Monday, January 12, 2015

Invention and Zero-Sum Game

The slogan 'A rising tide raises all boats', sometimes advanced in defense of Capitalism, seems rarely to be accompanied by an explanation of how the rising tide occurs. Absent the latter, the formulation is vulnerable to the following argument: 1. Economics is a zero-sum game; 2. In a Zero-Sum Game, there is a one-to-one correspondence between Profit and Loss; 3. Therefore, not all boats can rise. So, a denial of #1 is the beginning of one response, while another is to restrict the scope of the 'game' to human affairs, i. e. by leaving open the possibility of an increase from without, e. g. from non-human Nature. Now, the commonest example of the latter is Invention, in which raw materials are transformed into some useful product. So, technological innovation, as opposed to, say, entrepreneurial ingenuity, is one, and, perhaps, the only, theoretically sound source of general benefit.

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