Economists Do It With Models

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An Overview Of Economic Systems, Illustrated With Cows…

September 25th, 2009 · 10 Comments
Just For Fun

My friend Mary sent this to me a couple of days ago, and I recall having seen it before, but her version said something along the lines of “updated for 2008” so I was curious enough to read all the way through. I figured it was entertaining enough to share with you, so here are some economic systems illustrated via a two cows example, for your reading pleasure. I’ve added my commentary where appropriate. I also put links on the first few, since I figured if people are going to accuse anyone of being a socialist or communist or whatever, they should at least understand what the terms mean.

(Sidenote: I also figured that I would post this because my mom really likes cows. I’m not really sure why, but it’s a long-standing thing, so I’ve stopped questioning it. For example, this is her desk at school:

I love how even the computer box has cow spots.)

You have 2 cows. You give one to your neighbor.
(Editor’s note: So Obama’s going to give me my neighbor’s cow? What if I’m lactose intolerant? =P)

You have 2 cows. The State takes both and gives you some milk.
(Editor’s note: And here I thought Communism was when the government bails out your cows by taking an ownership stake in them and then tries to tell you how to milk them. My bad.)

You have 2 cows. The State takes both and sells you some milk.

You have 2 cows. The State takes both and shoots you.

You have 2 cows. The State takes both, shoots one, milks the other, and then throws the milk away…
(Editor’s note: The authors left out the part where the state pays Lockheed Martin $50,000 for the gun because it has a cost-plus contract and the gun happens to be gold-plated.)

You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.
(Editor’s note: Unless you invested with Bernie Madoff. Then you just have some bulls***.)

You have two giraffes. The government requires you to take harmonica lessons.

You have two cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyze why the cow has dropped dead.
(Editor’s note: The consultants are more interested in the Key Success Factors regarding how the cow could produce the milk of four cows in the first place.)

You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States, leaving you with nine cows. No balance sheet provided with the release. The public then buys your bull.
(Editor’s note: The authors left out the use of Special Purpose Vehicles.)

You have two cows. You go on strike, organize a riot and block the roads because you want three cows.
(Editor’s note: Hopefully the French people don’t want milk with their cake.)

You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called ‘Cowkimon’ and market it worldwide.
(Editor’s note: Apparently there is such a thing as a Hello Kitty cow. Scary.)

You have two cows. You re-engineer them so they live for 100 years, eat once a month, and milk themselves.
(Editor’s note: As a loyal Volkswagen customer, I really do love that Geman engineering.)

You have two cows, but you don’t know where they are. You decide to have lunch.
(Editor’s note: Hm. Maybe this is why Parmalat was responsible for Europe’s biggest bankruptcy. *rim shot*)

You have two cows. You count them and learn you have five cows. You count them again and learn you have 42 cows. You count them again and learn you have 2 cows. You stop counting cows and open another bottle of vodka.
(Editor’s note: If the Russian oil companies are any indication, this should go more like “You have 42 cows. The public doesn’t believe that you are not going to steal most of the profit from the 42 cows for yourself, so they will only invest at the level that they would if you had 5 cows. But you know that you have 42 cows, so you don’t want to sell any of your stake, even though if you did people would be willing to pay you for more of your 42 cows.” See YUKOS.)

You have 5000 cows. None of them belong to you. You charge the owners for storing them.
(Editor’s note: I am assuming that this is a bank analogy? It’s certainly not a watch analogy…)

You have two cows. You have 300 people milking them. You claim that you have full employment and high bovine productivity. You arrest the newsman who reported the real situation.
(Editor’s note: And then the newsman gets rescued by Bill Clinton and signs a book deal.)

You have two cows. You worship them.

You have two cows. Both are mad.

Everyone thinks you have lots of cows. You tell them that you have none. No one believes you, so they bomb the **** out of you and invade your country. You still have no cows, but at least now you are part of Democracy….

You have two cows. Business seems pretty good. You close the office and go for a few beers to celebrate.

You have two cows. The one on the left looks very attractive.
(Editor’s Note: Sorry Toby. 🙂 )

Tags: Just For Fun

10 responses so far ↓

  • 1 randee // Sep 25, 2009 at 3:54 pm

    What sound does a Russian cow make?

    A Californian cow?
    Moo dude…moo

    A French cow?

    An Indian cow?

    A New Zealand
    Mooooy butt hurts!

    BTW, VW’s rule.

  • 2 Don Gooding // Sep 25, 2009 at 3:56 pm

    You have 1.7624 cows to make sure that marginal supply produces equilibrium with marginal demand. Whoops! Now it’s 1.7859 cows. Now 1.56…

  • 3 Carl Peter Klapper // Sep 25, 2009 at 4:31 pm

    Pat Paulsen had a segment on the Smothers Brothers with the capitalism analogy being, as best I can recall:

    You have two cows. You sell one cow to make a down payment on a bull. Then you put them both in your wife’s name and declare bankruptcy.

  • 4 Paul Jackson // Sep 25, 2009 at 5:02 pm

    21st Century CAPITALISM:
    You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. Your herd becomes so big, the government can’t afford it to fail when you feed them locoweed instead of grass. You retire with billions in incentive pay for reducing the costs of production by feeding them cheap locoweed instead of expensive grass.

  • 5 Jonatan Krovitsky // Sep 26, 2009 at 1:27 pm

    There is Facebook Group called:”This Is How Economics Should Be Taught: Cows”

    I’ll add Corporate Capitalism:
    You have 2 cows. You sell one and hire a service of Acount Firm , who prepare the reports for IPO. Once you went public, you bond the future milk production, and then sell your shares.
    In Corporate Capitalism you need just 1 cow to milk the whole system.

  • 6 Beatrix B // Sep 28, 2009 at 3:27 am

    For the Swiss Case: It’s really true that people go to the alps to look for cows that don’t belong to them during the summer months and charge the owners of the cows for that service… So besides of the bank analogy there is some deeper truth behind 😉

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  • 10 DRH // Aug 14, 2015 at 10:11 am

    A much funnier, more accurate older version ->

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