It occurs to me that the primary difference between the Right and the Left (or libertarians and statists, as the case may be) has to do with the question whether the pursuit of wealth is a zero-sum game.
The Right will argue that the pursuit is not a zero-sum condition and use this premise to form the case for the free market, while the Left will argue that the pursuit is a zero-sum game and use this premise to form the case for widespread government intervention. One could speculate that if the Right viewed the pursuit as a zero-sum game, they would respect the case for statism more; and, likewise, if the Left saw the pursuit as a non-zero-sum game, they would respect the free market more.
In attempt to get to the bottom of this divide, then, it seems necessary to understand exactly why the two sides see the situation so differently with respect to it being zero-sum. Is either one right and the other one wrong? Is it possible that they’re both right or wrong and they’re just using different definitions of the term ‘zero-sum’?
I have a hypothesis, but would love to hear what anyone else on this forum has to say about it as well. Your input is appreciated.
I’d just like to point out that there are people on the Right who also tend to view wealth as a zero-sum game. They just view it in different terms from how people on the Left view it. Instead of viewing it as a zero-sum game between socioeconomic classes, those on the Right tend to view it as a zero-sum game between geographically distinct groups of people (e.g. nations) and/or between organizationally distinct groups of people (e.g. corporations).
Autolykos, good point about those on the Right. One premise of this discussion must be that the term ‘zero-sum’ has become rather ambiguous and as such the cause for much misunderstanding in debate.
Question: How would you define ‘zero-sum’, and how does that differ from the definitions of others?
What Autokylos said. Both “sides” fall prey to the same fallacies, they just manifest in slightly different arguments. As for 'why", the most likely reason is that none of them have ever spent a moment of honest thought on the subject. All you have to do is look around to realize that we’re better off now than a a hundred years ago.
edit: I don’t think they use the term ambigiously at all. I think they have no capacity for understanding capital, investment, or mutually beneficial trade.
Yes, that would be safe to say. There is only one possible definition of zero-sum. Gains are offset by equal losses. It’s a convenient enough term that the definition is pretty much evident just from considering the words contained in it. Pursuit of wealth cannot be zero-sum. Even in an individual transaction one party could have buyer’s remorse but utils don’t exist so you can’t construct a zero-sum formula for the system.
No, thanks to the Fed! Sorry, a little inflation humor there.
Seriously, assuming 0 inflation, then the collection of money is a zero-sum game. If there’s a million dollars in existence then there’s only ever a million dollars in existence regardless of distribution. But money isn’t the same as wealth, and we can still become wealthier with stable money.
You’re close. I think the zero-sum game fallacy certainly plays a large role. But I think the real difference runs much deeper than that. I think this does a nice job looking into and explaining it…
Cporter, there’s nothing like a little inflation humor to get the day started right!
But I think this gets to the heart of the problem. For all intents and purposes, the pursuit of money is a zero-sum game. If one person gains some amount of it, another person must lose an equal amount. It is only valuable if it retains this key characteristic (which is why inflation is so harmful to a currency).
The problem is that, in an interdependent society, obtaining money has become an essential step to the goal of obtaining wealth. Whereas wealth is plainly non-zero-sum, there is a zero-sum barrier in front of it. And this, in my estimation, is what makes the pursuit of wealth seem like a zero-sum game.
You may have touched on it right there. People understand that money itself is zero-sum…but they lack the understanding to go just one level deeper and realize that doesn’t matter…as wealth is not. And wealth is what is important. They don’t get past “stage 1” (another h/t Thomas Sowell.)
But I still say the difference between Right and Left / libertarians and statists is the conflict of visions about what man is.
I would sum it up in basically that, the leftists/statists operate under the belief that man is a virtuous creature…and that the only problems in the world stem from the institutions we currently have…and therefore if only we could set up the right institutions, all the world’s problems would all but completely disappear (unconstrained vision). Conservatives/libertarians essentially believe that it is man himself that is flawed, and that therefore there is no such thing as the “right” institutions, because no matter what you set up, it will still be flawed man running them…so there is no solution, just tradeoffs (constrained vision).
But I would take it from Sowell himself. Here’s a short clip where he answers it at the end, and here’s a great interview, which is lengthy, but which you should definitely make the time to watch.
Zero sum means “for every winner, there is a loser.”
And that’s how Marx described the world. The evil Capitalist wins [=makes money] by exploiting [=not paying what he is worth] the helpless losing worker.
This zero sum thinking is also implicit in the constant whining about less and less people owning more and more of the wealth. Now if the rich get richer by stealing from others, as in Bush and Obama’s bailouts and other govt meddlings [which ultimately boils down to violence], then of course the complaints are justified. But no mention is ever made of WHY the disparity is increasing. It is seen as a bad thing no matter what the cause. That’s because there is a zero sum game assumption. If the rich got richer, they must have taken it from the poor somehow or other.
AE sees it all differently. Every voluntary economic transaction means, by definition of voluntary, that the two parties would rather do the deal than not do it. Without coercion. Meaning they both feel they gain by making the deal. So there are two winners, always, not a winner and a loser.
Not only that, Marx’s analysis of how the capitalist makes money is flawed. AE shows that both the worker and his employer win. Of course that’s a technical discussion. Look around the site for more about that.
In addition, AE points out that the rich are indeed getting richer from the free market, but the poor are getting richer too. Everyones standard of living rises in a free market. This assertion needs proof, obviously, and it’s here on the site.
