in a transaction. It is not understood by a factory machine concept. That is exactly where Keynesian breaks down is the lack of understanding of the dynamics of spontaneous transactions and the independent perception of value of the 2 parties involved. The concept of centralized planning with aggregate efficiency is not achievable. Keynesian appeals to the politicians as it appears to validate their power. In Keynesian the only way to equal out things as this video suggest is to force ably take away from those who have earned more and redistribute to those who have less. So in other words the only way to make things equal is to make things unequal...socialism.
Fibrenew Marietta as keyns said. in the long run we are all dead. he also recognises that his method in the long run is bad.
Fibrenew Marietta
You seem to be the type of person to read, "To Give a Mouse a Cookie" and complain that it lacks character depth and a strong resolution. Not every youtube video had you in mind as an audience member, champ. Also, "unfortunate"
he's intentions were clearly to promote his intelligence. Not saying he isn't wrong but the video was a helpful simplification and everyone here knew it lol.
6:46: how is there more inflation and less unemployment when an economy is in a recession ???. If anything there is more unemployment and prices are constant/ go down
that example is weird. i think hes saying tho that higher inflation and lower employment
Ok so the Keynesian model says it’s impossible for a business to form to clear the highway when accidents happen and only the State can solve such a simple problem, enough said.
It says that waiting for the private sector to correct the problem takes longer. Meanwhile we're all stuck on the freeway.
For the Keynesian Model to work I have to give control of the economy to the government. I'm not a big fan of this. My government already has to much control.
what about Marxist economics?
to many metaphors.
agree
speed limit is 55, so avg is 55 cause cars slow down. Keynesian economics at its finest
Love the "government guys in blue and red ties--all white men. Accurate for the 1930s. EXCEPT the architect of Social Security was female...
He just copy and pasted models and changed the ties color it’s just supposed to be a stereotypical politician and they copy and pasted him. You are vastly overthinking this.
The problem is that it was the government badly built road (the Fed) with bad traffic management and slippery roads that caused the truck to fall in the first place. That road was non existent wealth.
Also, keynesians are forgetting about the cost of towing the truck as well, it is not free and also costs money itself, and you need to repair the road and fix the problem that caused the truck to fall.
The market has realized that the road is bad and that fixing it is not economically worth it, but kaynesians force the issue, the market is perfectly happy going down another road.
Also, and I know keynesiands like to think so, but the economy does not operate like a two way road. But is far more complex, organic and ever changing.
lol poor explanation. Try using this explanation in a debate and you'll get rekt.
Keynesian economics validates government interference in the economy and that is BAD!!! Who remembers the depression of 1921? No one, because it was over so quickly. Remember, it happened before Keynes came along!! Politicians love Keynes!
no economic system is successfull if greed is the driving force...
Jeremia John xddd
Greed can be useful sometimes man