Zero-Sum People

Those who see everything in terms of “winners means there also have to be losers” assume — without knowing they’re doing so — a zero-sum reality

In game or economic theory, a mathematical representation demonstrates that the gain or loss of one participant is inversely equaled by another participant. It’s referred to as a zero-sum game — a gain for one individual is at the equal expense of another. Alternatively, a non-zero-sum game represents circumstances in which both parties can gain or lose such that the final result is not zero. The values won or lost can be monetary, but can also be in many other forms. The concept can be quite complex, with numerous variables and many potential outcomes. For example, it’s possible for a non-zero-sum game to result in enhanced personal interest that also benefits the greater good.

The term zero-sum game has become common in discussions of issues, particularly in terms of economics, governance and sometimes even politics. The positions taken one way or another can influenced by where one’s point of view is along the political spectrum and the level of quantification of details one considers. Policy wonks, for example, are very familiar with zero-sum/non-zero sum theory and application, whereas the general public invokes these without having any idea they have done so — not even knowing the existence of the theories.

Topics such as globalization, free trade and immigration exhibit this dichotomy. Those with access to extensive data can pinpoint zero-sum and non-zero-sum outcomes with accuracy. Those who are unaware of the concepts and their application, and have no idea that data even matters, will simply assert simplicities: immigration lowers wages and takes jobs from citizens, free trade moves jobs overseas, globalism and nationalism are incompatible. The implication, and often assumption, is that all of these are zero-sum games, with losses here being equalled by gains elsewhere. The data, however, prove it’s all much more complicated.

And this is really my point. While the disruptions from these topics have real consequences, mitigation and solutions are neither simple nor obvious despite what passes for common wisdom among citizens. It is obvious to those who understand the details that government has failed to help and to create opportunities for those who lost their jobs during the last four-plus decades, that business has not paid attention to wage stagnation during the same period and that vocational education for those who are not meant to be in college/university has been functionally inadequate. The distorted distribution of prosperity for forty years has resulted from these issues plus misguided tax policies that exacerbated their effects while favoring a small percentage to the detriment of many others.

That said, the overall result globally has been largely positive for many hundreds of millions of people. Which is to say, globalization, free trade and immigration represent a non-zero-sum game overall. The gains exceed the losses, but for those who lost, it doesn’t matter. They are the ones who are angry at the establishment and elite in their societies, both here and elsewhere. The rise of right-wing populism is a direct result of this anger. For them, it is a zero-sum game.

The thing to know is that a war against globalization, free trade and immigration will not fix any of this. What has been done cannot simply be undone. Bringing back jobs and wage growth will require continuation of trade and migration plus mitigating the effects for those on the wrong side of the non-zero-sum game. This will be expensive, and tax revenues will need to actually rise to help pay for it. The political will necessary is only part of the problem. The other part is ideological divisiveness that prevents this will from existing. Lowering taxes and cutting spending will not work, but those who favor such policies do not seem inclined to recognize this.

I should note that paying for remedies for the problems noted here is not a zero-sum game. In the long run it is a non-zero-sum game because the investments made up front will be repaid many times over…eventually. More people with livelihoods making more money will generate higher tax revenues that will reduce debt and deficit much faster than cutting taxes and spending can begin to do. Ironically, cutting taxes is a non-zero-sum game as well, but negative rather than positive because tax and spending cuts reduce rather than increase economic activity and growth.

Admittedly, few people process reality in terms of zero-sum or non-zero-sum. It really isn’t essential for everyday life. But understanding the basics helps clarify why populist rhetoric is of so little value. Those who see everything in terms of “winners means there also have to be losers” assume — without knowing they’re doing so — a zero-sum reality. This is negative thinking that creates anger and intolerance but no functional solutions while oversimplifying multilayered, complex issues.

Achieving positive non-zero-sum results starts by acknowledging their existence. Replacing simplistic assertions with a balance of realistic possibilities is the positive result. It’s said the U.S. has lost its confidence, but what it has really lost is the willingness to work together to actually solve issues.