Is wealth in a fairly non-inflationary economy a zero-sum game ... and should it be?

[wmw999 2,129]

We've had low inflation in the US for about 20 years now. We've also had an increasing accumulation of wealth at the top. It's not hard to see -- how many American billionaires were there 20 years ago?

Does that mean that there's less available for the rest of Americans? If so, what does that mean for upward mobility, and is it OK?

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[mnealtx 0]

Good question, Wendy - I think a lot of people, mistakenly, believe exactly that.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[justinb138 0]

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We've had low inflation in the US for about 20 years now. We've also had an increasing accumulation of wealth at the top. It's not hard to see -- how many American billionaires were there 20 years ago?

Considering that the dollar is worth a little more than half of what it was just 20 years ago, how do you consider that low?

[Gawain 0]

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We've had low inflation in the US for about 20 years now. We've also had an increasing accumulation of wealth at the top. It's not hard to see -- how many American billionaires were there 20 years ago?

Does that mean that there's less available for the rest of Americans? If so, what does that mean for upward mobility, and is it OK?

Wendy P.

You question does not take into account the size and growth of the economy as a whole. It's akin to saying, there weren't 6 billion people on the planet 20 years ago.

Does that mean that there's less available? I don't believe so.

What does that mean for upward mobility? I think we've seen in particular over the past 20 years, that those that rise to the top make their own way, and not through working for the same company for 20 or 30 years. Those days are gone unfortunately (and fortunately).

I was watching something a couple weeks ago, some guy who used to be in insurance was out of work, scraped together enough to open a franchise to pick up dog-poop. He found a new way.

Instead, we've allowed the fear of uncertainty to paralyze many of us. The answers are among us, not in Washington, DC.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[lawrocket 3]

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We've also had an increasing accumulation of wealth at the top. It's not hard to see -- how many American billionaires were there 20 years ago?

Does that mean that there's less available for the rest of Americans? If so, what does that mean for upward mobility, and is it OK?

Wealth is not a zero sum game. Wealth can be added and subtracted independent of wealth of others.

Most people achieve wealth through labor or ideas. Obviously, wealth is measured by the exchange value of a good owned by a person, be it a house, vehicle, art, bank account, retirement, etc. The value of these can rise or fall independent of the wealth of those billionaires.

Bill Gates' wealth does not mean that there is less money to go around. Al Gore's wealth does not mean that there is less wealth to go around. In fact, I would argue that they both have increased the wealth of the nation and world by creating new markets.

Microsoft runs business. Microsoft provides tools of efficiency. Efficiency preserves resources. Resources create wealth.

Simply the fact that there are so many more billionaires is, I would argue, proof that concentration of wealth in some places does not mean dilution of wealth in others. Instead, wealth is like a hot bath with hot ater running. Sure, the heat is concetrated where the water is dripping in but the concentration of heat makes the rest of the water no less hot. It just affects the balance of relative wealth.

Wealth can be added or subtracted. it is not zero sum.

My wife is hotter than your wife.

[kallend 1,635]

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Microsoft runs business. Microsoft provides tools of efficiency. Efficiency preserves resources. Resources create wealth.

Dubious.

Before we all had PCs running Windows, the USA could start from scratch and land a man on the Moon in 8 years.

Now we can't do it at all.

The office staff required to run a business, hospital, museum or NGO does not seem to have been reduced thanks to Bill G., just the reverse, in fact.

...

The only sure way to survive a canopy collision is not to have one.

[DanG 1]

We could land a man on the moon in four years if the funds were there. It is not a matter of efficiency or technical ability, there is no national will for it like there was in the 60s.

- Dan G

[kallend 1,635]

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We could land a man on the moon in four years if the funds were there.

If we were that much more efficient, they WOULD be there.

...

The only sure way to survive a canopy collision is not to have one.

[rehmwa 2]

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We could land a man on the moon in four years if the funds were there.

If we were that much more efficient, they WOULD be there.

well, NASA continues to get gutted by political game playing - so there is your source of inefficiency in a nutshell

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[Andrewwhyte 1]

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Microsoft runs business. Microsoft provides tools of efficiency. Efficiency preserves resources. Resources create wealth.

