The zero-sum fallacy 2


Authoritarian thinking of the right and left often relies on the assumption that “your gain is my loss.” The supporters of ICE think immigrants are taking jobs away from them. If enough people are deported, they think, there will be fewer people competing for the same jobs. The left’s version is that there’s a fixed amount of wealth to go around, and if the people who make the most are taxed heavily, that’s more money for everyone else with no downside.

These are both cases of zero-sum thinking. They assume that the amount of a resource, such as jobs or spending power, is a given and that the only question is who will get it. They think that taking resources away from others means more for them. In some cases, there’s a factual underpinning to that kind of thinking. The conservation laws of physics say we can’t create matter or energy out of nothing. The amount of air and water in the world is pretty much fixed. But most of the things we rely on are the products of human effort. Many didn’t exist till someone invented them.

It should be obvious that the supply of jobs isn’t static. The population of the USA and the world has grown over the decades. If there were only as many jobs today as in 1900, most people would be out of work. Businesses like to expand, and when there are people around who can do the work, employers will offer them jobs. When there are more people working in one area, it can actually increase the number of available jobs in other areas. When there are more farm workers, there hopefully will be a bigger crop, which means more people are needed to process, package, and ship the food.

When people get rich in a business — provided they’re selling things on a free market and not prospering from governmental favors or defrauding people — it means they’re selling things which people want. This means more for everyone involved in the supply chain, and the buyers are satisfied.

Why do people believe there’s a fixed amount of pie to slice up? In the short run, it can look like that. Economic progress is rarely smooth. Sometimes things get worse. Individuals can lose even when the economy is improving. When they do, people look for somebody or something to blame. It helps if they can identify a class of people different from themselves, such as immigrants.

Zero-sum thinking has a nice simplicity to it. It’s like competition in a sport; if one side wins, the other loses. The idea that competition can benefit everyone involved runs against that notion. People look for enemies. They need to tear someone else down to improve their own lot, or so they think.

Showing people the win-win possibilities of a dynamic society can be a hard sell.


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2 thoughts on “The zero-sum fallacy

  • Dann

    Respectfully, I disagree based on the scale and context of the current immigration problem. What you are saying ignores many second order consequences resulting from an open border policy.

    We have learned that importing large numbers of low-skill workers dilutes the ability of existing low-skill workers to receive higher wages. That even applies to people legally immigrating under the H1B program who are higher skill workers. In both categories, employers like to say that they can’t find enough workers.

    That isn’t true. They can’t find enough workers at the wages that they are offering. The workers exist, but they want to improve their social/economic status along with the corporate board of directors. Importing workers who will accept a lower wage harms native and naturalized citizens by reducing their economic leverage.

    We have seen that a flood of immigrants causes a shortage in housing/apartment inventory. In a very short period of time, a local, nice 2-BR/1B apartment has gone from $800 per month to almost $1400 per month in roughly 5 years. There are more people competing for a constant inventory which has resulted in significant rent inflation.

    Lastly, we have seen that the American taxpayer is footing the bill for a lot of this. NGOs funded by the federal government routed some of that federal largesse to help people make the trip to the US. (the rest of that money seemly finding its way back into the pockets of elected politicians) Once here, Many immigrants are given free housing, food, and cash. The impact on local services ranging from schools to hospitals is not trivial.

    This arrangement incentivizes the importing of those least likely to significantly improve our country.

    I’m not advocating for a full closure of the border. I think we need to know who is coming into the country to avoid importing criminals and terrorists. We need to control the pace of immigration so that resources (housing, schools, hospitals, etc.) have the ability to gradually grow to accommodate the new demand. We need to prioritize those who are prepared to assimilate into an American culture over those who just want a paycheck. We need to prioritize immigrants with valuable skills.

    Regards,
    Dann
    Tolerance always has limits – it cannot tolerate what is itself actively intolerant. – Sidney Hook (1975). “Pragmatism and the tragic sense of life”

    • Gary McGath Post author

      Dann,

      Thanks for keeping me on my toes, as always. Right now my thoughts are occupied with an important person in my community who just died and what I’m going to write on that, so I’ll have to settle for a quick response here, on just one of your points.

      I don’t think immigration is near the top of reasons for the housing problem. The big issue is government regulation, which has been especially hard on traditional small landlords. I’ve been a landlord twice in the past decade, without wanting to. In one case I couldn’t find a buyer for my old condo, and in the other I had to wait for a lease to run out before taking occupancy. They were scary experiences, though they worked out without problems. I knew that if the tenants wanted to screw me, I’d have a hard time. Under the COVID rules, if they didn’t feel like paying their rent, I wouldn’t have been able to evict them.

      New Hampshire’s legislature at one point considered a bill to prohibit landlords from using software to decide on rents. This wouldn’t be much of a problem for a large corporation; they’d just outsource the work to a place that allowed software. It would screw individuals using spreadsheets.

      And then of course there’s rent control, aka legislated housing shortages.

      The result is that there’s been a big shift toward ownership by large-scale owners, who are better able to weather these burdens. And that often means less satisfactory situations for the tenants, whether native or immigrant.