21 Economic Models Explained

25 February 2009 at 3:04 pm 37 comments

| Lasse Lien |

In celebration of Mahoney and Pitelis’s impressive achievement in strategic management, here is a related classic on economic systems (HT: K. Isrenn):

21 Economic Models Explained

You have 2 cows.
You give one to your neighbour.

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

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.

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.

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.

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.

You have two cows.
You go on strike, organize a riot, and block the roads, because you want three cows.

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.

You have two cows.
You re-engineer them so they live for 100 years, eat once a month, and milk themselves.

You have two cows, but you don’t know where they are.
You decide to have lunch.

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.

You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

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.

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 crap out of you and invade your country.
You still have no cows, but at least you are now a 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.

Entry filed under: - Lien -, Ephemera. Tags: .

Case Studies and Causal Inference Nifty Little Nuggets for Improving Your Impact

37 Comments Add your own

  • 1. David Andersson  |  26 February 2009 at 8:32 pm

    In another version of this, “Royal Bank of Scotland Venture Capitalism” is called “Hong Kong Capitalism.” But, of course, several of the old Hong Kong trading houses were of Scottish origin.

  • 2. hippybiker  |  6 May 2009 at 6:48 pm

    California Corporation

    You have two Cows, they get married and adopt a Bull who is Gay.

  • […] 2 cows. The State takes both, shoots one, milks the other, and then throws the milk away. more: 21 Economic Models Explained Organizations and Markets __________________ "The essence of freedom is the proper limitation of government." ~ […]

  • 4. Mir Rashid  |  13 May 2009 at 4:24 pm

    Pakistani Corporation.
    You borrow two cows from world bank.
    politicians milk cows and drink the milk until cows are dead. After 10yrs you owe 20 cows to world banks.

  • 5. J. John  |  8 June 2009 at 2:15 pm

    (or: A British Corporation II)

    You have two cows.
    In the interests of safety, the government already knows everything about your cows, yourself, your family, where you have been and who you have talked to. Regulations none the less stipulate that you fill out 120 incomprehensible forms per cow.
    You are then fined.
    You may not sing in the streets when drunk.

  • 6. Kaushal Bhattarai  |  12 July 2009 at 2:57 am

    You had two cows. One which developed 22nd Economic Model and another was so foolish to read them out, interestingly.

  • 7. MINYAHIL ALEMU.  |  5 June 2010 at 6:12 am

    The descriptions provided on the economic models are very much interesting and are teaching.I found new things from the notes.
    And it will be more interesting if you try to relate or apply the models on the current real world economic situations.

    Thank you! It is from Addis Ababa, Ethiopia.

  • 8. maria theresa  |  16 July 2010 at 1:16 am

    should i be laughing at the explanations or are they real explanations? i am just wondering because somehow some of them make sense or they really are what they are seem. like the indian corporation, they do worship cows. thank you very much.

  • 9. Guilherme Lambais  |  31 August 2010 at 4:48 pm

    A Brazilian Corporation
    The State Enterprise has two cows, which are running too much deficit.
    The State sells one cow to the private sector for the price of one donkey. The other cow is disputed on justice, among public and private sector, traditional families and a civil group, which will take 25 years.
    The private sector, who now owns the only cow that people know where it is, charges the population for the milk of a pricey exclusive Himalayan goat.

  • 10. Economic models explained | (Le)Strange Thoughts  |  25 February 2011 at 8:37 pm

    […] a repost from  http://organizationsandmarkets.com/2009/02/25/21-economic-models-explained/ no copyright infingements are intended. I did NOT write this handy dandy article! This […]

  • 11. Bobby Ivans  |  14 April 2011 at 8:48 pm

    The Papua New Guinean Corporation
    You have two cows.Your in-laws kills one and distribute it amongst their extended family. You sell the other one for the price of a carton of beer. Of the 24 bottles in the carton, you only drink 4, while ur parasitic brothers in-law drinks the rest with your buddies.In your case it seemed unfair, so you take your in-laws to court. The Judge would formally welcome you again to the country and add “Expect the unexpected Son”.

  • […] | Lasse Lien | In celebration of Mahoney and Pitelis's impressive achievement in strategic management, here is a related classic on economic systems (HT: K. Isrenn): 21 Economic Models Explained SOCIALISM You have 2 cows. You give one to your neighbour. COMMUNISM You have 2 cows. The State takes both and gives you some milk. FASCISM You have 2 cows. The State takes both and sells you some milk. NAZISM You have 2 cows. The State takes both and sho … Read More […]

  • 13. Nate  |  22 June 2011 at 12:43 am

    Can you say bias?

  • 14. Ruhi Sonal  |  8 January 2012 at 7:08 am

    Funny, but isn’t there no state in communism at all?

  • 15. Connie  |  9 January 2012 at 11:41 am

    You have 2 cows.
    People from another country come and take your cows and force you to do slave labor and give most of your population diseases thus slowly killing them off.
    Those that live are forced to live on specific plots of land owned by the government.
    Then the government feels bad and gives you rights to a large casino. You become rich and retire peacefully.

  • 16. Sarhang  |  10 January 2012 at 3:17 pm

    A Canadian corporation
    You have two cows.
    Instead of mwaaa, they say ehhh?

  • 17. COW LOVER  |  14 January 2012 at 1:39 am

    Hey Sarhang! Since when does a cow MWAA?

    MOOOOOOOOOOO!!! you fool

  • 18. oberlaie  |  25 January 2012 at 7:43 am

    You have two bulls.
    You make them stampede through your city for fun.
    You decide to first have siesta and then count the dead tourists later.

