I’ve reprinted an essay written by the satirist P.J. O’Rourke because it hits on a fundamental economic truth when it comes to the assumptions driving economic policy, and this blog is about economics, not partisan politics. Mr. O’Rourke reveals some economic fallacies that underlie the economic and political strategy the current administration is pursuing with redistributive tax and budget policies.
Zero-sum thinking not only fails as policy in a dynamic, changing world, it diminishes the very people it is hoping to lift up. Zero-sum economics is the stepchild of the dismal science in service to the naked pursuit of political power and exploitation, while positive-sum economics is the mother of shared prosperity and good will.
From the WSJ:
Dear Mr. President, Zero-Sum Doesn’t Add Up
Is life like a pizza, where if some people have too many slices, other people have to eat the pizza box?
Given that hypocrisy is an important part of diplomacy, and diplomacy is necessary to foreign policy, allow me to congratulate you on winning a second term.
I wish I could also congratulate you on your conduct of international affairs. I do thank you for killing Osama bin Laden. It was a creditable action for which you deserve some of the credit you’ve been given. Of course the intelligence was gathered, and the mission was undertaken, by men and women who, although they answer to your command, answer to duty first. And it is difficult to imagine any president of the United States who, under the circumstances, wouldn’t have ordered the strike against bin Laden. Although there is Jimmy Carter. Thank you for not being Jimmy Carter.
But even though it violates the insincere amity that creates a period of calm following national elections, no thank you for the following, and it is only a partial list:
• Telling the Taliban to play by the rules or you’ll take your ball and go home;
• Leaving Iraq in a lurch (and in a hurry);
• Watching the EU go down the sink drain and into the Greece trap and wanting to take America along on the trip;
• Miscalculating human rights and strategic engagement in the Chinese arithmetic of your China policy;
• Being the personification of bad weather during the Arab Spring with your chilly response when you encountered its best aspects and your frozen inaction when you encountered its worst;
• Playing with Russian nesting dolls, opening hollow figurine after hollow figurine hoping to find one that doesn’t look like Vladimir Putin;
• Sitting and doing nothing like a couch potato watching a made-for-TV movie as the Castro and Chávez zombies continue their rampage;
• Hugging the door on your date with Israel;
• Putting the raw meat of incentives in your pants pocket when you go to scold the pit bulls of Iran and North Korea;
But the worst thing that you’ve done internationally is what you’ve done domestically. You sent a message to America in your re-election campaign. Therefore you sent a message to the world. The message is that we live in a zero-sum universe.
There is a fixed amount of good things. Life is a pizza. If some people have too many slices, other people have to eat the pizza box. You had no answer to Mitt Romney’s argument for more pizza parlors baking more pizzas. The solution to our problems, you said, is redistribution of the pizzas we’ve got—with low-cost, government-subsidized pepperoni somehow materializing as the result of higher taxes on pizza-parlor owners.
In this zero-sum universe there is only so much happiness. The idea is that if we wipe the smile off the faces of people with prosperous businesses and successful careers, that will make the rest of us grin.
Mr. President, your entire campaign platform was redistribution. Take from the rich and give to the . . . Well, actually, you didn’t mention the poor. What you talked and talked about was the middle class, something most well-off Americans consider themselves to be members of. So your plan is to take from the more rich and the more or less rich and give to the less rich, more or less. It is as if Robin Hood stole treasure from the Sheriff of Nottingham and bestowed it on the Deputy Sheriff.
But never mind. The evil of zero-sum thinking and redistributive politics has nothing to do with which things are taken or to whom those things are given or what the sum of zero things is supposed to be. The evil lies in denying people the right, the means, and, indeed, the duty to make more things.
Or maybe you just find it easier to pursue a political policy of sneaking in America’s back door, swiping a laptop, going around to the front door, ringing the bell, and announcing, “Free computer equipment for all school children!”
However, domestic politics aren’t my first concern here. The question is whether you want to convince the international community that zero-sum is the American premise and redistribution is the logical conclusion.
I would argue that the world doesn’t need more encouragement to think in zero-sum terms or act in redistributive ways.
Western Europe has done such a good job redistributing its assets that the European Union now has a Spanish economy, a Swedish foreign policy, an Italian army, and Irish gigolos.
Redistributionist political ideologies, in decline since the fall of the Soviet bloc, are on the rise again. Will you help the neo-Marxists of Latin America redistribute stupidity to their continent?
The Janjaweed are trying to redistribute themselves in Darfur. The Serbs would like to do the same in Kosovo. The Chinese have already done it in Tibet. Al Qaeda offshoots are doing their best to redistribute violence to places that didn’t have enough.
And Russia and China would like the global balance of power to be redistributed. Since China has plenty of money to lend and Russia has plenty of oil to sell, your debt and energy policies should go a long way toward making the balance of power fairer for the Russians and Chinese.
While redistribution—or “plagiarism,” as we writers call it—is a bad idea, zero-sum is even worse. Zero-sum assumptions mean that a country that doesn’t pursue a policy of taking things from other countries is letting its citizens down. That’s pretty much the story of all recorded history, none of which needs to be repeated. It has taken mankind millennia to learn that trade is more profitable than pillage. And we don’t have to carry our plunder home in sacks and saddlebags when we’re willing to accept a certified check.
The Chinese don’t seem to understand this yet. They think trade is a one-way enterprise, the object of which is for China to have all the world’s money. They’ve got most of ours already. Mr. President, validating China’s economic notions isn’t a good thing.
A zero-sum faith in getting what’s wanted by taking it can extend to faith itself. In some places there is only one religion. If other people have a religion of their own they must be taking away from my religion. Give up that faith, infidels.
Speaking of infidel faiths, Mr. President, please consider the message of this Christmas week—a message of giving, not taking. And consider your prominent position as a messenger of peace on earth and goodwill toward men. When you embrace a belief in the zero-sum nature of what’s under the Christmas tree and propose to redistribute everything that’s in our Christmas stockings, you’re asking the world to go sit on the Grinch’s lap instead of Santa’s.