The Zero Sum Idea Trap

In an excellent column, John Burn-Murdoch in the FT draws out some of the implications of zero-sum thinking,  based on the new NBER paper Zero-Sum Thinking and the Roots of U.S. Political Divides.

Among the most striking Harvard findings was the discovery that there is a strong relationship between the extent to which someone is a zero-sum thinker, and the economic environment they grow up in.

If someone’s formative years were spent against a backdrop of abundance, growth and upward mobility, they tend to have a more positive-sum mindset, believing it is possible to grow the pie rather than just redistribute portions of it. People who grew up in tougher economic conditions tend to be more zero-sum and sceptical of the idea that hard work brings success. These attitudes are perfectly rational.

…Every five to 10 years, the World Values Survey asks people in dozens of countries where they would place themselves on a scale from the zero-sum belief that “people can only get rich at the expense of others”, to the positive-sum view that “wealth can grow so there’s enough for everyone”.

The average response among those in high-income countries has become 20 per cent more zero-sum over the last century. Moreover, two distinct rises in the prevalence of zero-sum attitudes have coincided with two slowdowns in gross domestic product growth, one in the 1970s and another in the past two decades.

The same pattern holds within individual countries. Britons and Americans have become significantly more likely to believe that success is a matter of luck rather than effort precisely as income growth has slowed.

The problem, of course, is that zero-sum thinking can causally lead to lower growth because it leads to anti-growth policies such as tariffs, anti-immigration, NIMBY, low-trust, high taxes, redistribution, identity politics and so forth.

All of this is reminiscent of Bryan Caplan’s Idea trap model. See also my earlier posts on how distrust leads to more regulation, even when people distrust the government!

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