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The fallacy of composition. If everyone made more money, everyone would be better off, right? Except in order for this to happen, everyone would need to charge

The fallacy of composition. If everyone made more money, everyone would be better off, right? Except in order for this to happen, everyone would need to charge more for their goods and services, so prices would rise and the raises everyone got would be sucked up by rising prices, leaving everyone in the same place as where they started, relatively. The sad truth is that every economy must pick winners and losers. If everyone wins, no one wins. Whether this selection process aligns with productivity determines the trajectory of nations. Productivity measures actual wealth creation, and hopefully politics does not lag too far behind it.

shin_lao 11y ago
Economy isn't a zero-sum game because you create wealth.
- jackcosgrove 11y ago
  Having your basic needs met is not a zero sum game, but beyond that the economy is mostly about status. Whether you are working to attract a mate, impress your family, or build your nation, you are seeking status relative to your peers, and that's zero sum.
  - iamcurious 11y ago
    I'm not convinced. First, there are plenty of things that people are interested in that do not improve their social status neither satisfy their basics needs. Like movies. Secondly, social status is fractal in nature, each subculture considers different things valuable and you can belong to many subcultures at the same time, so it isn't necessarily a zero sum game. You can be a lowly janitor at day, but the lead player of the company of the football team at night.
    - jackcosgrove 11y ago
      Movies and other such pleasures are so cheap compared to the big line items in life. I don't think anyone studies to get into college and work a job for 40 years for the sake of watching movies. People do these arduous things mostly, I believe, for the sake of status. If you did not care about status, as many don't, you could rent a small one bedroom apartment in an inexpensive place and work an easy job to make ends meet, and still watch movies or play video games, what have you. Social status can be fractured, but eventually people come into conflict for people, places, and things. We don't live in independent streams. We fight over the best apartments, the best cars, the best mates, the best stocks, etc. Then status, money, and power come into play.
zurn 11y ago
Countries with high unionization and relatively low income differences between low end and high end workers are excellent performers. Especially if you include quality of life, free time, egalitarianism, low poverty etc instead of just average GDP per capita. See eg http://www.nationmaster.com/country-info/stats/Labor/Trade-union-membership http://www.nationmaster.com/country-info/stats/Labor/Trade-u...
- jackcosgrove 11y ago
  That's a correlation, but the causal relationship is the other way around. Unions form after a country industrializes as a response to income and wealth inequality. So you're comparing the income and wealth of already industrialized countries which subsequently developed trade unions with presumably countries that haven't industrialized yet. Indeed in the Scandinavian countries you're citing, excessive trade unionism, among other illiberal measures, in the 80s and early 90s led to economic crisis. There were economic reforms in the mid 90s which restored economic growth by paring back the role of the state and trade unions.

shin_lao 11y ago

Economy isn't a zero-sum game because you create wealth.

jackcosgrove 11y ago
Having your basic needs met is not a zero sum game, but beyond that the economy is mostly about status. Whether you are working to attract a mate, impress your family, or build your nation, you are seeking status relative to your peers, and that's zero sum.
- iamcurious 11y ago
  I'm not convinced. First, there are plenty of things that people are interested in that do not improve their social status neither satisfy their basics needs. Like movies. Secondly, social status is fractal in nature, each subculture considers different things valuable and you can belong to many subcultures at the same time, so it isn't necessarily a zero sum game. You can be a lowly janitor at day, but the lead player of the company of the football team at night.
  - jackcosgrove 11y ago
    Movies and other such pleasures are so cheap compared to the big line items in life. I don't think anyone studies to get into college and work a job for 40 years for the sake of watching movies. People do these arduous things mostly, I believe, for the sake of status. If you did not care about status, as many don't, you could rent a small one bedroom apartment in an inexpensive place and work an easy job to make ends meet, and still watch movies or play video games, what have you. Social status can be fractured, but eventually people come into conflict for people, places, and things. We don't live in independent streams. We fight over the best apartments, the best cars, the best mates, the best stocks, etc. Then status, money, and power come into play.

zurn 11y ago

Countries with high unionization and relatively low income differences between low end and high end workers are excellent performers. Especially if you include quality of life, free time, egalitarianism, low poverty etc instead of just average GDP per capita. See eg http://www.nationmaster.com/country-info/stats/Labor/Trade-union-membership http://www.nationmaster.com/country-info/stats/Labor/Trade-u...

jackcosgrove 11y ago
That's a correlation, but the causal relationship is the other way around. Unions form after a country industrializes as a response to income and wealth inequality. So you're comparing the income and wealth of already industrialized countries which subsequently developed trade unions with presumably countries that haven't industrialized yet. Indeed in the Scandinavian countries you're citing, excessive trade unionism, among other illiberal measures, in the 80s and early 90s led to economic crisis. There were economic reforms in the mid 90s which restored economic growth by paring back the role of the state and trade unions.