Social reorganization

CSGnet Archive CSG2011
1

[From Rick Marken (2011.1.1.0910)]

Happy New Year!!

Gavin Ritz (2011.01.01.15.30NZT)

Rick Marken (2010.12.31.1745)--

RM says: It has to do with
the fact that the economy is basically a zero sum game.

GR: Show me the inference rules (that trueify this statement) that prove this
declarative statement to be true.

According to Wikipedia: "In game theory and economic theory, zero-sum
describes a situation in which a participant's gain or loss is exactly
balanced by the losses or gains of the other participant(s)".

This has been my understanding of the meaning of "zero sum game" as
well. The economy is a zero sum game for the reasons I give in the
next part of my post, which you quote:

If 90% of GNP goes to the top 1% then only 10% of GNP can go to the bottom 99%.

GNP is the $ value of all the goods and services produced by an
economy in a year. So GNP is the total wealth available to the
participants in the economy (the population of the US, for example).
If GNP is divided so that a fraction goes to the "top" people (T) and
the balance goes to the "bottom" people, B, then GNP = T + B. The
economy is a zero sum game because, as T increases B must decrease
(and vice versa). So if the T share of GNP increases this will be
exactly balanced by a decrease in the B share (you can check this
using computer simulation if you like; I had to use a spreadsheet;-)
and the participants receiving the T share of GNP will see a gain that
will be exactly balanced by the loss to the participants receiving the
B share.

This zero sum characteristic of an economy holds true even though the
size of GNP is typically increasing from year to year. I leave that
proof as an exercise (hint: a spreadsheet will come in handy again).

RM: That causes unnecessary hardship for people (see The Spirit Level: Why
Greater Equality Makes Societies Stronger,� Richard Wilkinson, Kate
Picket). It also removes demand from the circular flow (see Leakage,
T. C. Powers) and it's unnecessary to boot (see The Winner-Take-All
Society: Why the Few at the Top Get So Much More Than the Rest of Us,
Robert Frank, Philip J. Cook).

GR: Ive read most of these books and can't find any statement that can be tested to
show your above statement is true.

Maybe they didn't include them in the New Zealand editions.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

2

[From Bill Powers (2011.01.01.1025 MDT)]

From Rick Marken (2011.1.1.0910) --

The economy is a zero sum game for the reasons I give in the
next part of my post, which you quote:

> If 90% of GNP goes to the top 1% then only 10% of GNP can go to the bottom 99%.

...

This zero sum characteristic of an economy holds true even though the
size of GNP is typically increasing from year to year. I leave that
proof as an exercise (hint: a spreadsheet will come in handy again).

The conservative response to this idea is "A rising tide lifts all boats." If the 1% of recipients spend some of their 90% of the GNP on improving the quality of life for everyone, then of course the other 99 percent of the population do find their quality of life improving (while that of the 1% improves nine times as fast). So the game is not zero-sum because the sum keeps increasing.

Of course the 1% don't spend their own income on the business or to pay the workers. The business spends its income, and uses other people's money to start up and expand, not the CEO's salary. Salaries are a business expense. If the business fails, the business is responsible for any debts, not the CEO or owner. That's why corporations are so happy to be treated as if they were people. The owners and CEOs aren't taking any financial risks. They lobby very hard in Washington to make sure of that.

Secretly, the 1% know that they don't have any extraordinary capabilities, or unusually high intelligence, or God-given rights to have a better life than others do. They know they have no reason at all to lay a claim to such a large share of the available buying power, except that they want it so much. However, it is necessary to convince the 99% (and of course themselves) that the 1% do contribute immensely more to and deserve immensely more from the economic system than the 99% do. That is the basis of all arguments in favor of the status quo. You can always predict what a very rich person will say about his or her wealth. Such a person will always say that this is exactly how it should be for the optimum state of the world.

We can't deny that people who run businesses have useful talents and deserve to be paid for applying them. If they have to do this under squalid conditions, putting in longer hours than other workers do, suffering more stress and weariness than other workers do, and risking more of their personal wealth because of their jobs, I think most people would agree that we would need to pay them well. We would try to persuade them to continue to give us the benefit of their services as long as they are more successful at their jobs than other other people would be.

Of course that is not how things are. The upper management people have the plushest offices, eat long lunches at the best restaurants, drive or are driven in the most luxurious cars, live in the biggest houses full of the best amenities, and never have to lift a finger to clean or maintain anything. They have so much personal income that they can't come close to spending it all, so they can invest much of it to increase their already-huge incomes. And they don't seem to be significantly smarter than the average worker. Do they somehow deserve to live like royalty? They think they do.

One wonders how anyone could agree with them.

Best,

Bill P.

3

[Martin Taylor 2011.01.01.13.47]

[From Rick Marken (2011.1.1.0910)]

Happy New Year!!

And to all readers of CSGnet, among a few billion others!

According to Wikipedia: "In game theory and economic theory, zero-sum
describes a situation in which a participant's gain or loss is exactly
balanced by the losses or gains of the other participant(s)".

This has been my understanding of the meaning of "zero sum game" as
well. The economy is a zero sum game for the reasons I give in the
next part of my post, which you quote:

If 90% of GNP goes to the top 1% then only 10% of GNP can go to the bottom 99%.

You ignore the fact that the game has to be played. In a zer-sum game, the total pot is unchanged by the actions of the players, which is why one participant's gain is another's loss. In a non-zero-sum game, some methods of play create pots bigger than are generated in other methods of play. Consider the classical "Prisoner's Dilemma". If A defects, A gets a large reward but B gets nothing and goes to jail. If both cooperate (with each other), they both get a moderate amount and nobody goes to jail, but if both defect, they get nothing and both go to jail. This is not a zero-sum game.

Now, consider different ways of playing the economy game under the rule: "If 90% of GNP goes to the top 1% then only 10% of GNP can go to the bottom 99%." Play it two ways.

Play method (1). There's a pot of "wealth" and everybody scrambles for what is there, the strongest and fiercest 1% getting 90%, and the other 99% sharing 10%. The strong and fierce get 9% each.

Play method (2). Everyone fights over the pot, and in the process, half gets destroyed. The winners get 4.5% of the original pot.

Play method (3). There's a pot of "wealth" and everyone collaborates to use it to make factories and roads and entertainment media etc. At the end of the year there is 100 times more wealth than there was initially. Then it is shared out so 1% gets 90% and the other 99% share 10%. But 10% now is a factor of 10 more than there was initially, so in terms of the initial wealth, the 99% are sharing 1000%, so they get 10.1% each of the initial "wealth". In other words, they get more than even the strong and fierce would get under play method (1).

Obviously things are not as extreme as this, but what the economy normally does is increase the pot to be shared. The question is which play method works best, however you define "best".

