Life Is Not A Zero Sum Game (EP.138)

Zero Sum Game


In politics and life, we are all-too-often taught that we live in a world with a fixed amount of resources, a pie for example, and that if we want some it must come from someone else’s portion, leaving them with less. Even worse, we are told that if someone else, Jeff Bezos at Amazon or Sam Walton’s heirs at Walmart want more, that it must come from us, leaving us with less.

That deliberately false and dangerous thinking is the subject of today’s 10-minute podcast.


There are parts of life where the resources, the prizes, are a fixed size. If you want yours, then someone else gets shorted. But those are the exceptions, not the way life is designed to be lived. Sports is an example of an exception. If you win, get the pie if you will, the other person or team must lose. That’s called a Zero Sum Game. Overall, this means that if you are going to win, someone else must lose. Like in sports or gambling. If you or your team is going to win, for example, a basketball game, the other person or team must lose. You go +1, they go -1; the sum of the two is zero. Same with gambling: if you are going to win $100, someone else needs to lose $100. Again, a zero sum game.

Unlike sports or poker, life is not a Zero Sum Game. If we have a good job and get a raise, the amount of the raise does not come from our spouse. It adds to the wealth in our family. The pie just got bigger. And that’s the secret. Depending upon how we run our personal lives, and how we handle our politics, all of the pies, personal, governmental and global, can either get a whole lot bigger–or kinda stay the same size, eventually, perhaps, even shrink. Even without being eaten.

With capitalism, the pie has a strong tendency to get bigger; there’s more for everyone. The question that always comes up is whether the expanding pie is distributed fairly. Okay, Will, what does “fairly” mean? Does it mean that everyone gets the same rewards? Does it mean that you get only what you earn? Or does there need to be a governmental policy that mandates a certain level of redistribution of capitalist profits? That’s what we have now, and that’s called taxes. And we redistribute those in a variety of ways. All societies that tax also redistribute wealth and income. Some do it more than others. The only question is how much and to whom.

Capitalism is the best wealth producing engine the world has ever seen. And we must have a moral compass to steer it. All economic systems are amoral at best, and need a human-driven moral compass. How capitalist-driven income and wealth are redistributed is clearly important, but not the subject of today’s blog/podcast. By the way, the Scandanavian countries are capitalist economies, with heavy taxes, including on the middle classes, and heavy redistribution. Those countries are not socialist.

Today’s Key Point: Politicians and other sources are telling us two self-serving, dangerous lies: 1. If Sam Walton’s company, Walmart, which he started on a shoestring, makes money, they got it from you.  2. If you want to improve your life, money must come to you from the “1%” via taxes for you to have a fair shot. These lies are yet another way to pit us against each other to their advantage. This kind of class warfare, along with identity politics and intersectionality (teaming up certain identity groups against others) are designed to force us to choose sides. And the ones pushing these dangerous lies are betting that more people will buy into their falsehoods and vote for them than not.

Let’s take lie 1 first. On the rare times that I shop at Walmart, I get a fair deal. And as the saying goes, “A fair exchange is no robbery.” The same thing is true when I use electronics to buy from Amazon. I get a fair deal, so I buy. Walmart and Amazon both win when I buy, as do I.

Onto no lie 2. I don’t need to go get anything from the so-called 1% to get what I want, to achieve my goals; I need to know what I am doing, then work hard over time. And I certainly don’t need or want to tax them additionally, with the intention of simply giving the cash to me. Or whatever money is left over when the government takes its slice out for simply collecting the cash and handing it out.

The opposite of a zero sum game, where you or I win and the other must lose, is win-win or no deal game. Outside of areas like sports or gambling, win-win or no deal is the gold standard. And that’s true in relationships, business, government and internationally.

Imagine trying to win in a relationship by “beating” the other person. In the business world, can you win by beating a “good deal” out of your suppliers or employees? Of course not. And unlike poker, where the total amount of money on the table does not grow–it simply changes hands–in business the whole pot can grow. That is one of the reasons that more than one person can win at the same time. In life, it is not +1 and -1 equalling zero; it is 1 + 1 = 3–or more. Much more.

The lessons we can learn from the world of zero sum games are important, and carry over into the world of win-win. Learning how to win, how to work hard and commit to a goal over time, will help to create a successful life. And you can’t learn how to win if there is no such thing as losing. Without experiencing the sting of losing, no one will make the sacrifices necessary to earn the joy of winning.

It is dead wrong to claim that in order to win, someone else must lose. BTW, if someone else does lose, that is not a guarantee that you will win. Taking a zero sum game approach to life might cause both of you to lose. Remember: It is a win-win or no deal.


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Links and References

Quality of Life or Comparison of Lives? (EP. 126)


Economics Definitions (EP. 57)






Will Luden
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2 Responses

  1. Stephen Smith Reply

    This is a subject I am always talking to my kids about. When I hear people complaining about how many yachts somebody has I immediately think of how many careers are supported by building those yachts, mooring them, repairing and the myriad of other services required to keep the yacht floating.
    In “The Richest Man in Babylon” George Clason uses building a house as his example for growing the pie. Because the owner gives money to the builders to build the house but ends up with a house which still has value, so the exchange of goods for services ends up doubling the size of the pie.

    I like the new introduction, it feels more personal.

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