Wealth Availability/Acquisition

Is wealth accumulation a zero-sum game?

  1. Yes.

    5 vote(s)
  2. No.

    11 vote(s)
  1. russ_watters

    Staff: Mentor

    This issue came up in another forum. The question is this:

    Is wealth a zero-sum game?

    By this, I mean is it required that in order for one person to get richer, another must get poorer in any economic system because the amount of wealth available is constant (at least with respect to population)?

    Please note, though the discussion will inevitably turn to capitalism vs communism, the quesiton is more broad and includes both. Certainly many people believe capitalism works this way in practice, but I want to know if all systems must work this way due to an inherrent limitation in the amount of wealth available.

    I'll just let the poll go for a little while - naturally I have an opinion I wish to discuss and a point to make.
  2. jcsd
  3. Yes...and no.
  4. absolutely not.
  5. No, because the amount of wealth is not constant. Unless if you are talking relative wealth...
  6. I mean, obviously, it is not required...but it can very easily happen.
  7. No. Imagine trying to gain wealth, having already 90% of the world's economy as opposed to .00000000001%. The efficiency of investment relies on the uncertainty it instills in the extremes of overall economy (among other factors). Moderate wealth encourages greater relative accumulation of value.
  8. There is obviously a limit to the amount of total available wealth, at any given moment, and also that the amount of wealth can change up or down. The real question is whether unlimited growth can be sustained indefinitely, and at what cost.
  9. Nereid

    Nereid 3,582
    Staff Emeritus
    Science Advisor
    Gold Member

    Duh, is there any doubt?

    Open an economics textbook, any textbook ...

    Or, use a favourite technique of mathematicians, assume wealth accumulation is a zero sum game ... leads to manifestly absurd conclusions (or, blindingly false statements about the world), ergo ...

    The tragedy is there are also well proven ways to destroy wealth, and they're always to hand whenever you feel envious or wish to emulate the dog in the manger ...
  10. drag

    drag 1,341
    Science Advisor

    Greetings !

    My answer is mostly yes and partially no.
    What I think the real issue in any society of
    any level and "wealth" is - is what that society
    THINKS of wealth and the various levels of it.
    You could be a bushman in the desert with your little
    clan and feel happy with what you are and you could
    be living in a concrete house with incredibly complex
    electronic devices all around and feel like ****
    because your neighbour got more of'em electronic devices. :wink:
    So the real question, I believe, should be - how
    is society to be educated so that the maximum possible
    amount of individuals is satisfied, without enforcing
    anything or brainwashing people in a negative way in the
    process (though "negative" is also a relative term).

    Live long and prosper.
  11. I pretty much agree with Zero's and drag's posts.
  12. *whistles*

    ***waiting to see Russ's point***
  13. I say no for the sole reason that wealth can be created. You can have an original idea for a product or service that doesn't pull money away from other sectors.
  14. selfAdjoint

    selfAdjoint 7,521
    Staff Emeritus
    Gold Member

    I think that any initial state of society will evolve into a stratified one where there are haves and have-nots. Whether you call that upper class "the rich" or "the party" or "the chiefs and shamans" it's the same story.
  15. I guess inflation could give a false sense of wealth (at least in the short term to pay off debts). William Jennings Bryan advocated unlimited coinage of silver at a ratio of 16:1 to gold. It never worked though, and America soon therafter passed the Gold Standard Act of 1900.
  16. Njorl

    Njorl 818
    Science Advisor

    In the long run, obviously not. Compare the net wealth of the world now to 1000 years ago. There are some microcosms in economics that are zero sum games, though. A union bargaining with management over salaries is an example. There are enough of these to justify the opinion that, quite often, the rich are rich because the poor are poor.

  17. russ_watters

    Staff: Mentor

    Well, this is encouraging, yet vaguely disappointing.