Anyway, the point is that the economy is not a zero-sum game. The tax-cutters think it is, since they say that the taxes paid are simply subtracted from the money available for use by individuals, ignoring that the taxes paid are returned to individuals in the form of wages and intangible wealth such as National Parks, breathable air, personal safety, and the like.

Martin

···

On 2011/01/1 12:11 PM, Richard Marken wrote:

4

[From Rick Marken (2011.01.01.1240)]

Bill Powers (2011.01.01.1025 MDT)--

Rick Marken (2011.1.1.0910) --

This zero sum characteristic of an economy holds true even though the
size of GNP is typically increasing from year to year. I leave that
proof as an exercise (hint: a spreadsheet will come in handy again).

The conservative response to this idea is "A rising tide lifts all boats."

Apparently it's the liberal response, too (see Martin Taylor 2011.01.01.13.47).

If the 1% of recipients spend some of their 90% of the GNP on improving the
quality of life for everyone, �then of course the other 99 percent of the
population do find their quality of life improving (while that of the 1%
improves nine times as fast). So the game is not zero-sum because the sum
keeps increasing.

Right, but I explained that this is irrelevant, given the definition
of zero sum: "zero-sum
describes a situation in which a participant's gain or loss is exactly
balanced by the losses or gains of the other participant(s)". So at
any interval of time (like a year), this is true of the sum, which is
GNP during that year. The only way that an economy can not be zero sum
is by re-defining "zero sum".

The rest of your post is a wonderful New Years gift. Thanks!

Best'

Rick

···

---

Of course the 1% don't spend their own income on the business or to pay the
workers. The business spends its income, and uses other people's money to
start up and expand, not the CEO's salary. Salaries are a business expense.
If the business fails, the business is responsible for any debts, not the
CEO or owner. That's why corporations are so happy to be treated as if they
were people. The owners and CEOs aren't taking any financial risks. They
lobby very hard in Washington to make sure of that.

Secretly, the 1% know that they don't have any extraordinary capabilities,
or unusually high intelligence, or God-given rights to have a better life
than others do. They know they have no reason at all to lay a claim to such
a large share of the available buying power, except that they want it so
much. However, it is necessary to convince the 99% (and of course
themselves) that the 1% do contribute immensely more to and deserve
immensely more from the economic system than the 99% do. That is the basis
of all arguments in favor of the status quo. You can always predict what a
very rich person will say about his or her wealth. Such a person will always
say that this is exactly how it should be for the optimum state of the
world.

We can't deny that people who run businesses have useful talents and deserve
to be paid for applying them. If they have to do this under squalid
conditions, putting in longer hours than other workers do, suffering more
stress and weariness than other workers do, and risking more of their
personal wealth because of their jobs, I think most people would agree that
we would need to pay them well. We would try to persuade them to continue to
give us the benefit of their services as long as they are more successful at
their jobs than other other people would be.

Of course that is not how things are. The upper management people have the
plushest offices, eat long lunches at the best restaurants, drive or are
driven in the most luxurious cars, live in the biggest houses full of the
best amenities, and never have to lift a finger to clean or maintain
anything. They have so much personal income that they can't come close to
spending it all, so they can invest much of it to increase their
already-huge incomes. And they don't seem to be significantly smarter than
the average worker. Do they somehow deserve to live like royalty? They think
they do.

One wonders how anyone could agree with them.

Best,

Bill P.

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

5

(gavin Ritz 2011.2.1.10.38NZT)

[From Rick Marken (2011…1.1.0910)]

Happy New Year!!

Gavin Ritz (2011.01.01.15.30NZT)

Rick Marken (2010.12.31.1745)–

RM says: It has to do with
the fact that the economy is basically a zero sum game.

GR: Show me the inference rules (that trueify this statement) that prove this
declarative statement to be true.

According to Wikipedia: “In game theory and economic theory, zero-sum
describes a situation in which a participant’s gain or loss is exactly
balanced by the losses or gains of the other participant(s)”.

None of
those are inference rules they are just other statements about other statements. Statements cannot be proved to be true using statements about statements. This is the basis of declarative logic.

Your comment about leaving out parts of the statements in the books in the New Zealand editions is excatly what i have been on about for so long. You seem unable to run a professional discourse without attempting to get a pinprick in. What are your controlled variables for such statements.

This comment has nothing to do with our dialogue. leave them out of the discussions.
Regards
Gavin

6

[Martin Lewitt Jan 1, 2011 1502 MST]

[From Rick Marken (2010.12.31.1745)]

Martin Lewitt (Dec 31, 2010 1202 MST)--

Thanx, the explanation of implications of a singular focus on wealth
disparity error aids my understanding.

Actually I was explaining how reorganization works, using control of
the perception of wealth disparity as an example of the kind of
socio-economic variable that one might want to control by varying
(randomly or systematically) policy options.

  Given that explanation I am
extremely happy that you don't have such a singular focus and like myself,
you also have control variables in the area of means (your rejection of
violence at least personally if not by proxy).

Of course some means (policies) go against my values. My problem with
your approach is that you seem only to control for the means, and the
consequences of implementing those means be damned.

I have no desire to control for means, and deeply resent having to. Voluntary relationships with other human beings should be a given. I'd much rather be focusing on my other controlled variables.

At least, the
consequences I care about be damned. For example, besides the fact
that you don't seem to have any problem with the increasing wealth
disparity in the US you also don't seem to care much about the state
of many other socio-economic variables that I think define a civilized
society. You don't seem to care that child poverty has been increasing
again in the US (after decreasing under Clinton), that wages have been
stagnant since 2001, that the health care system in the US is the
worst among the industrial democracies, etc.

I care about all these things, enough to actually investigate whether they are true. Poverty has not been increasing among children in the US, they are better off than ever, as demonstrated by the increasing standards for defining poverty. The increasing number of children living in poverty in the US is a good thing, the poor are successfully reproducing and immigrating. I've criticized on this list the role of the Federal Reserve in favoring the allocation of the returns from increased productivity to capital rather than labor. I disagree with judging the US health care system by the standards that classify rank the US that low, but still support many reforms of government that would make health care more affordable and accessible.

  I can confirm your speculation that I don't control for wealth disparity

Both you and Kenny confirmed that wealth disparity is of no concern to you.

my focus is on the means.

I know. To me, this is like focusing only on where the mouse should be
in a tracking task, with no regard to the fact that if you arbitrarily
control the position of the mouse the cursor-target relationship will
not be under control. Controlling the mouse by keeping it in some
arbitrary position is equivalent to your interest in controlling for
taxes being low. The fact that when you achieve this goal other
variables go uncontrolled (like the deficit, wealth disparity,
poverty, etc) seems to be of no concern to you; as long as the means
are at your reference then you're cool with any consequences that may
result.

The exact same policies should be favored by those who are concerned about the deficit, wealth disparity and poverty, so being informed rather than "concerned" would seem more important. I don't just support taxes being low, but being lower and reformed so that they are less structurally damaging to the economy.

