<p>No, the world economy is not a zero-sum game.</p>

<p>Take any sector, and the companies that survive in it are profitable. That's generally because they're wealth-creating.</p>

<p>Access to natural resources is not zero sum. Resources are only viable if they're economically extractable. Constant innovation in resource extraction constantly opens up new reserves, and means that the sector is not zero sum.</p>

<p>Anything involving international trade on a level basis, is not zero-sum - see David Ricardo's work on comparative advantage.</p>

<p>Manufacturing clearly isn't zero sum.</p>

<p>And I'd argue that service provision clearly isn't, either.</p>

<p>Public goods such as education and healthcare aren't either.</p>

<p>So, we've eliminated primary, secondary and tertiary sectors, public goods, and trade. I think that about covers it.</p>

CC BY-SA 4.0
2019-07-25T10:18:15.550Z
If your claim is that "there is not one single conceivable activity in the world economy that is zero-sum, or even approximately so." then this is fine, but I should think that this would require quite extraordinary evidence.
Him
CC BY-SA 4.0
2019-07-25T10:24:03.313Z
As for natural resources, [Luxembourg has no oil reserves](https://www.indexmundi.com/energy/?country=lu&product=oil&graph=reserves), so insomuch as the economic activity "extraction of oil at the [Troll A oil well](https://en.wikipedia.org/wiki/Troll_A_platform)" is concerned, between the parties of Luxembourg and Norway, that aspect of the world economy is basically zero sum.  The fact that Norway owns those waters means that Norway gets to exploit that resource, and that Luxembourg does not.
Him
CC BY-SA 4.0
2019-07-25T11:34:15.217Z
... A better example might be between Luxembourg and Vatican City over Troll A, since neither country currently has any oil reserves.  Norway could feasibly exploit yet other reserves in its region.
Him
CC BY-SA 4.0
2019-07-25T10:17:14.943Z
"Access to natural resources is not zero sum. Resources are only viable if they're economically extractable. Constant innovation in resource extraction constantly opens up new reserves, and means that the sector is not zero sum." This statement can be taken to mean "In the absence of some new innovation that opens up new reserves, extraction of natural resources is zero-sum."  Note that I did not ask "In what ways is the world economy not zero-sum", as this topic has been covered ad nauseam elsewhere.  The question is "In what ways is the world economy zero-sum".
Him
CC BY-SA 4.0
2019-07-25T09:57:40.410Z
2019-07-25T09:57:40.410Z
410 gone
<p><a href="https://en.wikipedia.org/wiki/Mercantilism" rel="nofollow noreferrer">Mercantilism</a> is notorious for treating the world economy as a zero-sum game, wherein the local economy is supposed to benefit when regulations that operate to the detriment of foreign economies are in place.  Mercantilist thought is now outdated, and starting with <a href="https://en.wikipedia.org/wiki/The_Wealth_of_Nations" rel="nofollow noreferrer">Adam Smith</a> and continuing today, commentators love <a href="https://www.handelsblatt.com/today/opinion/prized-mentality-the-economy-is-not-a-zero-sum-game/23566026.html?ticket=ST-9989545-adeufcoo1mgm1jFRlo93-ap5" rel="nofollow noreferrer">to point out that the economy is not a zero-sum game</a>.</p>

<p>However economies are large and complex beasts, and the statement "the world economy is not zero-sum" only requires that there exists <em>some part</em> of the world economy that is not zero-sum.  So, as a contrived example, the fact that pooling our resources to stop a giant meteor from crashing into Earth is win/win for everyone suffices to show that the world economy is "not zero-sum", but has absolutely no bearing on the day-to-day operation of the world economy under 99.999999% of circumstances.  In this way, concepts such as <a href="https://en.wikipedia.org/wiki/Absolute_advantage" rel="nofollow noreferrer">absolute advantage</a> serve to illustrate that the world economy is not inherently zero-sum, but fails to demonstrate <em>the degree to which</em> the economy is not zero-sum.</p>

<p>On a practical level, what are some ways/aspects in which the world economy is zero-sum or approximately zero-sum?  For example, access to natural resources such as oil might be considered mostly zero-sum... Norway benefits tremendously from its oil production, and if Switzerland were to capture their oil fields in some way then Switzerland would obtain much of that benefit.</p>

