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Economic Pie: Zero Sum Game vs Grow the Pie (or "Bake Your Own Pie, Don’t Steal Mine")
(video h/t: The Daley Gator)
Since President Obama made sure to include his usual class warfare rhetoric in this year’s State of the Union speech, I thought it would be a good idea to post a little something for “Progressives” like Obama who clearly don’t understand basic economics and think the only way out of our recession is to raise taxes and redistribute wealth.
An Economic and Philosophical Refutation of the Zero-Sum View of Wealth
by G. Stolyarov II
Special interest groups often attempt to expropriate others, justifying their actions by claiming “their share of the economic pie.” They are able to get away with violating genuinely productive individuals’ property rights by exploiting a widespread fallacy.
This fallacy is the zero-sum view of wealth, perpetrated since at least the days of regulated Mercantilist economies. Its advocates view the amount of wealth in the world as static: what one man gains, another must lose. The “economic pie” was always there, and it was always the same size. The only question for the advocates of the zero-sum view is how to distribute that pie-how to “slice it up” among the different factions and pressure groups warring for possession of it.
Under this premise, socialist and mixed-economy governments everywhere pursue the “redistribution of wealth,” lest some people become “too wealthy”-which for the regulators necessarily implies that they had seized too much of somebody else’s pie.
But the zero-sum view is deficient beyond remedy. It presumes that there exists a static “economic pie.” But how did that pie come into being? Blank-out. If one answers logically, stating that the pie had to be baked, then the entire zero-sum view is demolished. If one pie can be baked, so can two; so can three; so can five billion-if somebody desires that many pies. Every pie-and every good whatsoever-had to be produced, and produced by some particular individuals. Wealth is not a static sum; it can be and must be created.
Read the rest here.
“Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.“ ~Milton Friedman
Posted by FullMetalPatriot
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