  Part of my mental wealth, is I don't lose a lot of sleep because someone
else has "more".

Nor do I. I have nothing against wealthy people; some of my best
friends are worth much more than I am. I am happy for them. My problem
with wealth disparity has nothing to do with envy. It has to do with
the fact that the economy is basically a zero sum game. If 90% of GNP
goes to the top 1% then only 10% of GNP can go to the bottom 99%.

To make the case for zero sum, you would have to use nominal or inflation adjusted dollars and hedonic improvements and with globalization considering the hundreds of millions lifted out of poverty elsewhere. Summing percentages of GDP just doesn't cut it.

That
causes unnecessary hardship for people (see The Spirit Level: Why
Greater Equality Makes Societies Stronger, Richard Wilkinson, Kate
Picket). It also removes demand from the circular flow (see Leakage,
T. C. Powers) and it's unnecessary to boot (see The Winner-Take-All
Society: Why the Few at the Top Get So Much More Than the Rest of Us,
Robert Frank, Philip J. Cook).

People are responsible for their own spirit level, the poor today in the US are better off than the middle classes of earlier generations.

  I do have a control variable for those who have less wealth than
they might like to have

It's CONTROLLED VARIABLE, not control variable. And what you describe
is not a variable but the state of a variable. The variable is:
desired -actual wealth. You say you are controlling for keeping this
variable near zero (desired wealth is equal to actual wealth). I would
control for this variable as well except that I know that there are
some people who want (and get) so much wealth that it prevents others
from getting anything near the wealth they want. So I'm just
interested in controlling for a more equitable distribution of wealth,
and I'm willing to vary the means (policies) that are used to try to
achieve this goal.

Wealth disparity is not necessarily inequitable in the fairness sense, but I do question the government's, the Federal Reserve and the Democratic party's role in increasing inequity in both senses.

That is, I'm willing to experiment. But I think
that conservatives have already demonstrated the means that _don't_
work to achieve this goal: tax cuts and de-regulation. So I can
eliminate those from my experiment.

I think you don't know what you are talking about or are being disingenuous. Eliminating the double taxes on dividends and capital gains, reducing the effective tax rate on the wealth to the level of the general population, privatization of social security and reform of the Federal Reserve have never been tried.

  but I consider producing more wealth and sharing
knowledge to be less erroneous means than any coercive transfer of that
wealth

Producing more wealth and sharing knowledge seem more like
consequences of policy rather than policies. But for the sake of
getting this over with let's say that those are policies. If you
really agree with Bill proposals about reorganization then you should
be willing to change those "policies" and try something new if the
variable you are controlling (desired -actual wealth) keeps moving
away from 0. It looks to me like desired -actual wealth is moving
considerably away from zero for most of the population (foreclosures,
unemployment, low wages, etc) while GNP has been growing (we have been
producing more wealth) and we've been sharing knowledge (whatever that
means) at about the same level as we always have (given the patent
laws). So are you willing to change these policies? If not, then I
would conclude that you don't really believe in the experimentation
that you so enthusiastically endorsed.

Yes, I'm definitely willing to change current policies. However, producing more wealth and sharing knowledge are not government policies, and would probably fare much better if many government policies were eliminated.

Best wishes for the new year!

- Martin L

···

On 12/31/2010 6:42 PM, Richard Marken wrote:

Best

Rick
---
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

7

[Shannon Williams (2011.01.01 22:00 CST)]

�[Martin Lewitt Jan 1, 2011 1502 MST]

�Voluntary relationships with other human beings should be a given.

Yes. I keep trying to explain this to my two year old. When do they learn?

Best,
Shannon

8

Yes. I keep trying to explain this to my two year old. When do they learn?

Boris :
Depends how you tried to explain to him. Children learn all the time. They
are self-regulated learners.

If you meant when children start to learn what adults want them to learn,
then answer is a little easier. You should know it from PCT. Children will
not learn when "Roy Bean" methods or other unsuitable methods of
interpersonal control for children are used.

If I conclude from your pretty "firing" nature as you play "judge" how it
suits to you, and you are determining whose hostile and whose not, or "whose
to live and whose to die", you could be using wrong methods.

···

On Sat, 1 Jan 2011 21:18:36 -0600, Shannon Williams <verbingle@GMAIL.COM> wrote:

9

[Martin Lewitt Jan 2, 2011 1412 MST]

[Shannon Williams (2011.01.01 22:00 CST)]

  [Martin Lewitt Jan 1, 2011 1502 MST]

  Voluntary relationships with other human beings should be a given.

Yes. I keep trying to explain this to my two year old. When do they learn?

You explain and demonstrate to them that your rules for them are not arbitrary, but rational, and consistent and that they can question them, once, and you will give them and their questions respect, but that sometimes in instances of danger or other priorities the explanation will have to come afterwards. You let them know that you want them to become free, responsible and autonomous, and you grant them that freedom, and let them learn for themselves even from mistakes while keeping them relatively safe. Eventually you will have to let them go. If they have siblings, let them see you protecting and treating them fairly and expecting them to respect each other's autonomy as well.

regards,
      Martin L

···

On 1/1/2011 8:18 PM, Shannon Williams wrote:

Best,
Shannon

10

[From Rick Marken (2011.01.02.2110)]

�Martin Lewitt (Jan 1, 2011 1502 MST)--

ML: I have no desire to control for means, and deeply resent having to.

Then why do you object to the means that I suggest we try in order to
achieve the social goals I care about (mainly reduced wealth
disparity): highly progressive taxation, single payer health
insurance, increased minimum wage, strict financial regulation? You
clearly have references for these means as revealed by your response
to my suggestions, which are obviously disturbances to variables you
are controlling for.

ML: The increasing number of children living in poverty in
the US is a good thing, the poor are successfully reproducing and
immigrating.

As Bill said about people who think that they deserve to live like
royalty "One wonders how anyone could agree with them". I am
dumbfounded.

�I don't just support taxes being
low, but being lower and reformed so that they are less structurally
damaging to the economy.

So, again, your celebration of experimentation seems not to have been
particularly genuine. You clearly have goals regarding what policies
(what means) should be tried. You want taxes to be lower (because you
already assume that high taxes are "structurally damaging"). So that
rules out trying a policy that involves increasing taxes substantially
on the highest earners. That's the policy I would like to see tried.
It would certainly be a change from our current policies. I think a
good "experimenter" would be willing to try that change. But I'm
pretty sure you would be happy if such a change were made. It's the
means (like tax policy) that you care about, not the ends (reducing
child poverty, for example).

To make the case for zero sum, you would have to use nominal or inflation
adjusted dollars and hedonic improvements and with globalization considering
the hundreds of millions lifted out of poverty elsewhere. �Summing
percentages of GDP just doesn't cut it.