CC BY-SA 4.0
2019-07-25T17:04:35.833Z
I think the question in your comment is much more interesting and answerable than the question(s) in your post. The question(s) in your post is both too broad and unanswerable without first answering the question in your comment.
Herr K.
CC BY-SA 4.0
2019-07-25T21:21:36.277Z
"your comment is much more ... answerable..."  I would argue that it is way less answerable.  I can think of a great number of ways to measure non-zero-summiness just off the top of my head.  Maximum absolute sum over all outcomes.  Sum of square sums over all outcomes.  Can we apply these to the world economy?  Probably not.  OTOH, zero-sum is very well defined and easyish to measure, and is actually identical in both of the metrics I propose above.
Him
CC BY-SA 4.0
2019-07-25T21:21:52.877Z
This is a broad question, though, I concede.
Him
CC BY-SA 4.0
2019-07-25T21:37:54.087Z
I don't understand why the **measure of non-zero-sum-ness** and the **measure of zero-sum-ness** are not essentially the same measure. If $\mu_0\in[0,1]$ is a measure of the zero-sum-ness of a game (say $\mu_0=1$ for the matching pennies game), then isn't $\mu_1=1-\mu_0$ the measure of the *non*-zero-sum-ness of the same game?
Herr K.
CC BY-SA 4.0
2019-07-25T21:49:05.673Z
Surely zero-sum-ness of a game is well defined and easy to measure; you'd just add up everyone's payoff in an outcome and see if it is zero. But the *deviation from* zero-sum-ness is less well established. Is the Prisoner's Dilemma more zero-sum than a Stag-Hunt? Both games have been used to model certain parts of the economy. Coming up with a metric that places games on a one-dimensional zero-sum-ness spectrum, with Matching Pennies on one end (and perhaps Pure Coordination on the other?), has to be the prerequisite to answering what is "the degree to which the economy is not zero-sum".
Herr K.
CC BY-SA 4.0
2019-07-26T07:29:41.010Z
@HerrK. "has to be the prerequisite to answering what is "the degree to which the economy is not zero-sum"" Exactly.  And yet, ironically, all of the discussion around the matter is about how non-zero-summy the economy is!  OTOH, as you (and I) point out, "zero-sum-ness of a game is well defined and easy to measure."  Thus, it should actually be an *easier* task to note ways in which the economy *is* zero-sum.
Him
CC BY-SA 4.0
2019-07-26T07:34:35.570Z
To be clear, the raw fact that a particular game is not zero-sum is shown by any deviation from zero, no matter how small, for any outcome, no matter how implausible.  So when the non-zero-sumness of a game is of interest, it is essential to also measure the degree to which it is not zero-sum.  However, no such problem exists for zero-sum games.  So it should be a well-defined and unambiguous task to simply look around for examples of zero-sum components of the economy.
Him
CC BY-SA 4.0
2019-07-25T09:05:43.403Z
It may also be worth discussing, on a fundamental level, what are ways to measure the degree to which a game is not zero-sum that might reasonably apply to complex games such as the world economy?
Him
<game-theory>
What are ways in which world markets are zero-sum games?
Him
# What are ways in which world markets are zero-sum games?

(Asked by: username_0 on 2019-07-25)

[Mercantilism](https://en.wikipedia.org/wiki/Mercantilism) is notorious for treating the world economy as a zero-sum game, wherein the local economy is supposed to benefit when regulations that operate to the detriment of foreign economies are in place. Mercantilist thought is now outdated, and starting with [Adam Smith](https://en.wikipedia.org/wiki/The_Wealth_of_Nations) and continuing today, commentators love [to point out that the economy is not a zero-sum game](https://www.handelsblatt.com/today/opinion/prized-mentality-the-economy-is-not-a-zero-sum-game/23566026.html?ticket=ST-9989545-adeufcoo1mgm1jFRlo93-ap5).

However economies are large and complex beasts, and the statement "the world economy is not zero-sum" only requires that there exists *some part* of the world economy that is not zero-sum. So, as a contrived example, the fact that pooling our resources to stop a giant meteor from crashing into Earth is win/win for everyone suffices to show that the world economy is "not zero-sum", but has absolutely no bearing on the day-to-day operation of the world economy under 99.999999% of circumstances. In this way, concepts such as [absolute advantage](https://en.wikipedia.org/wiki/Absolute_advantage) serve to illustrate that the world economy is not inherently zero-sum, but fails to demonstrate *the degree to which* the economy is not zero-sum.

On a practical level, what are some ways/aspects in which the world economy is zero-sum or approximately zero-sum? For example, access to natural resources such as oil might be considered mostly zero-sum... Norway benefits tremendously from its oil production, and if Switzerland were to capture their oil fields in some way then Switzerland would obtain much of that benefit.

