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How is it short-term? Division of labor does not go away. If anything, specialization and division of labor increase as the world economy becomes more and more

How is it short-term? Division of labor does not go away. If anything, specialization and division of labor increase as the world economy becomes more and more complex and developed.

_heimdall 2y ago
I say its short term because the inefficiencies eventually get worked out and we're back to a point where we're utilizing all the resources we can make economic use of and we again have zero sum game. The zero sum game doesn't stop, we just found a way to unlock new uses or new resources such that we temporarily just compete to claim those new resources. Think of it with land. If all the land we know of is already "owned" we must compete. If we discover new land everyone can scramble to "own" that land so it is temporarily not really zero sum. Ultimately land is finite though, and we get back to a zero sum game after a brief interlude.
- DiogenesKynikos 2y ago
  The point I'm making is that it never stops being positive-sum. It remains true that it's better for everyone if everyone works together. If you halt international trade, everyone will be poorer.
  - _heimdall 2y ago
    There is presumably still a limit though. Resources can only be optimized so much, innovation and cooperation helps but that would cap out at some point.
- Kim_Bruning 2y ago
  Take a look at plots of land in your nearby city. Not all plots of land are equally valuable. Some are empty lots, others have skyscrapers on them that earn millions in rent. Your example of land as ultimately zero-sum misses something crucial: plots don't gain or lose value in isolation. The neighborhood and neighbors contribute strongly to each property's value. When property owners improve their land, neighbors also gain value - creating a positive-sum scenario even within your 'finite resource' example. This continuous cycle of improvement and value creation isn't just a 'temporary interlude' before returning to zero-sum; it's the persistent engine of economic growth in the west. Since Adam Smith articulated these principles of mutually beneficial exchange in 'The Wealth of Nations,' we haven't seen a return to zero-sum economics. Instead, global wealth has grown exponentially, despite population growth and resource competition. The evidence contradicts the idea that we inevitably return to zero-sum competition after brief periods of growth. I see you thinking, wait a minute, shouldn't we be looking at wealth per capita? Yes we should. That has gone up dramatically as well. Around 1776 when Adam Smith wrote his book, global GDP per Capita was $1012 (estimated, adjusted for PPP, 2011 dollars ), in 2022 Global GDP per capita was $15 212 (computed) [1] [1] World in data only covers 1820 to 2022 here -mostly because earlier statistics weren't detailed enough- but it'll have to do. https://ourworldindata.org/grapher/gdp-per-capita-maddison-project-database?tab=line&time=earliest..2022 https://ourworldindata.org/grapher/gdp-per-capita-maddison-p... ps. Not really related to this answer, but the time-lapse map is just really fascinating https://ourworldindata.org/grapher/gdp-per-capita-maddison-project-database?time=earliest https://ourworldindata.org/grapher/gdp-per-capita-maddison-p...
  - _heimdall 2y ago
    > When property owners improve their land, neighbors also gain value - creating a positive-sum scenario even within your 'finite resource' example There is a finite pool of property and of buyers though. Its reasonable to assume they if one piece of property gains in value others lose value because they are now less desirable. I'm not arguing the math is absolutely 1:1 in price increase/decrease. Its very easy to zoom in on one portion of a zero sum game and view it as non-zero. If costs are externalized outside the scale you're considering then it can in fact seem magical, but at the end of the day everything is connected.
    - Kim_Bruning 2y ago
      Homeowners know this statement is not true. If your neighbor's house goes up in price, yours is likely to go up too, all else being equal. - Economic interactions can create new (emergent) value, not just reshuffle existing value. Adam Smith's recognition of this fact is what gave us the current western economies, where even poor people are relatively wealthy, compared to back in his day. Adam Smith illustrated this 'emergent value' with his pin factory example: One person working alone might make 20 pins per day. But when ten people specialize and collaborate, they could produce 48,000 pins daily - not by using more resources, but through smarter organization. This 240x productivity gain created entirely new value without taking from anyone else. * Wealth Of Nations, Adam Smith, 1776 (original) , pin factory example happens to be Book 1 Chapter 1; a digitized version of a 1902 reprint can be found at : https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/Chapter_1 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...
      - _heimdall 2y ago
        > Homeowners know this statement is not true. > If your neighbor's house goes up in price, yours is likely to go up too, all else being equal. Sure, if you're zoomed into a neighborhood scale. That wasn't my argument though, scale matters. If your neighborhood sees an increase in value one across town could pretty easily see theirs go down. If your city goes up because it became more desirable for any number of reasons, other cities must be less desirable and seeing values go down. We don't have unlimited demand for real estate. Buying real estate mostly in debt buffers the zero sum game somewhat, we have a finite pool of buyers but they aren't directly limited by a finite pool of money. Edit because I forgot Adam Smith. He wrote of a fictional past and a fictional vision for the future. His examples are fine in theory but they weren't rooted in fact.