I think it's very important to people like you -- basically protectors
of the rich and powerful -- to believe that the economy is not zero
sum. So I don't think it is possible to convince you that it is. In
fact, it should require no convincing at all. It's all mathematical,
and very simple math at that: GNP = A + B. If A increases, B must
decrease in order to preserve the sum (GNP). Zero sum. And that is
true even if GNP is a variable.

Yes, I'm definitely willing to change current policies.

But only in one direction: toward reduction of government policies. I
don't think you would be willing to try a change in policy that, for
example, increases taxes, though that's the only thing that would
constitute a _change_ in tax policy, or implements single payer health
care, though that's the only thing that would constitute a _change_ in
health care policy. If either of these policy changes made things
worse (the things I care about, anyway, like poverty, wealth disparity
and health care cost and outcomes) I would be happy to see these
policies changed. That's reorganization. If you would be willing to
experiment with substantially increased marginal tax rates and single
payer health care then I am wrong about you controlling for the means
rather than the ends. So what do you say; experimentation (trying
higher tax rates, stronger financial regulation, single payer health
care) or insanity (continuing with the same or very similar policies
to those that are currently implemented and expecting better results).

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

11

[Martin Lewitt Jan 2, 2011 2313 MST]

[From Bill Powers (2011.01.01.1025 MDT)]

From Rick Marken (2011.1.1.0910) --

The economy is a zero sum game for the reasons I give in the
next part of my post, which you quote:

> If 90% of GNP goes to the top 1% then only 10% of GNP can go to the bottom 99%.

...

This zero sum characteristic of an economy holds true even though the
size of GNP is typically increasing from year to year. I leave that
proof as an exercise (hint: a spreadsheet will come in handy again).

The conservative response to this idea is "A rising tide lifts all boats." If the 1% of recipients spend some of their 90% of the GNP on improving the quality of life for everyone, then of course the other 99 percent of the population do find their quality of life improving (while that of the 1% improves nine times as fast). So the game is not zero-sum because the sum keeps increasing.

Yes, and it is also not zero sum because the US economy is not a closed system. In the current global economy many of the boats being lifted are overseas. Many more could have been in Mexico if that state wasn't so concerned about protected its people and resources from "exploitation" and such a basket case of crime and corruption.

Of course the 1% don't spend their own income on the business or to pay the workers. The business spends its income, and uses other people's money to start up and expand, not the CEO's salary. Salaries are a business expense. If the business fails, the business is responsible for any debts, not the CEO or owner.

If the business fails, the CEO loses his job and the owners lose their money, and the debt holders may lose some of their tax advantaged returns.

That's why corporations are so happy to be treated as if they were people. The owners and CEOs aren't taking any financial risks. They lobby very hard in Washington to make sure of that.

What? Since when aren't the owners and CEOs taking any financial risks?

Secretly, the 1% know that they don't have any extraordinary capabilities, or unusually high intelligence, or God-given rights to have a better life than others do.

I think many are truly humble and don't think they have extraordinary capabilities, that is perhaps one of their leadership qualities. They probably are pretty high in the area of social intelligence, which standardized tests tend to miss. Some are also pretty good managers, technocrats and innovators.

They know they have no reason at all to lay a claim to such a large share of the available buying power, except that they want it so much.

Except that they may be the best at creating it and putting it to productive use.

However, it is necessary to convince the 99% (and of course themselves) that the 1% do contribute immensely more to and deserve immensely more from the economic system than the 99% do.

They would do much better at this if they weren't so darn humble.

That is the basis of all arguments in favor of the status quo. You can always predict what a very rich person will say about his or her wealth. Such a person will always say that this is exactly how it should be for the optimum state of the world.

No you can't predict they will say that. They usually keep those views to themselves, what we usually hear are rich people saying quite the opposite, that they were fortunate, that they failed many times before succeeding, that it was persistance rather than brilliance, or that their belief in their idea or product rather than their exceptional ability. They've often tried to sell people they thought had greater resources or ability on their ideas. They usually weren't thinking of the optimum state of the world, but did think they were making the world better with their contribution.

We can't deny that people who run businesses have useful talents and deserve to be paid for applying them. If they have to do this under squalid conditions, putting in longer hours than other workers do, suffering more stress and weariness than other workers do, and risking more of their personal wealth because of their jobs, I think most people would agree that we would need to pay them well. We would try to persuade them to continue to give us the benefit of their services as long as they are more successful at their jobs than other other people would be.

It is more reliable to have a system which naturally channels resources to those who create or manage them best. Unfortunately those who would consider themselves the "We" deciding who is successful by some other standard would probably over value their own contribution and insist on a cut and huge pensions.

Of course that is not how things are. The upper management people have the plushest offices, eat long lunches at the best restaurants, drive or are driven in the most luxurious cars, live in the biggest houses full of the best amenities, and never have to lift a finger to clean or maintain anything. They have so much personal income that they can't come close to spending it all, so they can invest much of it to increase their already-huge incomes. And they don't seem to be significantly smarter than the average worker. Do they somehow deserve to live like royalty? They think they do.

You evidently have not had to do business travel and entertainment for a living. I much prefer pizza to sushi, tea to wine, and home with satellite TV and NBA league pass to a hotel room with 13 channels and Spectravision. There is no place like home.

One wonders how anyone could agree with them.

One has to have seen what they have to do, how sharp their management skills, how broad their perspective or how focused their determination and how agreeable their social intelligence is, and how impotent and poor a predictor of success mere academic intelligence is. Humans are social animals evolved in complex unpredictable environments, is it any surprise that visionary leadership, social intelligence, strategic thinking and shear determination work well.

   -- Martin L

···

On 1/1/2011 11:44 AM, Bill Powers wrote:

Best,

Bill P.

12

[From Fred Nickols (2011.01.03.0710 MST)]

I don't intend mixing in this discussion but I do have a question about
something Rick wrote:

[From Rick Marken (2011.01.02.2110)]

It's all mathematical,

and very simple math at that: GNP = A + B. If A increases, B must
decrease in order to preserve the sum (GNP). Zero sum. And that is
true even if GNP is a variable.

Let A = 90 and B = 10. GDP equals 100

If A increases to 95 and B decreases to 5, GDP still equals 100. Ergo: zero
sum.

However, if A increases to 100 and B increases to 15, GDP now equals 115.
No zero sum.

The zero sum view of GDP seems applicable only in terms of viewing GDP as a
percentage so that A + B must equal 100. In that case, GDP is not a
variable; it is a constant of 100%.

What I'm getting at, of course, is the notion of building a bigger pie, not
simply cutting up an existing pie.

Anyway, clue me in if I'm clueless.

Regards,

Fred Nickols
Managing Partner
Distance Consulting LLC
1558 Coshcoton Avenue - Suite 303
Mount Vernon, OH 43050-5416
www.nickols.us | fred@nickols.us

"Assistance at a Distance"

13

[From Bill Powers (2010.01.03.0742 MDT)]

Fred Nickols (2011.01.03.0710 MST)

FN: However, if A increases to
100 and B increases to 15, GDP now equals 115.

