Definition of Terms: Zero Sum Game

In a recent post entitled "Barack Obama is not a socialist" I clarified the terms "socialism" and "fascism" which are constantly misused.

"Zero Sum Game" is another term one hears frequently these days. There are actually two meanings for this term. One is best exemplified by a game of monopoly. In Monopoly you can only win as much money as comes with the Monopoly game. The more you take from your opponents, the more you have and the less there is in the pot, but the total amount of money available never changes.

That's how a lot of people think of our economy. The more money we make in the U.S., the less money the rest of the world has because, in this faulty way of economic thinking, there is only so much wealth to go around. That is one definition of Zero Sum Game.

The truth, however, is that economics is like weather. It is constantly changing and nothing about it is finite. It is entirely possible for wealth to increase for everyone at the same time, as it more or less did during the Reagan years, just as it is possible for wealth to disappear for everyone, just as it did during the Roosevelt years.

That loss of wealth during the Roosevelt years brings to mind the second definition of Zero Sum Game. It's the process by all the productive people of the world end up with no money if Barack Obama wins a second term.