[lucideer]

> Wealth is not a fixed pie (PG).

I've read a fair bit of PG's writing but hadn't dug into The Pie Fallacy referenced here. Wow, what utter nonsense. I've certainly not agreed with everything PG comes out with but this is a new logical low. And it's not just the usual problem of an oversimplified analogy not accurately representing more complex systems, the analogy[0] isn't even internally consistent with itself.

[0] http://www.paulgraham.com/wealth.html#f4n

[jedimastert]

I'm also curious to know where you think he goes wrong, it's pretty well acknowledged at this point that economics is generally not a zero-sum game

[imtringued]

What is economics? Physical capital? Financial capital? Land? The human sphere of influence?

If you are generous and argue that humans help plants grow, then e.g. harvesting plants is beneficial for plants and humans and physical capital is not zero sum despite the fact that humans are intentionally killing plants and depriving them of their body.

Financial capital is zero sum, when you borrow money, you create money and debt simultaneously. Pay off all debt and you end up with zero money. Money is zero sum.

Land is zero sum. If one person owns all the land on the planet, everyone else must rent from that person or be homeless.

The human sphere of influence? I would argue that this is zero sum because a hypothetical tribe of neanderthals wouldn't be welcome in this modern world, we would never let them take over the planet, hence our domination over the planet comes at the expense of other species.

[falcolas]

Where is all this extra money coming from, if not from someone else? Inflation - the one action that actually creates more money - accounts for a pretty small part of it.

Without creation of additional money, every dollar earned is someone else’s dollar spent.

And yes, I’ve heard theories that the commodities purchased with a dollar are worth more than that dollar, but if that were true, the item would be sold for more; a “rational” capitalist would sell it according to its actual worth.

[nuclearnice1]

What specifically is over simplified, inconsistent, or wrong?

[eagleal]

Economics is too broad. For example Land and Real Estate is zero-sum, as is strictly Debt/Financial/Monetary exchange.

Some things, as with blue skies research, really do create more wealth as in overall some technological advancements make making some things cheaper, or available.

Creating debt to print capital now for making X cheaper to produce is generally good as that zero-sum is offset by the wealth/wellness created by that capital in the future (a company producing cheaper components for example).

Meta exists in a zero-sum market, as advertisers fight for the same limited resource: attention (an individual can view as much advertisement in 24H).