Forums: Discussions for entrepreneurs and small business.

We hear about how "the pie is getting bigger," or that "the rich get richer at the expense of the poor." Then we hear about "giving back to the community."

The phrases often are associated with the term "zero-sum equation." What`s that all about?

Then we hear about how "You must think big! You have to imagine yourself as wealthy or rich or successful if you want to run a business!" Everyone wants you to "think big!" until you actuall get big! Then you`re supposed to "remember the little people."

So what, think big.....but not TOO big? What are the limits on "big?" That too brings up "the pie" and the zero-sum equation.

Does the process of accounting *cause* reality? Or is accounting one way to explain reality? Or is accounting the ONLY way to exaplain reality?

Now, I know I`ve told you about smoking those funny little cigarettes before you post.




They say " 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). It is so named because when the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero. Chess and Go are examples of a zero-sum game: it is impossible for both players to win. Zero-sum can be thought of more generally as constant sum where the benefits and losses to all players sum to the same value. Cutting a cake is zero- or constant-sum because taking a larger piece reduces the amount of cake available for others."

How rich is rich? That depends. We tend to think that today`s billionaires are as rich as people have ever been, that is not the case though. In order to compare riches we must first have a standard, the best way to do that is comparing how do they (the rich) compare against their peers. Bill Gates for instance (richest man alive) is worth 1/152 of GDP, while J. D. Rockefeller was worth 1/65 of GDP. So, compared against the reality of their time Rockefeller was 2.5 times richer than Gates today.

Eli

ps. I have no idea where do you want to go with this thread

Where I want to go is into the idea that "money" and "an economy" is NOT a constant-sum or zero-sum environment. The rich do NOT get richer at the expense of an increasing number of poor.

An economy, which generates money, literally makes something out of nothing. The "nothing" is raw materials, junk, or pieces of other products that were made from nothing. It`s not literally nothing---that would be magic.

But when I say making something from nothing, I mean it in the context that when a farmer grows an ear of corn or a tree, s/he begins with dirt, water, and seed. When someone makes a computer chip, they begin with melted sand (silicon).

It`s not as if the farmer went out and robbed someone of their corn. It`s not as if Intel stole someone else`s beach!

Just as there are more people living today than 100 years ago, so too there are more products in existence than 100 years ago. And, there`s more money in the economy to match those products. Nobody stole a finite portion of money from someone else`s "share."

Hello again Craig,

Love it. Not bothering to pick up on all that has passed me during my time away from SuN but having read NonZero by Robert Wright, this topic does interest me.

I think you`re right to recognize that the zero sum is rarely achieved and that our world doesn`t really work that way (except in some weird idealistic vacuum). 

I also think that the term zero tends to have a negative connotation, as in nothing gained. But believe that most people can appreciate that while zero may mean that you have nothing, it also can represent the fulfillment of a debt,  the stability of sea level, a call from a doctor with a clean result from a test.

People make conscious and unconscious decisions every day which side of zero they are going to occupy. Some people stay under zero their entire lives and have no expectation or desire to make it anywhere near it. Others will live paycheck to paycheck financially at zero but have very fulfilling lives with their families and friends. Some people have so much on the  top side that they have enough to toss down to the sub zeros.

Here`s my main point though. in all matters people are moving up, moving down, or maintaining. Zero is not in itself a destination as much as it is a point on the gauge. To make matters more confusing, everybody has a different "meter" or way to measure where they fall along that line. 

After factoring everything in-- my overall state when considering  physical and emotional health and the financial situation, I try to be on the positive side of things, but I know that it is almost always in flux.

 

 

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~Eric
JE Design Group, LLC
If all you do is what you`ve done, then all you`ll get is what you`ve got.
www.jedesigngroup.com

Hey there, Eric :-) Long time, no see! I hope your business is launched and making millions?

What`s interesting is that "zero," by definition, doesn`t exist. As you`ve said, it either represents perfect (static) balance and apathy, or it`s a placeholder for the crossover point between loss and gain, negative and positive.

In this context, "zero sum economy" has become a stand-in for the idea that "if someone wins, someone else loses." It`s like squeezing a long, skinny balloon, where no matter which side expands, the other side is being squeezed. And people believe that the little people, the poor people, the middle class, or someone else is being "squeezed" (financially).

This vision of a balanced, zero-sum economy has created government redistribution systems to move wealth from "the rich" to anyone who wants to be rich but doesn`t believe life has been fair about it. It leads to a belief in "Wal-Mart seeds," where someone owns them, sprinkles them on the ground, and suddenly a store grows out of the ground!

I just wonder how many people starting a business also believe in this concept of balanced "fairness." :-)