The Zero-Sum Trap

It’s not unusual to talk about zero-sum games as a political issue. Probably the most common example is in international relations, where the Trump people treat countries as ordinary business competitors: what profits them is lost to us. That’s a false analogy as we’ll discuss later, but that’s not the main point here. What we want to emphasize is that the notion of zero-sum games—where all gain is someone else’s loss—is even more pervasive and dangerously wrong than commonly believed.

There are many kinds of zero-sum examples:

  • Our progress means taking it from someone else (as just mentioned)
  • Anyone else’s progress means taking it from us (racial progress means blacks taking from whites)
  • Hurting others means helping us (the party line with DOGE).

Notice the logic runs both ways: not only does our progress require hurting others, but also hurting others can be assumed good for us!

The issue is not that such things can’t happen; the problem is assuming that they always do. The chaos around DOGE produced wild enthusiasm in Trump’s base even though there was no logical connection to anyone’s well-being (either in theory or in the One Big Beautiful Bill). Moreover, paradoxically, all the publicity about DOGE viciousness seemed to increase confidence in the unstated zero-sum assumption. “Look at all the progress in the first 100 days!”

To start with it is not surprising that a zero-sum situation is more the exception than the rule: that two different phenomena are so directly related means there is an explicit causal connection, and the costs and benefits need to more or less match up. There are such connections in budgeting decisions for example. However the connections between tariffs and anyone’s well-being, for example, are so circuitous and filled with logical gaps that no one is trying very hard to argue for them. Instead promoters fall back on a kind of instinctive belief in the zero-sum game. The more Trump talks about making others poorer, the more it must be the path of progress.

It’s useful at this point to review just how far the tariff argument is from being true. What companies are the pillars of US economic strength? They are the big tech companies that dominate market valuations, earnings, and international influence. Just eight such companies represent 40-50 percent of market valuations. What is the basis of their success? Are they winning because they can make better cheaper products that anyone else can make, so that tariffs can lead to even greater success and lots of new good jobs for US workers?

Actually not. Those companies represent technological advances that led to monopoly powers in their chosen sectors (those sectors are now starting to merge, but that’s another story). They have clear profit advantages over businesses in competitive sectors, and in fact they can force those companies in competitive sectors to bid against each other to supply them. These are primarily software companies (so they are not well-counted in balance of payment figures that ignore services) and their reason for success is technological advancement—often predicated on government-funded basic R&D—and ability to attract the best and brightest from everywhere to contribute to their success. Such monopolies are actually not new. In the good old days of American manufacturing it was the high-tech of its time. We don’t get to choose where the money is.

Tariffs have little or nothing to do with this picture. Somehow tariffs are supposed to create a new golden age for factory workers, recreating the good old days. However that is without the technology advantages that fueled the wages, without unions, and after many decades of automation that mean far fewer (and more skillled) people are needed in production. Tariffs have of course been threatened as retaliation for restrictions on tech company activities in other countries, but those are different fights over different issues. None of this means extracting blood from evil foreigners will deliver gold to Trump supporters here.

How about the benefits of white racial dominance and the deporting of immigrants? Most of the arguments for those come down to “everything they’ve gained is taken from us”. That’s easy to believe (one thinks of Vance’s performance in the VP debate where immigrants were the answer to every issue raised) but is it true? You can certainly find examples, black people promoted for their race or professions where desperate immigrants have depressed wages. But that isn’t the same as the net effect of what has happened. You can’t argue that by assuming it’s true.

What made this country’s historical success is the (relative) freedom of US society from the centuries-old societal hierarchies elsewhere. Anyone could come here and succeed. The US pioneered mass education, and its own aristocracies just didn’t have the powers to exclude that existed elsewhere. We have prospered from everyone’s contributions, people of all races and from everywhere. That there are more people in the picture does not mean everyone is poorer; historically it has made us richer. Even today the immigrant population (including the illegal part) is paying taxes, using fewer social services, committing less crime, and staffing difficult jobs (in agriculture, eldercare, and construction) that locals don’t want to do. The big technology companies are filled with immigrants and children of immigrants who are making the country richer for everyone. (As is evident from any discussion of AI for example, this is more a matter of scarce talent than outsourced jobs.)

When you think about it each zero-sum argument assumes a static world where all that matters is dividing up a fixed pot of goods. That’s where the zero-sum comes in—who is giving or taking. But the picture is completely wrong. It’s not just that the overall pot is growing, it’s that the pot is being redefined entirely. And it’s that effort—the creation of the new pot—that will determine our success as a nation. And again looking at the new corporate leaders of our economy, that new pot (as noted) is being created in large measure by immigrants and children of immigrants of all races and nationalities.

