Is wealth a zero sum game?

[budaho]

Hmm, i know the normal answer is no, but i think the normal rational is framed in a very misleading way.

usually i hear people say that wealth is not a zero sum game because wealth is the result of inovation. inovation causes the process of producing a commodity to require less input making the proffit greater and therefor increasing wealth. one person's invotation doesn't take away from anyone else's ability to inovate, therefore increasing one person's wealth doesn't decrease anyone else's wealth, or so the theory goes (if i got that wrong please correct me).

the problem i have with this is that it presumes that because inovation increases wealth that all wealth is created by new inovation. perhapse on a macroeconomic scale this is true. an economy as a whole might not be able be able to increase its overall wealth without new inovations. however many people increase their own personal wealth without newly inovating. they capitalize on previous inovations. even when new inovations are created they always build on past inovations. one of the oldest inovations is the idea that if you can induce people to work for less than the full value of their labor then you can claim the value of that labor as your own increased proffit, ie wealth. the implimentation of virtually all new wealth generating inovations build on this. many, but not all inovations are really ways of inducing people to work for even less of the real value of their labor. therefore i think claiming that on a micro scale wealth is not zero sum is wrong. in a given scenario (ie a given process with a given customer base and a given workforce) the ammount of wealth that is generated is constant, zero sum. inovation might not be zero sum, but most wealth isn't generated by new inovation.

[k1e0x]

Yes it is. Everyone is poorer today than they were 100 years ago and those people are even more impoverished than 100 years before that.. even worse the industrial revolution put everyone out of work because machines ended up taking all the jobs in the world away, that could have otherwise been preformed better by "good old fashioned" hard manual labor.. :rolleyes:

We should outlaw chainsaws so people can be employed knocking down trees with axes.. better yet.. outlaw axes and saws so they can employ *even* more people who can work beating down the trees with rocks. We need to save jobs and provide everyone an equal slice of wealth because it's zero sum. Maybe if we start killing off retards and Mexicans we can make even MORE money.

lol .. hehe.. ok I can't pretend I believe crap like that any longer.. how absurd.

Let me guess you didn't read that economic book I posted did you.. if you did you would know the answer.

[Roddimus]

Hmm, i know the normal answer is no, but i think the normal rational is framed in a very misleading way.

usually i hear people say that wealth is not a zero sum game because wealth is the result of inovation. inovation causes the process of producing a commodity to require less input making the proffit greater and therefor increasing wealth. one person's invotation doesn't take away from anyone else's ability to inovate, therefore increasing one person's wealth doesn't decrease anyone else's wealth, or so the theory goes (if i got that wrong please correct me).

the problem i have with this is that it presumes that because inovation increases wealth that all wealth is created by new inovation. perhapse on a macroeconomic scale this is true. an economy as a whole might not be able be able to increase its overall wealth without new inovations. however many people increase their own personal wealth without newly inovating. they capitalize on previous inovations. even when new inovations are created they always build on past inovations. one of the oldest inovations is the idea that if you can induce people to work for less than the full value of their labor then you can claim the value of that labor as your own increased proffit, ie wealth. the implimentation of virtually all new wealth generating inovations build on this. many, but not all inovations are really ways of inducing people to work for even less of the real value of their labor. therefore i think claiming that on a micro scale wealth is not zero sum is wrong. in a given scenario (ie a given process with a given customer base and a given workforce) the ammount of wealth that is generated is constant, zero sum. inovation might not be zero sum, but most wealth isn't generated by new inovation.
this assumes that innovation always creates liquid economic value, which it does not. in fact many innovations takes years and even decades before they become viewed as economically valuable to the average person.
wealth is the result of value, not innovation. the more value you create for people, the more wealth you're likely to gain from it.

[budaho]

Yes it is. Everyone is poorer today than they were 100 years ago and those people are even more impoverished than 100 years before that.. even worse the industrial revolution put everyone out of work because machines ended up taking all the jobs in the world away, that could have otherwise been preformed better by "good old fashioned" hard manual labor.. :rolleyes:

We should outlaw chainsaws so people can be employed knocking down trees with axes.. better yet.. outlaw axes and saws so they can employ *even* more people who can work beating down the trees with rocks. We need to save jobs and provide everyone an equal slice of wealth because it's zero sum. Maybe if we start killing off retards and Mexicans we can make even MORE money.

lol .. hehe.. ok I can't pretend I believe crap like that any longer.. how absurd.


nice straw man. did i say anything even remotely similar to that?


Let me guess you didn't read that economic book I posted did you.. if you did you would know the answer.

what book did you ever recomend to me? sorry if i don't religiously stalk you around the forum to follow every conversation you have with other people...

[budaho]

this assumes that innovation always creates liquid economic value, which it does not. in fact many innovations takes years and even decades before they become viewed as economically valuable to the average person.
wealth is the result of value, not innovation. the more value you create for people, the more wealth you're likely to gain from it.

interesting. but i think that's kind of what i'm saying. over a long enough time frame the sum total of wealth can be increased, not just moved around. but in a given short time frame wealth is relatively constant, so that for an individual to increase his wealth other's wealth must be decreased. some people do increase their wealth by creating new value where it didn't exist before (by inovation or not), but i think this is the exception not the rule. it seems like most individual wealth is transfered not created. even when a greater value is produced that allows one firm to outcompete another and to take over the other's share of the market, only a small piece of the now greatly increased individual wealth is new, most is transfered.

i'm not trying to judge whether this is good or bad or not, just what the dynamic is. i don't know what the original context of the concept that wealth is not zero sum was, if it only refered to the long term development that k1eox was mockingly referencing then its probably pretty correct, and i don't take much issue with that. however popular usage of the phrase has spread well beyond that, to where now i hear it all the time in reference to individual accumulation of wealth. the accumulation is justified by claiming that since wealth isn't zero sum they are not taking away that wealth from anyone else.

[k1e0x]

nice straw man. did i say anything even remotely similar to that?

what book did you ever recomend to me? sorry if i don't religiously stalk you around the forum to follow every conversation you have with other people...

Sorry, maybe I get worked up sometimes..

Economics in One Lesson by Henry Hazlitt (http://jim.com/econ/) Free online, you can get a print copy or audio book too.

Economics can get pretty dry.. but I found that book fascinating. After reading that.. you will know economics better than after 2 years of advanced economics in collage. I did.

[budaho]

Sorry, maybe I get worked up sometimes..

Economics in One Lesson by Henry Hazlitt (http://jim.com/econ/) Free online, you can get a print copy or audio book too.

Economics can get pretty dry.. but I found that book fascinating. After reading that.. you will know economics better than after 2 years of advanced economics in collage. I did.

no problem. i'll check that out it looks interesting.

[Plerr]

Wealth is, and is not (simultaneously) a zero-sum-game. By that I mean, that at any given moment, (perceptions of) wealth is finite - otherwise it could not have relevance or value.
However, at any given moment wealth may increase or decrease as well.

What determines how wealthy one person is, over another - is the percentage of available wealth they control.
So, if we have a pie representing wealth circumscribed - moment-to-moment - it's always going to be 100% even if it shrinks or grows. Should say, 300 people control an inordinate percentile of the pie...they will be substantially more wealthy than those who do not control the same amount. Taking more than your fair share, taking a bigger slice/percentage....means others invariably (mathematically) must go without, must have less available to them.