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It occurs to me that there’s a simpler way to put it: wealth creation is not a zero sum game, but wealth allocation is.
by mikeash 7y ago
It occurs to me that there’s a simpler way to put it: wealth creation is not a zero sum game, but wealth allocation is.
- leetcrew 7y agoI don't think this is a very good way of putting it. if wealth creation is disconnected from allocation, the creation part isn't really a "game" at all; there's no reward function. the second part, that wealth allocation is zero sum is literally true, but only in the tautological sense that there's no way to divide a pie such that the pieces add up to more than one pie. it's not very useful to assume you already have a pie and then decide how to divide it up when the way you divide it affects the size and kind of pie you have to begin with.
- mikeash 7y agoI think it's useful because it gets you thinking about which category various things fall into, and how they're connected. For example, business growth is usually wealth creation. We shouldn't think badly of successful businesses (unless they're taking advantage of externalities or similar). However, pay is wealth allocation. Pay going to executives versus workers versus charity versus taxes is a zero-sum game, but we're OK (for certain values of "we") with executives getting a huge slice of that pie because we're pretty sure it helps drive the wealth creation side of things by providing incentives. It gets you thinking about what incentives you need, what sort of behavior they drive, what sort of behavior we want to drive, etc. Far more useful and interesting than the typical story of "wealth is not a zero-sum game, rich people don't take anything away from poor people, The End."