The Zero-Sum Syndrome

© Laurence B. Winn

Apr 1, 1999

Your boss gets a budget for raises that represents a fixed percentage for everyone in the department. It's her call who gets what, and the increase is not uniformly distributed. If you knew about this in advance, would you feel cherished because of your higher-than-average raise? Would you grumble your resentment at a lower one? Perhaps you would fret that your bounty comes at the expense of another employee. That's why you may not know.

Your company has decreed that the department "head count" remain constant. Nevertheless, your boss needs to hire someone with a specific skill set. He figures he can get another employee to double up on what you do. Good bye.

The university you wish to attend has an affirmative action policy. There are only so many openings. Your qualifications are top-drawer, but you do not belong to a protected group. You get a skinny envelope of regrets in the mail.

As a director of marketing for a major widget manufacturing company, you know that you are looking at a market of fixed size. There are three other widget manufacturers in this country and a half-dozen overseas. You have tried to penetrate some of the foreign markets, but that turf is protected for native widget manufacturers. Your only option for future growth is to increase your market share. By definition, that means another company has to lose share.

Your income, your job security, your ability to secure an education for yourself and your children, your success in the marketplace are all profoundly affected by conditions which, in the absence of a frontier, have become brutally competitive.

What's wrong? Nothing. This is zero-sum economics. Enclosure brings it. (For a detailed explanation of enclosure, see First Principles.) In its strictest sense, the zero-sum game is defined by the sum of wins and losses. If you add them up, you get zero. There are no winners without losers.

Al Gore, in his 1991 book Earth in the Balance, proposes a global Marshall Plan that would have the developed countries pay for population control, deployment of environmentally benign technologies and enforcement of social justice, among other goals. Gore blames the world's current ecological predicament on what he calls our "addiction" to consumption, which amplifies the impact of industrialized populations on the environment. In a perfect example of zero-sum thinking, he wants to use the Marshall Plan mechanism to transfer wealth from the First World to the Third in an attempt to ease the burden on a finite resource.

In 1993, Business Week blamed the end of the Cold War for the emergence of a new, cutthroat world economic order. The head of a major European steel producer hurting from foreign competition told a BW reporter, "To the extent that you raise the standard of living of developing countries, you must have a corresponding drop in the living standard in the West."

Says economist Herman Daly, "The equilibrium wage under free trade will be the Third World level".

Not everyone agrees. However, we can observe a lot of nasty behavior in ordinary citizens that could be termed "Zero-Sum Syndrome".

According to a study by the AAA Foundation for Traffic Safety, reports of violent traffic incidents, which the papers call "road rage", have increased nearly 7% since 1990. According to the report, they are "rarely the result of single incidents. Rather, they seem to be the result of personal attitudes and stress in the motorists' lives." Could these include career setbacks, job loss, and the struggle to make ends meet in multi-job, multi-kid, or low-income households?

We have the single-minded pursuit of group advantage, as typified by affirmative action.

Asian immigrants to the U.S. have faced face violent, sometimes lethal, attacks fueled, at least partly, by the fear that they are taking jobs away from Americans.

A fuel-testing laboratory falsifies records to the benefit of a client. A blending and packaging company is sued for substituting base oils in the lubricant it was manufacturing under contract. An exporter, negotiating a large contract for delivery of motor oil to Saudi Arabia, insists that each bottle should be underfilled by at least an ounce. Says one businessman to a reporter. "The most important business asset in the 21st century will be a lack of moral ethics."