Dubious.

Before we all had PCs running Windows, the USA could start from scratch and land a man on the Moon in 8 years.

Now we can't do it at all.

The office staff required to run a business, hospital, museum or NGO does not seem to have been reduced thanks to Bill G., just the reverse, in fact.

This ignores the gains that have been made in areas such as supply that are so ubiquitous that we forget them. Organizations simply accepted supply chain times that today would result in people dying in hospitals and NGO operations.
The pace of scientific discovery has been aided by computer technology (yes some of it is Microsoft). Without it our materials use per unit would have driven the price of many items out of reach as the price of mining has risen enormously. Additionally some of those forgone savings would have been paid for by forgoing some of the health and safety gains we have made in the workplace. "Goods" such as this are often hard to quantify in the economy, but are still just as good.

[DanG 1]

No, if we needed to perfect ICBM technology (like we did in the 60s), we would be there.

If Iran built a base on the moon, we'd have men up there in no time flat.

- Dan G

[kelpdiver 2]

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We've had low inflation in the US for about 20 years now. We've also had an increasing accumulation of wealth at the top. It's not hard to see -- how many American billionaires were there 20 years ago?

Does that mean that there's less available for the rest of Americans? If so, what does that mean for upward mobility, and is it OK?

Wendy P.

Wendy, the 'game' can't viewed purely within our borders. The job market went global, and I think that's the largest component of the growing divide. The lower half is hit hard by competition. The upper half (or whatever portion) continues to do well.

When all Americans were benefitting, it probably was at the expense of others in the world.

[SpeedRacer 1]

No, wealth increases over time. It is not a zero-sum game, in fact, if some people start making a lot more money, that generally works out as MORE wealth for society as a whole.

Think about it, when Bill Gates made his billions, did it CAUSE the rest of the world to get that much poorer?

No, in fact when Gates' (and others) fortune soared, the economy as a whole improved as well.

Speed Racer
--------------------------------------------------

[kelpdiver 2]

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Think about it, when Bill Gates made his billions, did it CAUSE the rest of the world to get that much poorer?

A lot of companies fell as MS rose. So yes, a lot of people did get poorer. Some of them due to illegal actions by MS - see Stacker as an example. MS eventually had to pay them for the intellectual theft, but their company was still dead.

[DrewEckhardt 0]

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Does that mean that there's less available for the rest of Americans?

No, because we have a fiat money system in which the US government makes more money at a higher rate than our population grows.

In January 1988 M2 was 2863.2 billion dollars and M3 3719.9 billion dollars.

In January 2008 M2 was 7529.1 billion dollars. The Federal Reserve's last reported M3 was 10276.1 billion dollars in February 2006. Other people have etimated that M3 had reached 14000 billion dollars by February 2008. In those 20 years M2 is 2.62 times what it was. In 18 years M3 reached 2.76 times its former value and may now be 3.76 times it. If I were less cynical I might believe the explanation that "M3 is not relevant" instead of thinking the government was trying to hide how they were devaluing the dollar.

Official inflation numbers are that one 1988 dollar equals $1.80 in 2008. Adjusting M2 increase for inflation is 1.51X and M3 1.53X to 2.08X.

Population growth was from an estimated 244,498,982 in 1988 to 303,824,640 in 2008 meaning in those 20 years our count got multiplied by 1.24.

Ignoring most of the money supply and adjusting for inflation there was 22% more money per capita in the system in 2008 than 1988.

M0 is physical currency
M1 is M0 + bank reserves and money in demand accounts like checking
M2 is M1 + savings, money market mutual funds, and time deposits (CDs under $100,000 each)
M3 is M2 + all other CDs, institutional money market mutual fund balances, and repurchase agreements.

[DiverMike 5]

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Wealth is not a zero sum game. Wealth can be added and subtracted independent of wealth of others . . .Wealth can be added or subtracted. it is not zero sum.

To me, economics is voodoo, but if we pegged the value of wealth to gold wouldn't it be a finite resource and thus zero sum? I know we went off the gold standard in the mid 1970's, and just continue to print pieces of paper with pretend value not based on a finite resource.

