Keynes and game theory : poldermodel

John Maynard Keynes as far as i comprehended it, defined three main contributing factors to production, nature, labor and capital.

The dutch Poldermodel was a keynesian instrument, that assigned representatives for each factor. Unions for labor, management for capital/investors and government for nature (natural resources, culture, community).

Normally everyone has a stake in all three. You cannot come to groupwise decisions if everyone sits at the table with three hats. The Poldermodel assigns a representative for each factor, put them at the table and each have to try and optimize for their factor, but only decisions that are agreeable to all three are implemented.

Game theory. Games like Age of Empires use the same model (food, wood, gold for nature, labor, capital).

It works as long as each representive plays his role proper. The achilles heel is the government which is elected, it can be liberal, labor and is seldom ‘green’. A liberal government is prone to put on the capital hat and resort to pro-cyclic spending : trying to stimulate a high conjunctural phase even higher. That can creates bubbles, and where management might be local, investors are global and if they are from outside the system, skimming a system has no “penalty” for them. They will attempt to skim the market.

Keynes would prefer the government skim in a high conjunctural phase, dampen excessive growth and store the extra tax funds to supplete spend in a low conjunctural phase in order to maintains a stable spend capacity, turnover and employment.

Sic transit gloria mundi (“thus the world goes to hell”).

Posted in juust.

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