No zero sum.

BP: Yes, this is what I was saying. However, because the pie is
divided 9:1, an increase of 10% overall would, roughly speaking, come out
to a 1% improvement divided among 99% of the population, or about 0.01%
each, and 9% divided among the remaining 1%, or 9% each. At the
individual level, the ratio is 900 to 1. So every improvement simply
widens the gap in absolute terms. Did I do that arithmetic
right?
The interesting part of this is that improvements in the quality of life
are not generally initiated by the 1% who are responsible for
coordinating the purchasing, manufacturing, financial, and distribution
systems. With a few notable exceptions, the vast majority of top-echelon
business people simply don’t have the education, skills, or time needed
to invent anything useful or solve any technical problems. They hire
other people who do have such resources and talents to provide the actual
new ideas, work out the design details, implement them, and do the
planning and work of manufacturing, distributing, and selling the
results. If an underling fails to produce results as required, the extent
of the general management contribution is to say “Do your job or
I’ll find someone else who can do it.” The manager has, of
course, no thought of stepping in and doing the job right – he or she
wouldn’t know how, even if there weren’t far too many jobs for one person
to take over.

Coordination is a necessary and valuable skill, but no more necessary and
valuable than any of the other jobs that must be done to keep a business
running. There is really no excuse for those doing the coordinating to
demand wildly extraordinary compensation for the work they do. They have
simply found themselves in positions of central power, and have succumbed
to the temptation to misuse their opportunities, first to consolidate and
protect that power, and then to skim most of the surplus profits of the
business for their own personal benefit. This has happened in every
economic system from capitalism to communism, in every fiefdom from the
King in his castle to Donald Trump in his Tower, at every level down to a
Mom and Pop farmer paying minimum wage, if that much, to an undocumented
worker who sleeps in the barn and doesn’t complain for fear of losing
protection from La Migra and the little income his or her job
provides.

It’s little wonder that there have been uprisings against those at the
top, over and over, throughout recorded history. Yet each uprising has
failed in the end because those that succeeded merely bred another
generation of top managers who saw their chance and took advantage of it.
It’s not capitalism alone that carries within it the seeds of its own
destruction, as Karl Marx put it (or maybe Lenin); it’s all organizations
so large that they need specialists in coordination such as Stalin, Mao,
Eisenhower, or Carnegie to keep them organized. It seems that most of
those specialists, in their innocent delight at realizing what vast
opportunities lie open before them, simply can’t pass up the chance of
acquiring wealth and/or power beyond their wildest imaginings. Or perhaps
it’s just that those specialists who do have such ambitions tend to win
the conflicts and prevail over the gentler souls who, even if they’re a
majority, don’t grab the power and money when they have the
chance.

Our Founding Fathers tried to do something about this in the
Constitution, by designing a system within which power was divided into
conflicting segments, the conflicts being intended to prevent any one
segment’s winning and taking over. That works to some extent, but at a
high cost. Conflict destroys control on both sides, leading to the kind
of gridlock we’ve been living with for a long time. Conflict invites
extremism on both sides; that’s what we mean by saying that conflicts
escalate.

So, what do we do about this? In my opinion, the most effective approach
will be to lay out analyses such as this one in factual terms and without
ranting and raving. It may be that simply reporting the state of affairs
as it is isn’t sufficient to generate the embarrassment and ridicule that
those who are gaming the system deserve to experience. Perhaps all we can
do is watch the natural forces of reorganization at work. But it could be
that a clear view of what is actually going on will suffice to change the
Zeitgeist.

If that’s not enough, simply trying to understand the situation can
provide hope, which is a required ingredient of life. Things are a lot
better now than they were 1000 years ago when a lot of people took their
children to watch other people being hanged or burned alive, or even 150
years ago when politics was about as dirty as it can get. When I see old
movies that made me laugh or cry 70 years ago, I am embarrassed: Step 'n
Fechit, or Rochester, or Bess You Is My Woman Now.

If such changes keep going on, maybe it won’t be too much longer before
our random walk brings us toward a new system concept, in which we wish
prosperity for everyone including me, instead of for everyone but mostly
me.

In the meantime, we can always laugh at Donald Trump, and applaud when
billionaires decide to give away their fortunes. Even if they keep a few
hundred million to provide what they consider a minimum wage.

Best,

Bill P.

14

[From Rick Marken (2011.01.03.1030)]

Fred Nickols (2011.01.03.0710 MST)–

Rick Marken (2011.01.02.2110)–

It’s all mathematical,
and very simple math at that: GNP = A + B. If A increases, B must
decrease in order to preserve the sum (GNP). Zero sum. And that is
true even if GNP is a variable.

Let A = 90 and B = 10. GDP equals 100

If A increases to 95 and B decreases to 5, GDP still equals 100. Ergo: zero
sum.

However, if A increases to 100 and B increases to 15, GDP now equals 115.
No zero sum.

No, it’s still zero sum with a new sum (115). If A’s share increases then B’s must decrease in order to maintain the sum.

The zero sum view of GDP seems applicable only in terms of viewing GDP as a
percentage so that A + B must equal 100. In that case, GDP is not a
variable; it is a constant of 100%.

No, it’s zero sum whether GDP is represented as an absolute number or a percentage.

What I’m getting at, of course, is the notion of building a bigger pie, not
simply cutting up an existing pie.

As I said in an earlier post, it’s zero sum (by definition; an increase in the proportion of the sum going to one “player” means a decrease in the proportion going to another) whether the sum is constant or variable. By increasing the sum (and maintaining the relative portions of the sum going to each “player”) you will increase the absolute size of the portions of the sum going to each player. This is what you did in your example. When the sum was 100, 90 went to A and 10 went to B. When the sum went to 115, 100 went to A and 15 went to B. So both player A and B saw increases in the absolute size of their share of the sum. But this has nothing to do with the fact that, at any instant, the “game” is zero sum.

Of course, in an economy the sum (GNP) is variable; it goes up and down. As Bill Powers (2011.01.01.1025 MDT) noted, this fact is pointed to by conservatives as evidence that the economy is not zero sum. But this is just redefining the meaning of “zero sum”. The fact is that, at any point in time, an increase in the amount of GNP going to one “player” means a decrease in the amount going to the other. If the proportion of GNP going to each player remains constant, then an increasing GNP (sum) will, indeed, increase the absolute amount of GNP going to each player. This is the “rising tide lifts all boats” idea. (This “rising tide” concept is true, by the way, only if both players get more than 0% of the sum (GNP); if one player gets 100% and the other gets 0% then a rising tide lifts only the boats of the player who has boats, the one with 100% of GNP. ). But this “rising tide lifts all boats” notion is completely unrelated to the fact that the economy at any instant is of finite size (GNP) and that the more one player has of GNP at any instant the less the other must have. That’s zero sum.

