Zero Sum Game

Most leftists explicitly or implicitly approach economics as a zero sum game, in which every winner requires a loser and one party inherently benefits at the cost of another. From this philosophical foundation springs the leftist vision of wealth as something that is divided, rather than created, which explains their inclination towards redistributive policies.

In contrast, most market oriented economists are inclined towards positive sum games, in which most parties can benefit through the creation of wealth or at least the net benefits will outweigh the net costs.

A brief survey of history clearly shows that leftist zero sum game and the redistributive policies that it engenders are deeply flawed:

1. In Zimabwe, the socialist government believed that the poverty of the African majority stemmed from the land and the wealth that was concentrated in the hands of the minority white population and foreign enterprises. Accordingly their remedy was to redistribute land to the Africans and have the government seize at least 51% of foreign owned firms. Within a very short time, food and industrial output had plummeted and the African, as well as the white population faced a critical shortage of food, as well as other basic goods and services. In addition, without the jobs that the well run white farms generated for African labor, unemployment soared. To make matters worse, the government decided to enact price controls to make food more affordable, which created a black market and exacerbated food shortages. So, although the distribution had become more equal, the living standards of all parties had greatly declined.

2. In Chile, the socialist led government of Allende believe that every dollar in profit that "greedy businessmen" and "evil multi-national corporations" enjoyed was wealth created by and robbed from "deserving workers" and the "Chilean nation." Based on this vision, they nationalized the majority of medium and large enterprises, especially those that were foreign owned. With zero concern for efficiency, government run factories and farms swelled the ranks of their workers and raised the salaries of workers to combat unemployment and poverty. Productivity and output plummeted; factories that had once funded social services through their tax contributions were now costing the state billions of dollars to keep afloat. Facing a shortage in tax revenues and a dramatic increase in spending, the government started printing money, creating hyper-inflation. In order to combat inflation and keep commodities affordable, Allende instituted price controls, which predictably created shortages of basic goods and services, which was most felt by the working class.

So, in the end most redistributive regimes sacrifice economic and social freedom while doing little to address poverty and inequality. And often the intended beneficiaries of an interventionist policy are most harmed by it. We can hope that the Obama Administration will take heed of these historical lessons as he embarks on his path of radical change.

http://www.neo-libertarian.com/zerosumleft.html

http://tvnz.co.nz/world-news/mugabe-zimbabwe-land-seizures-continue-2507971