    Yes, of course the quantity of wealth available can't remain constant unless resources are limited. The one thing many people forget though is that coal, oil, and other things we pull out of the ground aren't the only resources. The 40+ hours a week I work is a resource. Even the sun is a (underutilized) resource.
    That's true, inflation must always be taken into account. However, in the US anyway, all income groups have been increasing faster than inflation for at least the past 40 years.

    And China, with stagnating (negative?) population growth and double-digit GDP growth is showing a similar trend (though those at the bottom in China are likely not seeing any of the benefit).
    Last edited: Feb 20, 2004
  18. Njorl

    Njorl 818
    Science Advisor

    One big perception problem is how wealth is generated. Most wealth is generated by innovation. It is not just high tech stuff like lightbulbs or computers either, crop rotation was a fabulous, wealth-producing innovation.

    The problem is, every innovation displaces people. The displaced suffer while the rest of society benefits. Innovators reap huge rewards if they can patent their work, the masses usually benefit modestly from lower prices, and a small segment suffers. We tend to blame those who suffer, but usually they are just the unlucky losers of a reverse lottery. In the past, these problems were solved by the displaced people dying out. Life was short, and innovation was slow.

    Today, innovation comes at a rapid pace, and people live a long time. This means that a significant portion of society is displaced at any time. Fortunately, we are much better about what to do with people displaced now. There is a class though, who benefit disproprotionately from this state of affairs.

    Those who make their living through investment are reaping ridiculous fortunes. I'm not talking about the entrepreneur who starts a business to fill a need that is not being provided. That person is just as much at risk of being "out-innovated" as anybody else. I'm talking about those who simply shop around for businesses to fund. Those who live solely by the work their wealth does for them prosper disproportionately from the state of affairs that causes significant hardship for many people. For this reason, capital gains taxes are amply justified. Income from labor is essentially just productive for society, while income from investment is both productive and destructive, essentially two steps forward and one step back.

  19. Can you make your point, now?
  20. russ_watters

    Staff: Mentor

    "Old money." I'm not sure I see how that harms anyone (investments are what create businesses in the first place), but certainly it means they get a free ride through life. I'm not sure what, if anything, can/should be done about it though.

    Capital gains are often seen as a way to stick it to the rich man, but to the type of person who you are talking about, thats relatively unimportant (and there are only a relative handful of "old money" types anyway). Bill Gates for example (yeah, he's "new money" but it just so happens most of his income is from the stock market too) is worth something like $50 billion depending on the stock market. Of that, he may spend 10% by the time he dies if he really works at it. As a result, only 10% gets taxed. The middle class retiree plans to spend most of what they saved up during their life in retirement. As a result, they end up paying capital gains taxes on most of their investments. I really think that for the benefit of the middle class retiree who was responsible enough to save his own money for retirement, there should be a cutoff under which capital gains do not apply. Somewhere in the neighborhood of $100k a year. Not only would that stimulate the economy by promoting investing by the middle class, it would give them an incentive to save for their future - making them less of a burden on government (and their children) when they are older.
    Well actually, since this forum leans so far to the left, I expected more answers on the "yes" side. I also expected more of the anti-capitalism sentiment to manifest there, since for some reason there are a lot of people who think communism doesn't need to follow the laws of the universe. Basically, that was my hypothesis. And it was wrong.
  21. Nereid

    Nereid 3,582
    Staff Emeritus
    Science Advisor
    Gold Member

    What was it that lead you to think that communists/socialists/Marxists/etc believe wealth acquisition is a zero sum game?

    Even Mao Zedong (Mao Tse Tung?), at the height of one of his maddest schemes (the Great Leap Forward, 1958-1960) explicitly sought to overtake the UK in steel production (for example) by liberating the productive forces and genius of the people, which were otherwise being exploited and suppressed by the evils of wealth distribution and residual capitalist thinking (I'm skating over a dozen important details, but broadly is OK).

    [Edit: corrected date for Great Leap Forward]
    Last edited: Feb 21, 2004
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