Reply To: If they only increased wages…


sorengaard, you wanted something simple so the model I put up was for the purpose of simplicity.. a “toy model”, meaning that it omits many aspects of reality and just focuses on some aspects.

The zero sum is connected with the savings aspect, the one I mentioned to be ignored in the model, so yes, the model corresponds to zero sum. If you want to break out of zero sum game you have to save, and then use that saving to create a new, improved reality.

If economy is nothing but zero sum game then here’s the question: how come anything was ever created? How come we are not living anymore like prehistoric people? If it was zero-sum, we’d still be like that, nothing new would happen. Even before that, how come we became people and are not bacteria anymore, if it was all zero-sum? Even before that, how come bacteria is not a cosmic dust anymore?

Obviously, we world evolves and changes all the time, so zero-sum is just one part of economic reality, and not a very happy part when it happens… for example, work of a thief is a zero sum game: a thief plus a legitimate owner have the same total amount of wealth before and after the theft.

Anyway, without saving everything gets stuck as it is. And sure, money is mostly just a bookkeeping device of all this progress… I think that theoretically, a particular society could progress from a prehistoric stage to todays stage with its money supply being totally constant, one and the same. Underneath all the flow of the numerically same amount of money, the society would slowly grow, improve in every way, have more babies, etc etc… using one day’s savings (unconsumed products) as the basis for creating something new the next day.