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This is just the the fallacy that the economy's wealth is a fixed pie; if I get a bigger slice, you must get a smaller one. But wealth and prosperity are not a

This is just the the fallacy that the economy's wealth is a fixed pie; if I get a bigger slice, you must get a smaller one. But wealth and prosperity are not a limited resource. I think it's fitting that the author supports this fallacy with a quotation from the Bible. I think you're overstating the fallacy. Money begets money. Yes, those at the bottom can, say, open hot dog stands and generate wealth on the side, but their take will be far lower than the wealthy capitalist who launches, say, a prestigious restaurant. The economy can be a non-zero-sum game and still have wealth accumulation at the top effectively reduce wealth accumulation at the bottom.

javert 15y ago
I agree with the first two paragraphs, but I don't think the third follows. If wealth were all relative, then people at the bottom could be "getting poorer compared to people at the top." But it's not the relative comparison that matters. The people at the top having more wealth does not cause the people at the bottom to have less wealth.
- georgieporgie 15y ago
  You're confusing two things. You are taking the fallacy, "the economy is zero sum" and attempting to lump, "wealth accumulation at the top reduces wealth accumulation at the bottom" in with it. The former is demonstrably false. Simply open the aforementioned hot dog stand. The latter may or may not be false, depending on the circumstances. A wealthy person opening a restaurant does not reduce wealth accumulation of a passerby. If, however, a wealthy person pays himself a fat bonus from his company, while cutting jobs in order to instill fear, increase production, and drive salaries down, has clearly increased his accumulation of wealth at the expense of those beneath him. The point is, you can't take the statement, "economics is not a zero-sum game" and use it as a blanket counter argument to all statements about inequality of wealth accumulation.
  - javert 15y ago
    Your post is a pretty thoughtful one, so thanks :-) I don't think your analysis is right, though. Here's why. You're equating wealth accumulation at the top reduces wealth accumulation at the bottom which is formulated as a principle (i.e., a "universal"), with If, however, a wealthy person pays himself a fat bonus from his company, while cutting jobs in order to instill fear, increase production, and drive salaries down, has clearly increased his accumulation of wealth at the expense of those beneath him., which is just a particular instance. Yes, of course you can imagine scenarios in which a particular wealthy person does something that causes a particular group of less-wealthy people to have less wealth at the time - like lowering their salaries. In fact, I think that wealth accumulation at the top reduces wealth accumulation at the bottom, stated as a generalization, is the same as the statement "the economy is zero sum."
    - gridspy 15y ago
      My take on it: If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the market will elevate the price of that material to the highest level that the rich will bear. As the price of the scarce resource increases, the poor get driven from the market. If the rich were not so rich, the scarce resource wouldn't be priced so high. This doesn't hold true for things which aren't really scarce, such as newspapers or software.
      - gnosis 15y ago
        "If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the market will elevate the price of that material to the highest level that the rich will bear." This is actually not always the case. Food prices are a prime example. It turns out that the rich often pay less for food than the poor. Take a look at some of the conclusions of this study: "Do the Poor Pay More for Food? An Analysis of Grocery Store Availability and Food Price Disparities." http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%3F+An+Analysis+of+Grocery+Store...-a064059254 http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%... The researchers conclude that the poor do indeed pay more in the Twin Cities grocery market... In part, the poor pay more for grocery products because the stores that charge the lowest prices are not located in their neighborhoods. The study has overviews of a lot of other research that supports these findings. For example, In 1991, for example, New York's Consumer Affairs Department compiled a report on grocery store price-fixing in several neighborhoods (Freedman 1991). The report showed the poor paid more for groceries in inner-city neighborhoods, yet they received poorer quality foods and services. The report consisted of price surveys in sixty stores and 140 interviews in various New York neighborhoods.
- bluedanieru 15y ago
  Wealth and political power are intimately related even within the best institutions, and that is a zero-sum game. If the distribution of wealth is heavily skewed towards the top it will wipe out the political power of the poor and solidify the social and economic hierarchies. It will subvert democracy. That sucks.

javert 15y ago

I agree with the first two paragraphs, but I don't think the third follows. If wealth were all relative, then people at the bottom could be "getting poorer compared to people at the top." But it's not the relative comparison that matters. The people at the top having more wealth does not cause the people at the bottom to have less wealth.

georgieporgie 15y ago
You're confusing two things. You are taking the fallacy, "the economy is zero sum" and attempting to lump, "wealth accumulation at the top reduces wealth accumulation at the bottom" in with it. The former is demonstrably false. Simply open the aforementioned hot dog stand. The latter may or may not be false, depending on the circumstances. A wealthy person opening a restaurant does not reduce wealth accumulation of a passerby. If, however, a wealthy person pays himself a fat bonus from his company, while cutting jobs in order to instill fear, increase production, and drive salaries down, has clearly increased his accumulation of wealth at the expense of those beneath him. The point is, you can't take the statement, "economics is not a zero-sum game" and use it as a blanket counter argument to all statements about inequality of wealth accumulation.
- javert 15y ago
  Your post is a pretty thoughtful one, so thanks :-) I don't think your analysis is right, though. Here's why. You're equating wealth accumulation at the top reduces wealth accumulation at the bottom which is formulated as a principle (i.e., a "universal"), with If, however, a wealthy person pays himself a fat bonus from his company, while cutting jobs in order to instill fear, increase production, and drive salaries down, has clearly increased his accumulation of wealth at the expense of those beneath him., which is just a particular instance. Yes, of course you can imagine scenarios in which a particular wealthy person does something that causes a particular group of less-wealthy people to have less wealth at the time - like lowering their salaries. In fact, I think that wealth accumulation at the top reduces wealth accumulation at the bottom, stated as a generalization, is the same as the statement "the economy is zero sum."
  - gridspy 15y ago
    My take on it: If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the market will elevate the price of that material to the highest level that the rich will bear. As the price of the scarce resource increases, the poor get driven from the market. If the rich were not so rich, the scarce resource wouldn't be priced so high. This doesn't hold true for things which aren't really scarce, such as newspapers or software.
    - gnosis 15y ago
      "If both the rich individual and the poor individual are competing over the same scarce source material (eg Petrol, Rice, Real Estate) then the market will elevate the price of that material to the highest level that the rich will bear." This is actually not always the case. Food prices are a prime example. It turns out that the rich often pay less for food than the poor. Take a look at some of the conclusions of this study: "Do the Poor Pay More for Food? An Analysis of Grocery Store Availability and Food Price Disparities." http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%3F+An+Analysis+of+Grocery+Store...-a064059254 http://www.thefreelibrary.com/Do+the+Poor+Pay+More+for+Food%... The researchers conclude that the poor do indeed pay more in the Twin Cities grocery market... In part, the poor pay more for grocery products because the stores that charge the lowest prices are not located in their neighborhoods. The study has overviews of a lot of other research that supports these findings. For example, In 1991, for example, New York's Consumer Affairs Department compiled a report on grocery store price-fixing in several neighborhoods (Freedman 1991). The report showed the poor paid more for groceries in inner-city neighborhoods, yet they received poorer quality foods and services. The report consisted of price surveys in sixty stores and 140 interviews in various New York neighborhoods.
bluedanieru 15y ago
Wealth and political power are intimately related even within the best institutions, and that is a zero-sum game. If the distribution of wealth is heavily skewed towards the top it will wipe out the political power of the poor and solidify the social and economic hierarchies. It will subvert democracy. That sucks.