See “folk economics” and Bryan Caplan’s research for evidence of zero-sum bias. And Robert Wright’s Non-Zero for a discussion of how human progress has come from increasingly positive-sum interactions.
This post feels a bit lacking as it just briefly introduces a bias and explains why it is there, but doesn’t talk about how to overcome it or the harm that it does. Zero-sum bias results in tons of bad laws, for example. And it can be self-perpetuating—very high marginal tax rates are often justified by assuming the earner just got lucky or took from someone else. If those in the highest tax brackets are the most productive, then the disincentive caused by such punitive taxes is causing the most productive to work less—a huge cost.
High marginal tax rates are bad only if you assume that the highest earners are most productive. But are they? Don’t forget that wealth is also self-perpetuating. If I earned $1 million—whether by hard work, or by luck—then I could live comfortably off the interest for the rest of my life. In terms of satisfying my basic needs, I would have zero incentive to continue being productive. If I live off the interest, am I somehow being productive by proxy of my investment? That’s another question.
See “folk economics” and Bryan Caplan’s research for evidence of zero-sum bias. And Robert Wright’s Non-Zero for a discussion of how human progress has come from increasingly positive-sum interactions.
This post feels a bit lacking as it just briefly introduces a bias and explains why it is there, but doesn’t talk about how to overcome it or the harm that it does. Zero-sum bias results in tons of bad laws, for example. And it can be self-perpetuating—very high marginal tax rates are often justified by assuming the earner just got lucky or took from someone else. If those in the highest tax brackets are the most productive, then the disincentive caused by such punitive taxes is causing the most productive to work less—a huge cost.
High marginal tax rates are bad only if you assume that the highest earners are most productive. But are they? Don’t forget that wealth is also self-perpetuating. If I earned $1 million—whether by hard work, or by luck—then I could live comfortably off the interest for the rest of my life. In terms of satisfying my basic needs, I would have zero incentive to continue being productive. If I live off the interest, am I somehow being productive by proxy of my investment? That’s another question.