(It’s important to be careful about the conclusion here. This isn’t an argument for uncontrolled immigration or even for what rules should be applied for who gets in. It’s also not an argument either for or against any kind of affirmative action. In both cases there are tradeoffs that have to be made rationally. Every country decides how many immigrants it can absorb annually, but that decision should not be based on false stereotypes of what those immigrants represent. In the case of affirmative action, you don’t want to create new forms of favoritism, but at the same time you need to find ways to prevent existing prejudices from perpetuating past discrimination. That those subjects are out of scope here doesn’t mean they can’t be addressed.)

Government’s task is providing the environment for both economic progress and well-being of the population. A key objective is equality of opportunity, as we need contributions from all. And it is up to government to see that the two objectives—for the economy and for the population—are both satisfied. That is always a political challenge.

Government structure is important. That the private sector will miraculously do it all is a myth understood perfectly even by Adam Smith. That myth only persists (without evidence) as an excuse for government to neglect its second objective—for the population. Expecting arbitrarily-powered dictatorship to be more dynamic and effective is even worse—for reasons that are already evident. Dictators make uncorrectable mistakes and ignore what they don’t want to hear. We’re cutting basic research in all domains and treating climate change as treason, exactly what we don’t need in a technology-based world economy. That hurts BOTH the economy and the population. By our own history, democracy is a good thing.

Finally we need to return to the issue we started with—international relations. Are nations just a bunch of business competitors fighting for market share? The answer is no, because we all share one world and there is an enormous (if not always recognized) common interest in making it work. Without thinking hard we are all confronted with the pressing problems of climate change and the ever-present threat of war. Chaos risks disaster. And there is a positive push also. Over the past decades we have proven that by cooperation (admittedly incomplete) we have been to grow the pot of benefits enormously for all. This could hardly be farther from a zero-sum scenario.

Zero-sum reasoning is a big problem, because it is instinctive and can be crucially wrong. We can’t prosper by believing life is all about fighting it out for advantage. If we want to be successful the task is to build prosperity for the future—for our entire population and for the world. Nothing says that’s easy, but it’s the only game there is.

Exported and Armed Prohibition

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“Prohibition Repealed: New York Times, 5 December 1933” by cizauskas is licensed under CC BY-NC-ND 2.0

As a nation we seem to be baffled by the problems of drug-based criminality south of the border.  Why can’t those people live like us?  What makes us so superior?

For those questions it’s worth emphasizing that we used to have problems like that too.  Our problems were self-inflicted, but the phenomenon was similar.  Let’s talk about Prohibition.

Prohibition was a reactionary revolt much like what we’ve got with the Christian right today.   The heartland was able to stick it to the godless, immigrant-infested cities.  No more alcohol to corrupt our body fluids.

That repressive crusade was just too overarching to succeed.  It resulted in an immense network of criminality to meet demand.  Criminality pervaded every corner of the country, and the kingpins captured the news daily.  It could and did happen here.

Let’s compare with the situation in Latin American.  North of the border there is vast money to be made with illegal drugs, and the resources available to stop it are ludicrous by comparison.  Big surprise they’ve got a problem.  We have drug problems too, but we also have resources of the US.

What kind of help do they get?  They can’t even get us to slow down the sale of military-grade weapons underpinning the drug wars.

It’s like the wall.  Let’s just keep problems out.  We’ve exported and armed Prohibition.

Let’s Just Do Immigration

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Now that Trump has decided that the target for the total number of immigrants is unchanged, why don’t we just fix immigration:

  • Family unification is a good thing, but it has taken too much of the total, now 70%.
  • It’s sensible that some fraction of immigrants should get in based on special capabilities or other demonstrable merit.  (It’s worth noting that the current system is actually not so bad in that respect.)
  • It’s also sensible to have some fraction of immigration that is not so constrained.  You never know who’s going to be a hero, and diversity has value.  Moreover past immigrants mostly came from places where they were denied opportunities for such merit.  So a lottery system has value too.

As a default, divide it up 1/3 for each and call it even.  Otherwise negotiate the limits for a while and then call it done.  (As an interesting variant, Canada handles family unification with relationship points in the merit index.)

Additionally:

  • We need to settle DACA once and for all, because there is no value to anyone in not doing it.  Since we’re talking about merit, these are upstanding, fully-adapted, English-speaking contributors.  And their number, compared to Trump’s new annual totals, is on the order of 1%.
  • For the rest of currently undocumented immigrants, we had a bipartisan bill passed by the Senate in 2013.  That can still be a basis for work.  These people are almost all working and paying taxes.

This isn’t so hard.   It only takes the will to do it.

There remains the question of enforcement.  For that, the problem is that we’ve been postulating solutions without any serious analysis.   Politicians shouldn’t be arguing about this.  (Border control was never wild about the wall until they were told they”d better be.)  There needs to be an independent assessment of how money should be spent to enforce the law.

However one thing that is definite is that there is no excuse for mistreatment of desperate people looking to escape overwhelming problems for themselves or their families.  We can’t satisfy them all–immigration law is there to say who gets help–but that’s no excuse for treating them all as criminals or worse.