Scott Sumner on Zero Sum Death Spirals

It’s actually John Burn-Murdoch on zero sum thinking, but he writes for the FT, and I do not have access to it. Bu here’s the first bit of Scott Sumner’s post:

What causes societies to fail? One possibility is that they enter a zero sum death spiral. Here’s the basic problem:

  1. Zero sum thinking causes bad economic policies.
  2. Bad economic policies cause a poor economic outcome.
  3. A poor economic outcome causes zero sum thinking.

    Rinse and repeat.

Not to be all pedantic, but I’d much prefer the ordering to be 3, then 1 and then 2. That is, poor economic outcomes cause zero sum thinking, which gives birth to bad (personal and public) policies, and these, in turn, cause other (even poorer) economic outcomes.

There are excellent graphs in the blogpost as well (and these are from a paper that was shared here earlier, please do read it):

Long story short, the lower the GDP growth that you experience up to age 20, the more likely that you will have a zero-sum mindset.

What is a zero-sum mindset?

When faced with a problem, if your response is to figure out the best solution for yourself, by viewing everybody else associated with the game as competitors rather than collaborators…

Well, then, you have a zero-sum mindset.

We have a zero-sum mindset when we drive on our streets in India, for example. Other people on the road are competing with us in a race to get to each of our homes as quickly as possible. We “win” by defeating everybody else on the streets, not by cooperating with them.

We have a zero-sum mindset when it comes to examinations (I win by scoring more than others, we don’t win together by learning as much as possible). We have a zero-sum mindset when it comes to waiting in lines. If a colleague is promoted, our first response is “Whoa, that’s one spot less for me, then”. And so on and so forth.

Note that I am not suggesting that all of us have zero-sum mindsets in all situations, nor am I suggesting that this problem is uniquely Indian. But I am suggesting (very much so) that we do experience this problem every now and then.

And the hypothesis that is being discussed is that this is probably because we (people my age and older, at any rate), grew up in a low-growth environment. Do younger folks in India have more of a non-zero sum game mindset? Do younger and more affluent folks in India have more of a non-zero sum game mindset? Do younger folks who grew up abroad but are now studying in India have even more of a non-zero sum game mindset?

Somebody should research a topic like this, no?

Such a person may wish to begin by reading an excellent book called “The Moral Consequences of Economic Growth“, by Benjamin M. Friedman.

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