Independent of whether the economy is zero sum (which is it) Bill Powers (2010.01.03.0742 MDT) has pointed out how inequitable is the idea that a “rising tide lifts all boats”:

BP: Yes, this is what I was saying. However, because the pie is divided 9:1, an increase of 10% overall would, roughly speaking, come out to a 1% improvement divided among 99% of the population, or about 0.01% each, and 9% divided among the remaining 1%, or 9% each. At the individual level, the ratio is 900 to 1. So every improvement simply widens the gap in absolute terms. Did I do that arithmetic right?

A rising tide does lift all boats (as long as you have a boat) but when the relative share of GNP going to different portions of the population are quite different, the size of the gain for each portion is quite different as well.

Best

Rick

···

–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

15

[From Rick Marken (2011.01.03.1100)]

Bill Powers (2010.01.03.0742 MDT)--

If that's not enough, simply trying to understand the situation can provide
hope, which is a required ingredient of life.

Understanding gives me satisfaction. Seeing people like Bernie Sanders
in the Senate gives me hope.

If such changes keep going on, maybe it won't be too much longer before our
random walk brings us toward a new system concept, in which we wish
prosperity for everyone including me, instead of for everyone but mostly me.

Let's hope.

In the meantime, we can always laugh at Donald Trump, and applaud when
billionaires decide to give away their fortunes.

I agree that a good, hearty horse laugh is the best way to deal with
the Trump types. But how do you laugh at people who say stuff like
this:

The increasing number of children living in poverty in the US is a good thing,
the poor are successfully reproducing and immigrating.

???

How about shunning instead? :slight_smile: <-- I guess I can laugh.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

16

[From Fred Nickols (2011.01.03.1310 MST)]

Aha! I see. And what I see is that you and I have very different definitions of zero-sum. And what I described is non-zero-sum.

I did a little research and my definition matches what I find “out there.” I don’t know where you got your definition but it doesn’t fit with what I know to be zero-sum.

I guess we’ll just to agree to disagree.

Regards,

Fred Nickols

fred@nickols.us

···

From: Control Systems Group Network (CSGnet) [mailto:CSGNET@LISTSERV.ILLINOIS.EDU] On Behalf Of Richard Marken
Sent: Monday, January 03, 2011 11:30 AM
To: CSGNET@LISTSERV.ILLINOIS.EDU
Subject: Re: Social reorganization

[From Rick Marken (2011.01.03.1030)]

Fred Nickols (2011.01.03.0710 MST)–

Rick Marken (2011.01.02.2110)–

It’s all mathematical,
and very simple math at that: GNP = A + B. If A increases, B must
decrease in order to preserve the sum (GNP). Zero sum. And that is
true even if GNP is a variable.

Let A = 90 and B = 10. GDP equals 100

If A increases to 95 and B decreases to 5, GDP still equals 100. Ergo: zero
sum.

However, if A increases to 100 and B increases to 15, GDP now equals 115.
No zero sum.

No, it’s still zero sum with a new sum (115). If A’s share increases then B’s must decrease in order to maintain the sum.

The zero sum view of GDP seems applicable only in terms of viewing GDP as a
percentage so that A + B must equal 100. In that case, GDP is not a
variable; it is a constant of 100%.

No, it’s zero sum whether GDP is represented as an absolute number or a percentage.

What I’m getting at, of course, is the notion of building a bigger pie, not
simply cutting up an existing pie.

As I said in an earlier post, it’s zero sum (by definition; an increase in the proportion of the sum going to one “player” means a decrease in the proportion going to another) whether the sum is constant or variable. By increasing the sum (and maintaining the relative portions of the sum going to each “player”) you will increase the absolute size of the portions of the sum going to each player. This is what you did in your example. When the sum was 100, 90 went to A and 10 went to B. When the sum went to 115, 100 went to A and 15 went to B. So both player A and B saw increases in the absolute size of their share of the sum. But this has nothing to do with the fact that, at any instant, the “game” is zero sum.

Of course, in an economy the sum (GNP) is variable; it goes up and down. As Bill Powers (2011.01.01.1025 MDT) noted, this fact is pointed to by conservatives as evidence that the economy is not zero sum. But this is just redefining the meaning of “zero sum”. The fact is that, at any point in time, an increase in the amount of GNP going to one “player” means a decrease in the amount going to the other. If the proportion of GNP going to each player remains constant, then an increasing GNP (sum) will, indeed, increase the absolute amount of GNP going to each player. This is the “rising tide lifts all boats” idea. (This “rising tide” concept is true, by the way, only if both players get more than 0% of the sum (GNP); if one player gets 100% and the other gets 0% then a rising tide lifts only the boats of the player who has boats, the one with 100% of GNP. ). But this “rising tide lifts all boats” notion is completely unrelated to the fact that the economy at any instant is of finite size (GNP) and that the more one player has of GNP at any instant the less the other must have. That’s zero sum.

Independent of whether the economy is zero sum (which is it) Bill Powers (2010.01.03.0742 MDT) has pointed out how inequitable is the idea that a “rising tide lifts all boats”:

BP: Yes, this is what I was saying. However, because the pie is divided 9:1, an increase of 10% overall would, roughly speaking, come out to a 1% improvement divided among 99% of the population, or about 0.01% each, and 9% divided among the remaining 1%, or 9% each. At the individual level, the ratio is 900 to 1. So every improvement simply widens the gap in absolute terms. Did I do that arithmetic right?

A rising tide does lift all boats (as long as you have a boat) but when the relative share of GNP going to different portions of the population are quite different, the size of the gain for each portion is quite different as well.

Best

Rick

Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

17

[From Fred Nickols (2011.01.03.1310 MST)]

Aha! I see. And what I see is that you and I have very different definitions of zero-sum. And what I described is non-zero-sum.

I did a little research and my definition matches what I find “out there.â€? I don’t know where you got
your definition but it doesn’t fit with what I know to be zero-sum…

I guess we’ll just to agree to disagree.

GR: I think most of these terms are so poorly defined that almost any argument seems to go. Here’s a mathematical argument.

The ““subobject classifier”” of Mathematical Category theory (Topological logic) tells us that there’s a joker in the pack and in fact the Universe is open, well is it? Astronomy has proved that it is.

The ““finitely complete”” topoi of Mathematical category theory (Topois) tells us the the universe is limited in other words parsimonious. Well is it? Yes we know there are limits to resources and money and to energy.

If we want to take in things that are not measured in the GDP like the billions of years and energy content it took to create oil, then the game looks like non zero sum but hugely in the negative. More like a negative sum game… And what about the pollution that’s detrimental to life on earth, BP comes to mind.

