Tariffs – Is the Economy a Zero Sum Game? With Limited Good?

“Over 23% of all the goods and services made since 1AD were produced from 2001 to 2010.”

MP: It also looks like more economic output was produced in the 20th century than in the previous 19 centuries combined.

Prior to about 1650 in England, the concept of economic development (increasing per capita incomes) did not exist. People over the past several hundred thousand years hoped to survive and reproduce, but there could have been no thought that they or their progeny would somehow achieve or inherit a more productive lifestyle. The change from hunter-gatherer to slash & burn and later intensive farming took place over dozens of generations so that people were totally unaware of the changes taking place.

The Theory of “limited Good.”  It is fascinating in its explanation of why Capitalism comes under attack.  If we move away from this primitive concept that there is only “so much” to go around, and bring to bear the concept that  rather than limited wealth, there is unlimited potential for wealth, we may be able to end class warfare.

The term limited good is a concept from anthropology describing the theory commonly held in traditional societies, that there is a limited amount of “good” to go around. In other words, the amount of good luck, money, etc. available is held to be finite, so every time one person profits, another loses. http://en.wikipedia.org/wiki/Limited_good

Bunkerville did a post on the topic in 2011 which included a thought provoking piece on “limited good” from The Logical Middle.  Here is a portion of the thought provoking piece. He goes on to talk about the economic explosion in the last centuries. The roadblocks for expansion of wealth.

Redistribution of accumulated wealth may be necessary to keep the peace in tribal and feudal villages. However, the social stigma against accumulation of wealth can be detrimental to economic development when a society is capable of increasing the level of per capita production. Unfortunately, the Theory of Limited Good continues to be a very powerful myth in modernizing societies, and is often the prevailing paradigm in countries just beginning the development process.

The term was coined by George M. Foster in his 1965 article, Peasant Society and the Image of Limited Good, “American Anthropologist.” The concept has been described by Allen as the rural counterpart of the culture of poverty. The Mexican peasants (in Tzintzuntzan, Michoacán) Foster studied were seen by him to lack interest in new opportunities because of their perception of the world as a “competitive game.” This led to a high level of distrust and envy and fragile and constantly shifting patterns of alignment. ^{[1]  http://en.wikipedia.org/wiki/Limited_good}  From 2000 years of History, a great time to live

The chart below is from The Economist and shows a “population-weighted history of the past two millennia” based on “economic output” and “years lived.”  According to The Economist:

Over 23% of all the goods and services made since 1AD were produced from 2001 to 2010.”

MP: It also looks like more economic output was produced in the 20th century than in the previous 19 centuries combined

Click on graph to enlarge.

Here is part of the piece on “limited good”   Logical Middle.

The amount of goods on this earth appeared to be strictly limited. One tribe could garner a larger amount of goods only by taking it away from some other tribe; one group or family in a community could improve their position only by appropriating resources from, or enslaving, other groups or families.

Feudal societies existed in Europe and Asia for centuries with no perceptible long-term change in the per capita level of living from generation to generation. The share of the population that was relatively well-off—mostly the nobility, military, priesthood, and a small cadre of artisans and tradesmen—was always limited to about ten percent of the total because it was not possible to extract a larger share of the food supply from the majority peasant farmer population through tribute or taxation.

Peasant farmers in feudal societies, and people in hunter-gatherer societies, had little incentive to produce more food than they could consume when there was very little of value that could be obtained for that food through trade. In feudal and tribal societies, the vast majority of people had no reason to even consider increasing production above that required to maintain life.

The amount of goods on this earth appeared to be strictly limited. One tribe could garner a larger amount of goods only by taking it away from some other tribe; one group or family in a community could improve their position only by appropriating resources from, or enslaving, other groups or families.
The absence of the possibility of increasing per capita production leads to the conclusion that one can consume more only when others consume less.

To have more, you must take from people who will necessarily have less. This view, or rather this reality, gave rise to the theory of limited good, that was the prevailing paradigm in feudal and primitive societies. If there is a limited amount of goods in this world it must follow that either all people will be poor, or a small share of the population can have relative wealth by further impoverishing the others.

…

But, objection to accumulation of wealth is not just pandering to persons who oppose the social and economic establishment.

Even among people who should know better, there is a nagging feeling that Bill Gates’ billions may be the reason hundreds of thousands of people live in poverty. Likewise, the large and successful businesses such as McDonalds and Wall Mart must be guilty of something—else they would not be so rich and successful.

Economic development—an increase in the per capita production and consumption of goods and services—is, for most of us, a mysterious process. How does new wealth come into existence? Where does it come from? How can it be true that we will all be better off if we rush out and spend our money on the silliness that Madison Avenue is pushing in TV commercials?

How can inadequate demand cause recession and poverty? Don’t recession and poverty prove that demand is already too high in comparison to the supply of goods and services? Doesn’t it make more sense to believe recession and poverty are caused by low productivity? And, doesn’t it make more sense to believe that if Bill Gates didn’t have so many billions of dollars, there would be more for the rest of us?

The story goes on with examples.

The bottom line is that we need to produce more goods to sell,  if simply intellectual goods,  and more markets for Americans to prosper. Grow our economy.

We have been essentially restricted or shut out of many markets, and countries have instituted their tariffs to make U.S. products too expensive to purchase.

We are returning to a primitive mindset that of envy of those who have much. A fertile ground for the Marxist ideal. The seeds of revolution.

More at The Logical Middle

Source: https://bunkerville.wordpress.com/2025/04/04/tariffs-is-the-economy-a-zero-sum-game-with-limited-good/