How is it short-term? Division of labor does not go away. If anything, specialization and division of labor increase as the world economy becomes more and more complex and developed.

_heimdall 2y ago

I say its short term because the inefficiencies eventually get worked out and we're back to a point where we're utilizing all the resources we can make economic use of and we again have zero sum game. The zero sum game doesn't stop, we just found a way to unlock new uses or new resources such that we temporarily just compete to claim those new resources. Think of it with land. If all the land we know of is already "owned" we must compete. If we discover new land everyone can scramble to "own" that land so it is temporarily not really zero sum. Ultimately land is finite though, and we get back to a zero sum game after a brief interlude.

DiogenesKynikos 2y ago
The point I'm making is that it never stops being positive-sum. It remains true that it's better for everyone if everyone works together. If you halt international trade, everyone will be poorer.
- _heimdall 2y ago
  There is presumably still a limit though. Resources can only be optimized so much, innovation and cooperation helps but that would cap out at some point.
Kim_Bruning 2y ago
Take a look at plots of land in your nearby city. Not all plots of land are equally valuable. Some are empty lots, others have skyscrapers on them that earn millions in rent. Your example of land as ultimately zero-sum misses something crucial: plots don't gain or lose value in isolation. The neighborhood and neighbors contribute strongly to each property's value. When property owners improve their land, neighbors also gain value - creating a positive-sum scenario even within your 'finite resource' example. This continuous cycle of improvement and value creation isn't just a 'temporary interlude' before returning to zero-sum; it's the persistent engine of economic growth in the west. Since Adam Smith articulated these principles of mutually beneficial exchange in 'The Wealth of Nations,' we haven't seen a return to zero-sum economics. Instead, global wealth has grown exponentially, despite population growth and resource competition. The evidence contradicts the idea that we inevitably return to zero-sum competition after brief periods of growth. I see you thinking, wait a minute, shouldn't we be looking at wealth per capita? Yes we should. That has gone up dramatically as well. Around 1776 when Adam Smith wrote his book, global GDP per Capita was $1012 (estimated, adjusted for PPP, 2011 dollars ), in 2022 Global GDP per capita was $15 212 (computed) [1] [1] World in data only covers 1820 to 2022 here -mostly because earlier statistics weren't detailed enough- but it'll have to do. https://ourworldindata.org/grapher/gdp-per-capita-maddison-project-database?tab=line&time=earliest..2022 https://ourworldindata.org/grapher/gdp-per-capita-maddison-p... ps. Not really related to this answer, but the time-lapse map is just really fascinating https://ourworldindata.org/grapher/gdp-per-capita-maddison-project-database?time=earliest https://ourworldindata.org/grapher/gdp-per-capita-maddison-p...
- _heimdall 2y ago
  > When property owners improve their land, neighbors also gain value - creating a positive-sum scenario even within your 'finite resource' example There is a finite pool of property and of buyers though. Its reasonable to assume they if one piece of property gains in value others lose value because they are now less desirable. I'm not arguing the math is absolutely 1:1 in price increase/decrease. Its very easy to zoom in on one portion of a zero sum game and view it as non-zero. If costs are externalized outside the scale you're considering then it can in fact seem magical, but at the end of the day everything is connected.
  - Kim_Bruning 2y ago
    Homeowners know this statement is not true. If your neighbor's house goes up in price, yours is likely to go up too, all else being equal. - Economic interactions can create new (emergent) value, not just reshuffle existing value. Adam Smith's recognition of this fact is what gave us the current western economies, where even poor people are relatively wealthy, compared to back in his day. Adam Smith illustrated this 'emergent value' with his pin factory example: One person working alone might make 20 pins per day. But when ten people specialize and collaborate, they could produce 48,000 pins daily - not by using more resources, but through smarter organization. This 240x productivity gain created entirely new value without taking from anyone else. * Wealth Of Nations, Adam Smith, 1776 (original) , pin factory example happens to be Book 1 Chapter 1; a digitized version of a 1902 reprint can be found at : https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/Chapter_1 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_I/...
    - _heimdall 2y ago
      > Homeowners know this statement is not true. > If your neighbor's house goes up in price, yours is likely to go up too, all else being equal. Sure, if you're zoomed into a neighborhood scale. That wasn't my argument though, scale matters. If your neighborhood sees an increase in value one across town could pretty easily see theirs go down. If your city goes up because it became more desirable for any number of reasons, other cities must be less desirable and seeing values go down. We don't have unlimited demand for real estate. Buying real estate mostly in debt buffers the zero sum game somewhat, we have a finite pool of buyers but they aren't directly limited by a finite pool of money. Edit because I forgot Adam Smith. He wrote of a fictional past and a fictional vision for the future. His examples are fine in theory but they weren't rooted in fact.