Friday, June 20, 2008

From human evolution were not cash and wealth. The human evolution was worked his own wealth....

One of the worst ideas that affect public policy around the world is that wealth is somehow zero sum - that it can be stolen or taken or moved or looted but not created. poorer: All of these positions rest on the notion that wealth is fixed, so that increases in one area must be accompanied by decreases in others. Mercantilism, Marxism, protectionism, and many other destructive -isms have all rested on zero sum economic thinking.
My guess is that this zero-sum thinking comes from our training and intuition about the physical world. As we all learned back in high school, nature generally works in zero sums. For example, in any bounded environment, no matter what goes on inside (short of nuclear fission) mass and energy are both conserved, as outlined by the Energy may change form, like the potential energy from chemical bonds in gasoline being converted to heat and work via combustion, but its all still there somewhere.
In fact, given the the only change that will occur is that elements will end in a more disorganized, less useful form than when they started. This notion of entropic decay also has a strong effect on economic thinking, as you will hear many of the same zero sum economics folks using the language of decay on human society. Take folks like All of there work is about decay: Pollution getting worse, raw materials getting scarce, prices going up, economies crashing. They see human society driven by entropic decline.
So are they wrong? Are economics and society driven by something similar to the first and second laws of thermodynamics? I will answer this in a couple of ways.
First, lets ask the related question: Is wealth zero sum and is society, or at least the material portions of society, always in decline? The answer is so obviously no to both that it is hard to believe that these concepts are still believed by anyone, much less a large number of people. However, since so many people do cling to it, will spend a moment or two with it.

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