“Have you ever wondered,” once asked the Whispers, one of the finest R&B outfits of the 1970s, “Why to win, somebody’s got to lose?” While they most definitely knew how to lay down a solid groove, such an inquiry reveals that the Scott twins and their backup singers could’ve used a little remedial economics. Though it may be so in tic-tac-toe and personal injury litigation, the existence of winners doesn’t necessarily entail the existence of losers; the assumption that it does constitutes the shaky foundation of a huge volume of the world’s most flawed thinking.
I’ve found that, while relaxing in the UCen, a great deal of entertainment can be extracted from the building’s countless ambient conversations. I, for one, enjoy spotting abuses of economic reasoning. Though the subject isn’t hugely popular – the agony of exams and the ecstasy of facebook.com seem to be more in vogue – it is, in its occasional appearances, mangled nearly beyond recognition.
College students – and the sort of adults inclined to hang around college campuses – are, it seems, particularly given to lengthy complaints of economic injustice. All it takes to set them off is a simple article or rumor about a well-to-do CEO’s new Gulfstream or a catastrophic Third World dung avalanche. “How can these rich people hog all the money,” they wonder aloud, “When thousands are starving and I can barely make my rent?”
Evidently, storybook images of grotesque robber barons repossessing the ducats of honest, emaciated villagers die hard. If one’s financial education ground to a halt after “Robin Hood,” it’s no surprise that they believe the more money one person has, the less everyone else does. Could stealing from the rich and redistributing to the poor be the solution?
Economists refer to situations where the gain of one is the loss of another as a “zero-sum game.” Most of us know zero-sum games when we see them – for instance, one player’s victory in a racquetball match obviously means the other’s loss. Perhaps closer to home, it’s impossible to take a beer from a 24-pack without reducing the number available to your housemates, though that might well reduce the chance that your couch will be set aflame. Again.
Where we fall short, however, is identifying what is not a zero-sum game. Though often viewed as one, the distribution of wealth is, in fact, non-zero-sum: Bill Gates’ considerable holdings do not prevent others from rising through the income brackets. By the same token, if your friend’s pizza delivery acumen gets him a raise, that doesn’t mean there’s less money available in the world for you. Unlike matter, wealth can indeed be created and destroyed; it simply isn’t possible to “hog all the money.”
To visualize the point, imagine how the world, confined to a static amount of wealth, would evolve. Because the pie couldn’t grow, our cave-dwelling ancestors would have no incentive to trade. Without the benefit of commerce, they’d be eternally stuck in subsistence-driven lives, living clubbed mammal to clubbed mammal. Our ancestors wouldn’t just be cavemen; we would be too. I don’t know about you, but I find mammoth just a tad gristly.
Unaware of these facts, too many continue to blow hard about what they think is unfairly distributed affluence. Sure, this type of overheard bitching seems innocuous, but history shows that zero-sum thinking has caused genuine agony. The proponents of communism reckoned that capitalism encouraged the privileged class to bleed workers of their fair share, resulting in an ideology responsible for immeasurable human suffering. Speaking of which, let’s never forget what happened the last time an obscure political party convinced their country that a certain group was hoarding more than their fair share of finite wealth.
So put down your bows and arrows, future self-styled economic warriors of America. The genuine ignorance – and, taken far enough, genuine villainy – lies with the zero-sum thinkers.
Daily Nexus columnist Colin Marshall does, however, enjoy a well-done steak of saber-toothed tiger.