Not so sure that these concepts are well thought out or well defined at all. Zero sum comes from game theory where there is always a last man standing and life being a social affair just doesn’t always work this way. There are aspects of zero sumness and
also aspects of non zero sumness. A book I mentioned on this list many months ago called Non Zero Sumness is a great example of this. Reality exhibits all sorts of surprises.

After all we are making inferences about our world (and the one we create) and matter by not even understanding the 4% of the universe we can see and hear. The other 96% is probably the bulk of Reality.

So when we create a theory of mind, it needs to include the possibilities of
the other 96%.

Regards

Gavin

[From Rick Marken (2011.01.03.1030)]

Fred Nickols (2011.01.03.0710 MST)–

Rick Marken (2011.01.02.2110)–

It’s all mathematical,
and very simple math at that: GNP = A + B. If A increases, B must
decrease in order to preserve the sum (GNP). Zero sum. And that is
true even if GNP is a variable.

Let A = 90 and B = 10. GDP equals 100

If A
increases to 95 and B decreases to 5, GDP still equals 100. Ergo: zero
sum.

However, if A increases to 100 and B increases to 15, GDP now equals 115.
No zero sum.

No, it’s still zero sum with a new sum (115). If A’s share increases then B’s must decrease in order to maintain the sum.

The zero sum view of GDP seems applicable only in terms of viewing GDP as a
percentage so that A + B must equal 100. In that case, GDP is not a
variable; it is a constant of 100%.

No, it’s zero sum whether GDP is represented as an absolute number or a percentage.

What I’m getting at, of course, is the notion of building a bigger pie, not
simply cutting up an existing pie.

As I said in an earlier post, it’s zero sum (by definition; an increase in the proportion of the sum going to one “player” means a decrease in the proportion going to another) whether
the sum is constant or variable. By increasing the sum (and maintaining the relative portions of the sum going to each “player”) you will increase the absolute size of the portions of the sum going to each player. This is what you did in your example. When the sum was 100, 90 went to A and 10 went to B. When the sum went to 115, 100 went to A and 15 went to B. So both player A and B saw increases in the absolute size of their share of the sum. But this has nothing to do with the fact that, at any instant, the “game” is zero sum.

Of course, in an economy the sum (GNP) is variable; it goes up and down. As Bill Powers (2011.01.01.1025 MDT) noted, this fact is pointed to by conservatives as evidence that the economy is not zero sum. But this is just redefining the meaning of “zero sum”. The fact is that, at any point in time, an increase in the amount of GNP going to one “player” means a decrease in the amount going to the other.
If the proportion of GNP going to each player remains constant, then an increasing GNP (sum) will, indeed, increase the absolute amount of GNP going to each player. This is the “rising tide lifts all boats” idea. (This “rising tide” concept is true, by the way, only if both players get more than 0% of the sum (GNP); if one player gets 100% and the other gets 0% then a rising tide lifts only the boats of the player who has boats, the one with 100% of GNP. ). But this “rising tide lifts all boats” notion is completely unrelated to the fact that the economy at any instant is of finite size (GNP) and that the more one player has of GNP at any instant the less the other must have. That’s zero sum.

Independent of whether the economy is zero sum (which is it) Bill Powers (2010.01.03.0742 MDT) has pointed out how inequitable is the idea that a “rising tide lifts all boats”:

BP: Yes, this is what I was saying. However,
because the pie is divided 9:1, an increase of 10% overall would, roughly speaking, come out to a 1% improvement divided among 99% of the population, or about 0.01% each, and 9% divided among the remaining 1%, or 9% each. At the individual level, the ratio is 900 to 1. So every improvement simply widens the gap in absolute terms. Did I do that arithmetic right?

···

A rising tide does lift all boats (as long as you have a boat) but when the relative share of GNP going to different portions of the population are quite different, the size of the gain for each portion is quite different as well.

Best

Rick

Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

18

(gavin ritz 2011.01.04.11.05NZT)

This is what Mathematical Category Theory and Topological logic has to say on the nature of Reality.

  • nature is organizational that is it is a processing-structure (the constants and changes of Reality)- category has objects and arrows
  • This organization is linked into one gigantic network of associations. (the wholeness of Reality)-category has associative law
  • Each part of this Reality is unique it has an identity.- category has law of identity
  • the quantitative nature of Reality makes it parsimonious- topoi is finitely complete
  • Effective contacts between various parts of Realty creates abundance-topoi is finitely co-complete
  • The diverse Nature of Reality makes this variety unique. -topoi has
    Exponentiation
  • Nature is open and transitive- topoi has subobject classifier
    If one looks at the Zero sum and non zero sum argument Nature seems to have both openness and abundance and closed-ness and limited-ness.

And zero sumness tells us nothing about the other aspects of nature.

Regards
Gavin

19

(Gavin Ritz 2011.01.04.11.55NZT)

In my last email I outlined Mathematical Category Theory (MCT) and Topological Logic (Topoi) construct of Reality.

What’s of interest here is how those categories (MCT and Topoi) totally consume HPCT and how HPCT has attempted to map Reality by identifying some aspects of Reality but not all.

The comparisons are done below, what is interesting is how closely the HPCT follows MCT but it does not follow its cousin Topoi logic. Large parts of reality identified in Topoi are not covered by HPCT.

What’s missing:
The Diversity of nature, it’s qualities.
The Effective contacts of nature which brings abundance the bringing of things together that will change qualities and quantities.
The openness and transitive nature of Reality, that is an open
paradigm.

So most controlled variables will just be fragments and demarcations (zero sumness) of this Reality as outlined by MCT and Topoi. So by this the “'whole”" controlled variable will be a reflection of this entire picture of Reality. And this is what one would expect with a control feedback system.

So what am I saying?

The minds of those of who bring forth the concepts of PCT are parsimonious with those aspects of reality, and may never synthesise this part of reality, and the arguments thus put forward on Zero Sumness show this.

Regards
Gavin

Transitions are a part aspect of ““The changes and constants of nature”” (the processing part, ie the becoming)- the arrows of category theory
Events are the other aspect of the changes and constants of nature (the structural part ie the
being)- the objects of category theory
Relationships are an aspect of the gigantic network of nature - the associative law of category theory
Categories is an aspect of the objects, arrow, identity and associative law of category theory.
Sequences is an aspect of the changes and constants of nature the processing part which is also motion and time- the arrows of MCT.
Programmes is also a part of the logic of the arrows and objects of MCT
Principles is an aspect of diverse (qualities) nature of reality and the constants of nature a mix of MCT and Topoi
Systems Concepts is an aspect of wholeness the gigantic network of associations, associative law of MCT.

20

[From Rick Marken (2011.01.03.1820)]

Fred Nickols (2011.01.03.1310 MST)–

Aha! I see. And what I see is that you and I have very different definitions of zero-sum. And what I described is non-zero-sum.

