As we live in a “zero-sum” world… Wait, let’s hold up for a second as what does it mean “we live in a zero-sum world? Zero-Sum describes a situation in which a person’s gain or loss is balanced by the losses or gains of another person(s) or environment. In short if you were to total the gains of the persons inside the “system” by adding them up, and then do the same for the losses and subtracted the two [gains – losses] the difference will sum to “zero”. In short, there is a “beginning” and “end” therefore whatever in created in the beginning, is zeroed out in the end (yes even information has a zero-sum end; however that’s a post for another day).
For now let’s look at a story problem where we take a person that works their entire life, saves their money, has a nice retirement to Florida to watch a few beautiful sunsets (they live on the west side of the state) and pow, they keel over due to a coronary (i.e. we have a beginning and an end). Ok, let’s focus on the economics of the story for a minute as where did the money they “earned” or let’s better say “acquired” to “save” come from? Well unless they were a counterfeiter, it came from someone else they convinced to give it to them. let’s be clear, everyone has to “convince” someone else to give them something. Even stealing is the act of convincing; it’s only the “means“, [typicaly force or surprise] which differs. Also even if you’re an “employee” of a company your still convincing, as you had to pass an interview and in general you need to keep “re- convincing” your employer it’s a greater value to keep you rather then get rid of you (a lot of people don’t get this fact).
As many post boomer generations mistake this (employment) as a right, rather than a privilege, however the point is “wealth is acquired and not created“. Why is this an important distinction you ask? The simple answer is “cause and effect“. As in our example, earning was the “cause” for the “savings“, well no kidding! What’s your point you’re asking, the “effect” is someone else therefore has less saving (zero-sum) because of this. As here is an axiom for you based upon this concept “wealth can be neither created nor destroyed; only transferred“.
For many years peoples myopic view of life, missed the big picture as one man got rich in the stock market, others got poor(er). Many times this view is masked by “one to many” relationships much like a lottery where millions lose a dollar and a one or two reap millions (insurance also works the same way). Thus, losses as such are viewed as “ok” because the “pain” of the loss is minimal because it is spread out over a large population; however the net is still “zero-sum“.
This is where what is more commonly known as “Systems Thinking” is gaining popularity, however I have concerns the name will not do it justice much like “global warming” while an accurate scientific term, did not represent a clear picture to the masses. Thus my hope is there will be a rise in the concepts of “Causal Sciences” as be it an economic issue, global climate change, or the rise of social networking. The net-effect will be the same [zero-sum] as it will be a simple matter of moving what I refer to as “causal bubbles” around, whereas you might have millions of tiny bubbles count wise or you may have a few huge ones (volume based). However, the volume of all [bubbles] is finite as they are all a result of one another.
The moral to this story is for someone to win, someone must loose and in the end [which there will be one] it’s all just a zero-sum game.