In consideration of your point about the root of the conflict, I would agree that there is a fundamental difference in the way that those on the Right and those on the Left view man. But I would also argue that that this difference isn’t based on some inherent difference in their composition. It is based in a different perception of the world, and, it seems to me, that this different perception boils down to their view of wealth (i.e., whether it is a zero-sum condition). It could be that this concept and that of the conflicting visions is the same. I’ll have to read the book to find out.
I would contest the notion that man is inherently flawed and that the best we can do is hope we choose the right trade off (paraphrasing Sowell). Doesn’t that kind of mentality lead to apathy and unproductiveness?
Thanks for your input. You seem to be well-versed in Austrian Economics and have obviously spent a good deal of time on these boards. Perhaps you can help to clarify a point that I’m trying to understand: We all can agree that the pursuit of wealth is not zero-sum (as you point out, wealth has grown for everyone over the last few centuries).
But there are those that still see the pursuit of wealth as a zero-sum game. As I understand it, they believe this because, in an interdependent society, everyone needs to obtain money to obtain wealth, and the pursuit of money is a zero-sum game. And so, they must go through the zero-sum game of money in order to get to the non-zero-sum game of wealth.
I want to be clear…I’m not saying the difference in how they view man is the result of some difference in their genetic or neurological make up, or some kind of biological difference that entices them to believe a certain way or something like that. It’s simply like you said, a different worldview…but what I believe Sowell is arguing is that this differing worldview is the result of a differing vision of the nature of man. In otherwords, they don’t view man differently because they view the world differently…it’s the other way around.
Yeah, and definitely watch that full length interview. It’s always helpful to hear the author discuss his own work.
I don’t find that to be the case. Would you really try to argue that man is a perfect creature, always acting rightly, justly, morally, and kindly…in the best interest of the entire universe? Because unless you are prepared to argue that contention, then you have to accept the notion that man is not perfect…and therefore ipso facto is flawed.
Wealth is zero-sum on a short enough time horizon. In a failing economy, wealth is even negative sum (everyone is, generally, getting poorer).
I think the “zero vs. positive sum” debate can actually be a red herring from the real issue - the dual morality implied in any wealth redistribution scheme. Debating whether wealth is a zero-sum or positive-sum game reduces the discussion to a polite rivalry like that between horse-bettors. In fact, the issue at hand is much more visceral and the consequences of persuading the popular consciousness on this issue are difficult to overstate.
In the first place, it is a myth that the Prince (government) taxes the wealthy to help the poor. The Prince taxes everyone to help himself. To the extent that the Prince taxes the “wealthy” more than the “poor” this is only to say that the Prince cannot tax the unproductive since there is nothing to be taxed and, therefore, his burden must fall on the productive. The term “wealthy”, then, should really be “productive”… the Prince taxes the productive and subsidizes the unproductive class which, thus bribed, stands ready to riot along with the Prince should the productive class begin to protest by refusing to produce. Look at the recent riots in Egypt, this dynamic was painted out in black and white. Pro-government “protestors” out in the streets armed by Mubarak himself with whips and bats, riding horses and camels, while the business class was being interviewed on State television complaining about the riots and admonishing everyone to “just go home”.
The political elites - all of whom are very wealthy - far from being “taxed” are themselves the tax-collectors - in Roman times they were called “tax farmers”. The modern corporate structure can be understood as essentially a branch of the Internal Revenue Service. Its job is to enforce the tax codes to the most stringent possible interpretation and collect the taxes on a monthly, bi-weekly, weekly or even daily basis. The corporation will not tolerate the possibility of even the slightest legal liability to the IRS on behalf of its employees. Employers never under-collect but regularly over-collect taxes on behalf of the IRS and it is the same in every country. The Prince is, necessarily, the wealthiest person by far in his realm… anyone else approaching his wealth would automatically be perceived as a threat and be killed, driven out or plundered.
Also, let’s dispel the notion that equality is the purpose of redistribution. Firstly, equality far transcends material wealth - a congenitally blind person will never be “equal” with his peers no matter how many free meals he receives. Secondly, let’s say all wealth is zero-sum. Nobody gets wealthier or poorer over time, people born wealthy remain wealthy and people born poor remain poor. We (naturally) suspect that such a system could only arise through some sort of systematic injustice and it is precisely this suspicion that is supposed to be the motivation for redistribution to create “equality.” In other words, the outcome of a social order is an indictment of the systematic injustices within that social order. But redistribution is precisely a systematic injustice! The whole argument is an attempt on the part of the Prince to argue that his systematic injustice (taxation, redistribution of wealth from others to himself) is justified by the “need” to fix a supposedly greater injustice, the “unqueal distribution of wealth.”
Finally, the proponents of wealth redistribution through the agency of the Prince ignore the wealth-centralizing effects of the very system they espouse. Look at the trillions of dollars which are sucked up by the Military-Industrial Complex and spent on sweetheart contracts to companies owned by members of the Good Ol’ Boys club. Look at how the big-box retailers target social security and welfare recipients and how the big-name pharmaceutical companies target medicare recipients. It’s like a big money pipe right from the IRS to these ultra-wealthy owners of the major corporations. Look at the multi-trillion dollar bailouts of the big banks… Lloyd Blankfein is not a creature of the market, he is a creature of the State.
To see egalitarianism more thoroughly dismantled by the master of anti-egalitarianism (Rothbard), read this.