**Tags:** game-theory

> **Comments:**
> **username_0**: It may also be worth discussing, on a fundamental level, what are ways to measure the degree to which a game is not zero-sum that might reasonably apply to complex games such as the world economy?  
> **username_1**: I think the question in your comment is much more interesting and answerable than the question(s) in your post. The question(s) in your post is both too broad and unanswerable without first answering the question in your comment.  
> **username_0**: "your comment is much more ... answerable..."  I would argue that it is way less answerable.  I can think of a great number of ways to measure non-zero-summiness just off the top of my head.  Maximum absolute sum over all outcomes.  Sum of square sums over all outcomes.  Can we apply these to the world economy?  Probably not.  OTOH, zero-sum is very well defined and easyish to measure, and is actually identical in both of the metrics I propose above.  
> **username_0**: This is a broad question, though, I concede.  
> **username_1**: I don't understand why the **measure of non-zero-sum-ness** and the **measure of zero-sum-ness** are not essentially the same measure. If $\mu_0\in[0,1]$ is a measure of the zero-sum-ness of a game (say $\mu_0=1$ for the matching pennies game), then isn't $\mu_1=1-\mu_0$ the measure of the *non*-zero-sum-ness of the same game?  
> **username_1**: Surely zero-sum-ness of a game is well defined and easy to measure; you'd just add up everyone's payoff in an outcome and see if it is zero. But the *deviation from* zero-sum-ness is less well established. Is the Prisoner's Dilemma more zero-sum than a Stag-Hunt? Both games have been used to model certain parts of the economy. Coming up with a metric that places games on a one-dimensional zero-sum-ness spectrum, with Matching Pennies on one end (and perhaps Pure Coordination on the other?), has to be the prerequisite to answering what is "the degree to which the economy is not zero-sum".  
> **username_0**: @HerrK. "has to be the prerequisite to answering what is "the degree to which the economy is not zero-sum"" Exactly.  And yet, ironically, all of the discussion around the matter is about how non-zero-summy the economy is!  OTOH, as you (and I) point out, "zero-sum-ness of a game is well defined and easy to measure."  Thus, it should actually be an *easier* task to note ways in which the economy *is* zero-sum.  
> **username_0**: To be clear, the raw fact that a particular game is not zero-sum is shown by any deviation from zero, no matter how small, for any outcome, no matter how implausible.  So when the non-zero-sumness of a game is of interest, it is essential to also measure the degree to which it is not zero-sum.  However, no such problem exists for zero-sum games.  So it should be a well-defined and unambiguous task to simply look around for examples of zero-sum components of the economy.  

---

## 1 answers

### Answer by username_2 on 2019-07-25. Score: 0

No, the world economy is not a zero-sum game.

Take any sector, and the companies that survive in it are profitable. That's generally because they're wealth-creating.

Access to natural resources is not zero sum. Resources are only viable if they're economically extractable. Constant innovation in resource extraction constantly opens up new reserves, and means that the sector is not zero sum.

Anything involving international trade on a level basis, is not zero-sum - see David Ricardo's work on comparative advantage.

Manufacturing clearly isn't zero sum.

And I'd argue that service provision clearly isn't, either.

Public goods such as education and healthcare aren't either.

So, we've eliminated primary, secondary and tertiary sectors, public goods, and trade. I think that about covers it.

> **Comments:**
> **username_0**: "Access to natural resources is not zero sum. Resources are only viable if they're economically extractable. Constant innovation in resource extraction constantly opens up new reserves, and means that the sector is not zero sum." This statement can be taken to mean "In the absence of some new innovation that opens up new reserves, extraction of natural resources is zero-sum."  Note that I did not ask "In what ways is the world economy not zero-sum", as this topic has been covered ad nauseam elsewhere.  The question is "In what ways is the world economy zero-sum".  
> **username_0**: If your claim is that "there is not one single conceivable activity in the world economy that is zero-sum, or even approximately so." then this is fine, but I should think that this would require quite extraordinary evidence.  
> **username_0**: As for natural resources, [Luxembourg has no oil reserves](https://www.indexmundi.com/energy/?country=lu&product=oil&graph=reserves), so insomuch as the economic activity "extraction of oil at the [Troll A oil well](https://en.wikipedia.org/wiki/Troll_A_platform)" is concerned, between the parties of Luxembourg and Norway, that aspect of the world economy is basically zero sum.  The fact that Norway owns those waters means that Norway gets to exploit that resource, and that Luxembourg does not.  
> **username_0**: ... A better example might be between Luxembourg and Vatican City over Troll A, since neither country currently has any oil reserves.  Norway could feasibly exploit yet other reserves in its region.  

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