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>The economy is not a pure zero sum game. Why do people keep saying this? This is a huge misconception. The economy IS zero sum. Energy and physical resources
by crimsonalucard 10y ago
>The economy is not a pure zero sum game.
Why do people keep saying this? This is a huge misconception. The economy IS zero sum.
Energy and physical resources are limited. When one person uses a limited resource, than another person will be unable to use that same resource. This is a Zero Sum.
I've heard people say that seemingly "unlimited" products like an idea, a painting or an abstract idea can be created out of thin air and because of this the economy is not zero sum. Well guess what? Have you ever heard of an economy that can exist while thriving only on abstract ideas and pieces of art? No. All economies thrive on energy and physical resources while abstraction only sits on top of these things as a luxury. AKA: A farmer can feed himself with his own crops, but an artist cannot survive without trading his painting with a farmer for food.
Another cop out people use is that although the sun is technically a limited resource (it will burn out one day), it is seemingly unlimited because it outputs more energy then humanity will ever need or comprehend. This argument is flawed too. We are limited by the amount of energy we can extract from the sun. There will always be a limit to the amount of energy we extract from the sun due to fundamental limits in technology and physics.
It gets worse than this, because technically speaking you are correct.. the economy is not zero sum, it's actually a negative sum. When you add up the numbers there will always be a net loss for all economic actors. The second law of thermodynamics dictates that even if an economic agent doesn't extract or use a resource, the resource on it's own will eventually, slowly degrade into an unusable state.
- mhluongo 10y agoI have a saw, you have a log. If we bring our resources together, we can build something more economically valuable than the sum of the parts, and we both benefit. That's not a zero sum game.
- crimsonalucard 10y agoIt is zero sum. Did you even read past the first sentence of my post? The situation is much more complex, and unfortunately I can't elegantly shoot you down with one highly misguided sentence as you tried to do for my argument. Let me spell it out for you in a way you can comprehend: 1. There is a limited amount of logs that the earth can produce. 2. There is also a limited amount of metal that the earth can produce. 3. There is also a limited amount of energy that we can extract from the earth or the sun. 4. Therefore, there is a LIMITED amount saws I can build with metal and energy. 5. With logs and saws being limited, then that means there is also is also a limited amount of "things" that can be built with the logs and saws. What this all means: The totality of "things" that can potentially be built with limited resources is limited because resources are in itself limited. This totality can be referred to as our economic pie (or cake). Once a slice of pie is extracted and eaten another person cannot eat it. That is zero sum. See cake example in the very short first paragraph: https://en.wikipedia.org/wiki/Zero-sum_game https://en.wikipedia.org/wiki/Zero-sum_game
- antisthenes 10y ago"It's not zero-sum" is a popular and lazy fallacy used by economically illiterate people to argue against welfare policies. It goes hand in hand with the just world fallacy, which, in conjunction is used to justify the position of the currently capital-poor class. E.G. Because the economy is not zero-sum, those people would have been able to produce wealth for themselves with the same ease as the people who are currently in possession of wealth/capital.
- mhluongo 10y agoFor the record, I'm certainly sympathetic to arguments re: wealth inequality. I've just observed first-hand that it's possible to create value without taking something away from someone else.
- crimsonalucard 10y agoThe value was never created. It was extracted from a resource. Creation implies that it came from nothing. It is highly unlikely whatever you created came from nothing.
- mhluongo 10y agoValue is a subjective thing. Of course it can be created- if I decide to value something.
- crimsonalucard 10y agoThen when you value an apple to be one billion trillion dollars did you increase the economy by one billion trillion dollars? No. That makes no sense. There is value and then there is intrinsic value aka True value. True value is extracted not created.
- mhluongo 10y agoAh. Here you'll find you're miles from most people's definition.
- deleted 10y ago[deleted]