And since this is in speakers corner, I'd like to close my post by saying something bad about Democrats. They have funny looking elbows which make them less patriotic.

For the same reason I jump off a perfectly good diving board.

[Gary73 8]

The wealth of a society (namely the whole world, since we're so interconnected these days) has nothing to do with how much metal is sitting unused in a vault somewhere. Wealth is the result of productivity, and the money supply should be kept in sync with it. Gold in a vault doesn't put food in your belly or shoes on your feet. Farmers and processing plants and shippers and grocers get you the food, and shoe factories and shippers and shoe stores get you the shoes. The amount of each commodity available is proportional to the level of productivity at each stage, which is proportional to the advancement of technology, which is proportional to advancements in science. Therefore, wealth is proportional to science, not metal.

So no, wealth is not a zero-sum game unless we let it be by failing to invest in scientific research and technological development. And yet, what do governments and corporations always cut first when there are economic problems? R&D, of course. Morons.

"Extraordinary claims require extraordinary evidence." - Carl Sagan

[Lucky... 0]

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We've had low inflation in the US for about 20 years now. We've also had an increasing accumulation of wealth at the top. It's not hard to see -- how many American billionaires were there 20 years ago?

Considering that the dollar is worth a little more than half of what it was just 20 years ago, how do you consider that low?

Hell, it's worth 2/3 of what it was when Clinton left office, we don't have to go back that far.

[Lucky... 0]

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Simply the fact that there are so many more billionaires is, I would argue, proof that concentration of wealth in some places does not mean dilution of wealth in others. Instead, wealth is like a hot bath with hot ater running. Sure, the heat is concetrated where the water is dripping in but the concentration of heat makes the rest of the water no less hot. It just affects the balance of relative wealth.

I think you aren't factoring the reserve's expansion/contraction of the money supply, amongst other variables. There's an essentially unlimited supply of water, money is limited and controlled.

I think those who stash cash end up stagnating the economy, of course an oversped economy can lead to inflation, but then int rates can be increased to combat that and the then the dollar wins. I still can't understand how people can doubt the Clinton fiscal initiatives and implementations, but they still do.

[Lucky... 0]

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No, because we have a fiat money system in which the US government makes more money at a higher rate than our population grows.

But if the rich suck it up so fast that that outspeeds the population growth, there goes your cash influction increase.

[Lucky... 0]

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The wealth of a society (namely the whole world, since we're so interconnected these days) has nothing to do with how much metal is sitting unused in a vault somewhere. Wealth is the result of productivity, and the money supply should be kept in sync with it. Gold in a vault doesn't put food in your belly or shoes on your feet. Farmers and processing plants and shippers and grocers get you the food, and shoe factories and shippers and shoe stores get you the shoes. The amount of each commodity available is proportional to the level of productivity at each stage, which is proportional to the advancement of technology, which is proportional to advancements in science. Therefore, wealth is proportional to science, not metal.

So no, wealth is not a zero-sum game unless we let it be by failing to invest in scientific research and technological development. And yet, what do governments and corporations always cut first when there are economic problems? R&D, of course. Morons.

Agreed. Tea baggers, strict constitutionalists and tie dye are all antiquated concepts that fundies hang on to as if they apply today.

[justinb138 0]

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We've had low inflation in the US for about 20 years now. We've also had an increasing accumulation of wealth at the top. It's not hard to see -- how many American billionaires were there 20 years ago?

Considering that the dollar is worth a little more than half of what it was just 20 years ago, how do you consider that low?

Hell, it's worth 2/3 of what it was when Clinton left office, we don't have to go back that far.

Ah, yes, the inevitable "It's Bush's fault" from you. How surprising.

[philh 0]

Increasing wealth for multiple parties does not require a zero sum game, it can easily be a positive sum game. David Ricardo discovered this in the 18th century. Its simple maths of comparative advantage. Technical innovation also means wealth can increase as a positive sum game. That doesnt mean measure of inequality cant go up and down, but there's no neccesary link to increasing wealth and increasing inequality.