None other than Keynesian

The Keynesian economic paradigm is a much better example of the world we live in with regards to the current U.S. agriculture industry as what is more “real”.  As opposed to the neoclassical school of thought, the contemporary agriculture economy is more real in a Keynesian way because the government or public sector helps stimulate the economy when times are tough.

Currently, the U.S. food industry is dominated by large corporations like Nestle, McDonalds (I gave you up for lent you temptress), and Kraft. These large corporations pay the farming to produce their ingredients to make their products. Ultimately, the large corporations make more money because they are at the top of the food chain, determining a price that will make them the maximum amount of profit. The large corporations undergo many regulations and larger taxes in order to control the food industry. Without these restrictions, the economy would get out of control because the product would be of low quality in order to save the large corporations money. The government regulates the quality of the products and gives bigger taxes to more wealthy corporations. This type of government influence in the economy is indicative of Keynesian economics where the public sector assists in the economy to help maintain order. It is not uncommon to read in the news about how a state or the Federal legislature is giving tax breaks to community farmers. For example, one article I found in the Salt Lake Tribune, talked about how in Utah, the state legislature wanted to reduce property taxes for urban farms. This is to help them survive in the volatile contemporary market. It is clear that there is government control in the agricultural food industry. It is not a completely laissez-faire economy.

The neoclassical approach to this industry is not real because it relies solely on supply and demand. Sure, food companies are going to be adapting to supply and demand, but neoclassicism does not factor in societal issues. It is very theoretical. If the food industry were run on a maximum profit based economy without regulation, corporations would just make the worst food possible. People need to eat, so the people would continue to buy it. The gluttonous corporations would become filthy rich. This is clearly, not the case in the U.S. food economy. There are certain standards all corporations have to adhere to for the welfare of society and the protection of the common man. The neoclassical paradigm fails to factor in public health and possible revolts if it gets too out of control.

Keynesian economics is more of the reality that we live in if we are talking about the agriculture economy. There is government or public interaction to police the distribution of wealth.  Welcome back to homework everyone…