The OWS Zero-Sum Game Fallacy
One of the themes coming from the Occupy Wall Street (OWS) movement is the liberal claim that if there were fewer rich people, there would be fewer poor people. The Occupiers believe that there is only so much wealth to go around, and the rich are hoarding it so that there are reduced opportunities for the remaining 99%.
This is the so-called zero-sum game. The solution, allegedly, is to transfer wealth from the greedy to the masses via taxes. But a tax policy based on an incorrect premise is bound to be counterproductive.
Recently, Activision released the video game Call of Duty: Modern Warfare 3. Sales rose to $775 million. The question for the OWS zero-sum gamers: who is worse off because Activision created MW3? Using the logic of the OWS movement, nearly a billion dollars that could have gone to help the poor is now in Activision's coffers. Therefore, the condition of the world has been worsened because a computer programmer had an idea about a video game based on modern warfare.
For those who believe in the OWS creed, the solution must be to either prevent Activision from making so much money, or to tax what they do make until fairness is achieved. Would Occupiers limit the sales of MW3 and create a shortage, leaving those who wanted to buy it out of luck, or would they make the game so expensive to produce that Activision simply dropped out of the market?
How would the plight of the working class be improved if Activision ceased to exist? If we banned all video games and prevented billions of dollars from going to developers, what would we have to show for it? Had Activision believed in the OWS philosophy, they would never have created Call of Duty because they would have mistakenly assumed that the big video game companies had already cornered the market.
Each Monday, Hollywood announces how much money recently released films made the previous weekend. It's always millions of dollars. If OWS is correct, these numbers would represent lost opportunity for those who didn't make any money off the movie. If the Occupiers were consistent, they would hate Hollywood as well as Wall Street. Hollywood made $10.5 billion last year from ticket sales, but that does not mean that there are more poor people because of it. The creation of a blockbuster movie is good news for all. Contrary to what the OWS crowd thinks, the lack of accumulated wealth creates poverty, not the other way around.
Before WWII, most married women did not work outside the home, but the need for workers to replace men who went off to war drew women out of the home and into our factories. After the war, the trend continued, and now most women work outside the home. If zero-sum theory was correct, these postwar female workers would not have been able to find jobs because there just wouldn't be any left. But what happened was that our economy expanded when women with valuable skills entered the workforce. The point is that they had capabilities that created wealth.
Clearly, the existence of wealth does not mean that those who are not wealthy have been crowded out. It is more valid to conclude that regardless of whether or not there are wealthy people among us, with liberty, we can all be successful, but not necessarily wealthy. The correct reaction would be to ensure that we all have equal protection under the law.
Zero-sum offers an easy excuse for failure. It provides someone to blame for the human condition instead of encouraging self-reliance. As more people believe it, a stream of helplessness and resentment begins to meander through our culture. In short, it says that our individual financial shortcomings are not our fault -- instead of addressing ourselves, we should blame the rich.
Companies like Activision, Google, and Facebook did not exist a few years ago, yet now seem to be pillars of our culture. Their existence proves that wealth creation does exist. Instead of targeting large companies and big earners for punishment, we should be encouraging and rewarding innovation.
Chris W. Bell can be reached at email@example.com.