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Allocation of wealth is zero-sum (self.badeconomics)

EsoteriCola"I have some serious economics training" が 投稿

https://www.reddit.com/r/ukpolitics/comments/3kvvxh/bernie_sanders_i_am_delighted_by_jeremy_corbyns/cv14zc5

R1: I saw /u/Baratheon_Economist playing in the mud outside the BE ivory tower so I thought I'd turn our attention towards him and give him a hand.

The user has mistakenly assumed that wealth is a zero-sum game. In reality most transactions or trades are inherently non zero-sum because when two parties agree to trade they do so with the understanding that the goods or services they are receiving are more valuable than the goods or services they are trading them for, you wouldn't give somebody your money if you thought that it wasn't worth the products or services it was paying for and vice versa, this is positive sum, not zero sum.

As for the classic 'you can't have infinite growth in a finite world' style argument that the user makes further down the thread without even discussing the possibilities of colonising other planets and making use of other resources the universe has to offer the argument falls flat as increasing wealth (an increase in GDP) is not necessarily tied to an increase in physical stuff e.g. more Copper in circulation.

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[–]Baratheon_EconomistEverything is endogenous 26ポイント27ポイント  (0子コメント)

Thought I was being linked for BE then.

Shit my pantaloons.

[–]Tiakoneo-mercantilist 11ポイント12ポイント  (0子コメント)

I blame Occupy Wall Street.

I get that on one hand it is really hard to put "extreme wealth inequality has a negative impact on the economy, albeit not for zero sum reasons but because it has a skewing effect on social power distribution" on a bumper sticker, but the whole "1% vs 99%" and "billionaire class" rhetoric really yanks my chains.

[–]SnapshillBotPaid for by The Free Market™ 0ポイント1ポイント  (0子コメント)

Snapshots:

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[–]Mymobileacct12 0ポイント1ポイント  (1子コメント)

Isn't it true that it minimizes total utility because the marginal value of each dollar spent generally goes down and someone down on their luck will derive much more happiness from a small sum than a billionaire adding another million? Of course it may never be negative, but it isn't value maximizing.

[–]neshalchanderman 1ポイント2ポイント  (0子コメント)

I see what you're getting at: if $1 has more utility for a poorer guy than a richer guy then buying stuff which means transfering $1 from the poorer to richer guy must reduce global utility.

The problrm is this analysis only includes one side of the exchange and doesnt capture everything that's happening to utility.

Let's look at something practical:

I sell pens for $1.

Each pen gives me 1 util of utility, each dollar 2 utils of utility.

You want to buy pens for $1.

Each pen gives you 4 utils of utility, each dollar 3 utils of utility.

You look at the pen and go, wow I can swap $1 for one pen, that increases my utility by one (you gain four from the pen and lose three by giving up the dollar), and so you buy the pen.

I look at the dollar and go, wow I can swap my pen for $1, that increases my utility by one (I gain two from the dollar and lose one by giving up the pen), and so I sell you the pen.

And, global utility?

That's risen by 2 utils. The dollar provides less utility to global utility than before, two versus three, (Yes, you're right!) but the pen provides far more, four versus one.

Economics, the pursuit of the best beneficial exchanges. :-)