Reply To: Zero-Sum Fallacy


You might take a look at this excerpt from Murray Rothbard’s history of economic thought:

As Rothbard points out, the view that trade is a zero-sum game is entirely false. While it’s true that trade is merely the exchanges of existing goods and therefore, appears to be a zero-sum game, instead what actually occurs is that both parties gain what they subjectively value more highly than what they give up. The zero-sum fallacy wasn’t conceived to apply to the case of economic growth. It seems hard to deny that if two parties engage in a division of labor which increases efficiency so that more goods are produced (i.e., they enjoy economic growth), that both of them benefit or at least can benefit by sharing in the larger stock of goods. Growth, by definition, increases the pie.