Thursday, April 25, 2013

Zero Sum Gaming

Dennis Gartman quotes the outrageous P.J. O’Rourke:
"Mr. President, the worst thing that you’ve done is that you sent a message to America in your reelection campaign that we live in a zero-sum universe. There is a fixed amount of good things. Life is a pizza. If some people have too many slices, other people have to eat the pizza box. You had no answer to Mitt Romney’s argument for more pizza parlors baking more pizzas. The solution to our problems, you said, is redistribution of the pizzas we’ve got—with low-cost, government-subsidized pepperoni somehow materializing as the result of higher taxes on pizza-parlor owners.
In this zero-sum universe there is only so much happiness. The idea is that if we wipe the smile off the faces of people with prosperous businesses and successful careers, that will make the rest of us grin.
There is only so much money. The people who have money are hogging it. The way for the rest of us to get money is to turn the hogs into bacon. The evil of zero-sum thinking and redistributive politics has nothing to do with which things are taken or to whom those things are given or what the sum of zero things is supposed to be. The evil lies in denying people the right, the means, and, indeed, the duty to make more things."

It is hard to understand any of this. In his book "The Stewardship of Wealth" Gregory Curtis says exactly this: He says that before the Industrial Revolution the world was in a zero sum wealth straitjacket. Ayn Rand once wrote that America's contribution to the world was over this very point: "Men had thought of wealth as a static quantity, to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created." On first reading, "zero sum" sounds like a classic straw-man attack.Truly, the defects of this kind of redistribution seem so obvious that such notions like "You have enough retirement money" as the current budget declares sounds like the partial dogma of some arcane sect.

This zero-sum argument does indeed dismiss production and growth as an engine of social economic improvement. Worse, it pits the producers against the non-producers, citizen against citizen. Worst, it undermines the belief in the value of private property--one of the great precepts of the West--and allows new and shallow attitudes to redefine it. 

This is not its greatest danger, however. Its greatest danger is that it can be casually thrown out as a concept without challenge or ridicule. And that may imply the greatest damage has already occurred.

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