    You have two sheep.
    The right one looks rather cute …

    You have two cows, your neighbor has none.
    You feel guilty and sell one to the neighbor for half price.
    You regret it later and charge him for the water that flows through your land to the neighbor’s land.
    You don’t feel guilty at all.

    You have two cows, your neighbor has none.
    You feel guilty and elect someone to put a new tax on cows.
    You have to sell one cow to pay the tax.
    The government buys a cow from the tax income and gives it to the neighbor.
    You don’t feel guilty anymore.

    You have two cows, your neighbor has none.
    So what ?

  • 19. Alatna  |  28 January 2012 at 10:38 am

    The greek Cooperation

    you say, you have two cows…

  • 20. Devon  |  29 January 2012 at 12:07 pm

    Dude… fantastic

  • […] […]

  • 22. Abir Mandal  |  21 April 2012 at 11:02 am

    Then they leave California to go to Texas where people can afford to buy the milk.

  • 23. JKB  |  21 April 2012 at 3:08 pm

    Government-guided capitalism
    You have two cows
    You try to sell one and buy a bull
    But you are have now applied for the 100th permit, paid massive fees, spent a fortune on the EIS, now you await the board hearing on whether you will get the permit.
    You make a strategic campaign contribution
    Your permit appears the next day
    Then you discover the government will pay you a subsidy if you have two cows but don’t produce any more cows this year
    You build a luxury barn for your cows and complain about suburban development in your once pristine rural community
    You know your subsidy will continue as long as your campaign contributions continue.

  • 24. Todd Lohenry  |  22 April 2012 at 7:31 am

    Reblogged this on Todd's Perspective and commented:
    LOL. I never knew economic models could be this simple…

  • 25. bage66  |  23 April 2012 at 6:56 am

    Oligarchy, you have two cows, then you have no cows (via forced sale, chosen winners/losers, elimination, etc), “no soup/milk” for you.

  • 26. Howard McTaggart  |  21 September 2012 at 7:34 am

    This would be a great lesson for the first economics class in high school, I remember it as being quite dry, something like this might lighten the the classroom atmosphere, the class will realize that the teacher does indeed have a sence of humour. LOLs

  • 27. Mo-Town  |  22 November 2012 at 7:07 pm

    Israeli Corporation
    You once had two cows, you left them because you believed they weren’t worth the trouble, after a many generations your granddaughter corporation believes they have the rights to the cows, forcefully taking them from their current owners. Then after the other people you style it from complain, you pay every world power to agree with your opinions, you then wait anther few generations till none realizes that you don’t have rights to the cows at all.

  • 28. rebkoch  |  21 January 2013 at 11:43 am

    Belgian corporation
    You have two cows. One speaks French, the other speaks Dutch. You draw a language border, each cow on one side. The French speaking cow used to give more milk and thus fed the calves of the Duch speaking one. But now times have changed: the French speaking cow has little milk and the Dutch speaking gives more milk. You want to sell instead of giving it to French speaking calves. Therefore you set up a separast party and tell everyone that the two cows cannot live together anymore. Unfortunately, the only big stable with the milking machine is inseparable and managed by supranational forces.

  • 29. Bob  |  13 March 2013 at 7:07 pm

    Irish government
    You have 2 sheep.
    A couple months go by
    You have 2 sheep and a sheep-human mutant.

  • 30. Ike Jakson  |  21 April 2013 at 12:25 pm

    Great Blog! I love the humor and the serious parts.

  • 31. Ike Jakson  |  21 April 2013 at 12:28 pm

    Would you like to know about the South African model?

  • 32. monopoly  |  5 August 2013 at 12:34 am

    Mongolian government
    Mongolian policy makers have two cows. they say that these cows are mongolian citizen’s property. but they have sold to Rio tinto and they have become savings in bank of Switzerland

  • 33. abajo_fidel  |  2 February 2014 at 3:14 pm

    CUBAN corporation
    You have 2 cows. One cow dies, you eat it. You go for 20 years to jail. The other cow dies as well, because the state does not allow you to buy anything. Because all cows, you and your family as well, belong to the cuban revolution.

  • 34. kellerman8  |  14 February 2014 at 1:17 pm

    the nigerian democracy
    you have two cows,
    the state roasts one and shoots the other and asks you to go fuck yourself

  • 35. John Smith  |  27 March 2015 at 10:33 pm

    A Cuban Corporation
    You have two cows.
    The state takes both, kills the cows, and gives you the cows back with some milk. You eat the cows, and use its remains to make jewelry and many other useful items, which you sell to (mostly Canadian) tourists. The state then takes the proceeds and gives you weird pieces of paper in return, telling you that it’s money.

  • 36. Andres Falcone Alcalde  |  24 November 2015 at 9:56 pm

    Argentine capitalism: You have two cows. You starve and milk them until they can’t give more milk. Then you sell them to a foreign corporation that starts investing in the cows. When they’re fat and giving milk again, you nationalize cows and indemnify the foreign company with worthless sovereign bonds, but you never pay that debt. The cows are getting alarmingly skinnier.

  • 37. Andres Falcone Alcalde  |  24 November 2015 at 10:20 pm

    Cuban socialism would be more like: You have two cows. The state takes one and gives you weird papers, telling you can trade them for milk (and sugar). The other one is starving because the state doesn’t let you buy anything, so you sacrifice it to eat some meat. The state finds out, puts you on trial and sentences you to 10 years imprisoned (that last part is real, google it). You salute the revolution.

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