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Thread: Win-win denial: The roots of zero-sum thinking

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    Win-win denial: The roots of zero-sum thinking

    The roots of the win-lose view involve pessimism, social distrust, and materialism.

    Win-win denial: The roots of zero-sum thinking

    One of the basic insights of economics is that trade is mutually beneficial, making both parties better off than they were before. Its a proposition about human exchange that stretches back to Adam Smiths foundational treatise, The Wealth of Nations.

    ...The abounding growth of our global economy underscores this truth, showing how trade turns work into fellowship, as well as fellowship into flourishing. Among economists, there is almost universal agreement on the matter, whether one looks to free-marketers like Milton Friedman or welfare-state liberals like Paul Krugman.

    Yet, somehow, a contradictory myth continues to persist and pervade, one which frames economic exchange as a zero-sum game wherein one persons gain is necessarily another persons loss. In The Good Society, Actons educational film series, Michael Miller explains the fallacy as follows:



    So, if the evidence of such growth is clear, and if the academic consensus clearly corresponds, why does zero-sum thinking continue to thrive among non-economists?

    Its a question at the center of a new study in which researchers Samuel G.B. Johnson, Jiewen Zhang, and Frank C. Keil explore the psychological roots of what they call win-win denial....

    ...To understand why, the authors weigh several possibilities, concluding that much of it can be explained by specific psychological mechanisms.

    First, it appears as though many people give way to mercantilist theories of value, commonly confusing wealth for money...

    Second, many tend to project their own personal preferences and notions of value onto others, failing to observe that people do not arbitrarily enter exchanges...

    ...The study considers other possibilities as well (evolutionary mismatch, confusion over bargain quality, etc.). But while some of these may play some role, each is ruled out as a root cause....

    ...This study offers just one introductory glimpse into the roots of such thinking, but in doing so, it reminds us that our common disputes over economic issues are rooted in deeper attitudes about the human person and the basic nature of human relationships in economic life (and beyond)....
    Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.
    Louis Brandeis,Dissenting, Olmstead v. United States, 277 U.S. 438, 479 (1928)

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    One of the mistaken views of the Socialist minded person is that if someone has something or gains something it must have been taken from someone else. Most often they claim the workers and even the non-working poor although that makes little sense.

    Economics is not a zero sum game, it is a game of productivity and growth. Trade is also how Capitalism is cooperative and to mutual benefit.

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    Currency fixes the value of the exchange.
    You can have 10 billion dollars of Enron stock one day and nothing the next. You did not convert it to currency.

    A certain family artifact may have tremendous value to a person but no one else will see the same value in it.

    Win lose is the fault of those that did not convert profit to currency.

    The largest problem is those that take so much and give nothing in the specific exchange. We call them government.

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    Quote Originally Posted by carolina73 View Post
    Currency fixes the value of the exchange.
    You can have 10 billion dollars of Enron stock one day and nothing the next. You did not convert it to currency.

    A certain family artifact may have tremendous value to a person but no one else will see the same value in it.

    Win lose is the fault of those that did not convert profit to currency.

    The largest problem is those that take so much and give nothing in the specific exchange. We call them government.

    That's a large part of the problem. Win-losers believe value is objective and can be calculated. They got that from Marx who misunderstood Adam Smith. But value is subjective, such as a family artifact or Gun that killed Billy the Kid sells for $6 million.
    Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.
    Louis Brandeis,Dissenting, Olmstead v. United States, 277 U.S. 438, 479 (1928)

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