I agree. But I think it’s not so much that we have different definitions of “zero sum” as we have different concepts of where the “sum” – GNP or the “pie” that is the $ value of the goods/services produced by the economy in some time period – comes from. Let’s think of GNP as a pie (apple, if you please) of a particular size (let’s start with 10 oz). I see that pie as the collective result of the efforts of the people who make up the economy (let’s say there are just two people in the economy, A and B). So lets say that a 10 oz pie is available to be split by the two people who made it. Let’s say A (because he is a competent CEO type who knows how to order people around) gets 9oz and B (who actually knows how to bake pies) gets 1oz. Obviously at this point this is a zero sum game; if B demands a larger piece, say 2 oz, then A gets a smaller piece, 8oz.

Now suppose, after practice, A and B manage to bake a 20 oz pie. If they split it as they did the 10 oz pie then A gets 18oz and B gets 2 oz. B has gotten twice as much as the 1 oz he got with the 10 oz pie but I see the situation as still being zero sum. If B demands more than 2 oz then A will get less (and vice versa). But you would see this as being a non-zero sum situation because both A and B get an increase in the absolute amount of pie. I would agree that this is a non-zero sum increase if the increase B gets was all B’s doing and the increase A gets is all As doing. In this case, B could increase his portion independent of what A does; so the increase that B gets does not depend on what A gets. This is like the situation in the example you gave in your earlier post:

FN: Let A = 90 and B = 10. GDP equals 100

If A increases to 95 and B decreases to 5, GDP still equals 100. Ergo: zero

sum.

However, if A increases to 100 and B increases to 15, GDP now equals 115.

No zero sum.

Note that this assumes that A and B produce their increases independently. The sum increases as a side effect of the increase in the size of the portion produced by A or B or both. If an economy worked this way then I would agree that it is a non-zero sum situation. But I don’t think economies do work this way. I think the size of the pie (GNP) that is to be divided at any instant by the population that makes up the economy depends on the joint efforts of everyone in the economy. So at any instant, the economic pie is like the “reward” that is to be divided by players A and B in a zero sum game. What A gets of this pie diminishes what B can get and vice versa. At any instant the division of the economic pie – GNP – is zero sum game.

I think conservatives like the non-zero sum notion of an economy because they think that individuals are independently responsible for how much of the pie they produce and, thus, get. So if the pie is 100 units and A gets 90 and B gets 10 they believe that B could get a larger postion if B just worked harder and produced more. So if B stopped being so lazy and started really pushing, Bs share of the pie could go from 10 to 20 units and the GNP would grow from 100 to 110 (assuming A keeps working just as hard as before and gets 90 units again). I think this view of the economy – this non-zero sum view – is completely wrong. In a highly specialized economy where many people contribute to the production of every good and service that makes up GNP, size of the “pie” depends on everyone working together. So how much anyone gets of the pie depends not on just their own efforts but also on the common effort that determined how much total pie there is. So how much each person gets of that jointly produced pie is a zero sum game.

At least, that’s how I would incorporate distribution of GNP into my model economy. I haven’t included that yet but it’s the next step, if I ever decide to work on it again.

Best regards

Rick

···

I did a little research and my definition matches what I find “out there.” I don’t know where you got your definition but it doesn’t fit with what I know to be zero-sum.

I guess we’ll just to agree to disagree.

Regards,

Fred Nickols

fred@nickols.us

From: Control Systems Group Network (CSGnet) [mailto:CSGNET@LISTSERV.ILLINOIS.EDU] On Behalf Of Richard Marken
Sent: Monday, January 03, 2011 11:30 AM

To: CSGNET@LISTSERV.ILLINOIS.EDU

Subject: Re: Social reorganization

[From Rick Marken (2011.01.03.1030)]

Fred Nickols (2011.01.03.0710 MST)–

Rick Marken (2011.01.02.2110)–

It’s all mathematical,
and very simple math at that: GNP = A + B. If A increases, B must
decrease in order to preserve the sum (GNP). Zero sum. And that is
true even if GNP is a variable.

Let A = 90 and B = 10. GDP equals 100

If A increases to 95 and B decreases to 5, GDP still equals 100. Ergo: zero
sum.

However, if A increases to 100 and B increases to 15, GDP now equals 115.

No zero sum.

No, it’s still zero sum with a new sum (115). If A’s share increases then B’s must decrease in order to maintain the sum.

The zero sum view of GDP seems applicable only in terms of viewing GDP as a

percentage so that A + B must equal 100. In that case, GDP is not a
variable; it is a constant of 100%.

No, it’s zero sum whether GDP is represented as an absolute number or a percentage.

What I’m getting at, of course, is the notion of building a bigger pie, not
simply cutting up an existing pie.

As I said in an earlier post, it’s zero sum (by definition; an increase in the proportion of the sum going to one “player” means a decrease in the proportion going to another) whether the sum is constant or variable. By increasing the sum (and maintaining the relative portions of the sum going to each “player”) you will increase the absolute size of the portions of the sum going to each player. This is what you did in your example. When the sum was 100, 90 went to A and 10 went to B. When the sum went to 115, 100 went to A and 15 went to B. So both player A and B saw increases in the absolute size of their share of the sum. But this has nothing to do with the fact that, at any instant, the “game” is zero sum.

Of course, in an economy the sum (GNP) is variable; it goes up and down. As Bill Powers (2011.01.01.1025 MDT) noted, this fact is pointed to by conservatives as evidence that the economy is not zero sum. But this is just redefining the meaning of “zero sum”. The fact is that, at any point in time, an increase in the amount of GNP going to one “player” means a decrease in the amount going to the other. If the proportion of GNP going to each player remains constant, then an increasing GNP (sum) will, indeed, increase the absolute amount of GNP going to each player. This is the “rising tide lifts all boats” idea. (This “rising tide” concept is true, by the way, only if both players get more than 0% of the sum (GNP); if one player gets 100% and the other gets 0% then a rising tide lifts only the boats of the player who has boats, the one with 100% of GNP. ). But this “rising tide lifts all boats” notion is completely unrelated to the fact that the economy at any instant is of finite size (GNP) and that the more one player has of GNP at any instant the less the other must have. That’s zero sum.

Independent of whether the economy is zero sum (which is it) Bill Powers (2010.01.03.0742 MDT) has pointed out how inequitable is the idea that a “rising tide lifts all boats”:

BP: Yes, this is what I was saying. However, because the pie is divided 9:1, an increase of 10% overall would, roughly speaking, come out to a 1% improvement divided among 99% of the population, or about 0.01% each, and 9% divided among the remaining 1%, or 9% each. At the individual level, the ratio is 900 to 1. So every improvement simply widens the gap in absolute terms. Did I do that arithmetic right?

A rising tide does lift all boats (as long as you have a boat) but when the relative share of GNP going to different portions of the population are quite different, the size of the gain for each portion is quite different as well.

Best

Rick

Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

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Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com