For an apt comparison, take 9 of your friends out to dinner and agree upfront that everyone will split the bill proportionally 1&#x2F;10th. Watch how people think about spending, it really changes their utility calculus, from &quot;Is this piece of cake worth $5&quot; to &quot;Is this piece of cake worth my 1&#x2F;10th share of $5, or 50 cents?&quot; Problem: everyone thinks that way, leading to a lot of wasteful spending, where &quot;Wasteful&quot; is defined as, &quot;Things I wouldn&#x27;t buy if I was paying for it myself&quot;.<p>Related: China is in the late stages of a credit-driven investment bubble where tons of construction (roads, houses, trains, dams) have been built. It&#x27;s an open question whether it was &quot;worth it&quot;, it probably produced a lot of construction jobs, perhaps some good infrastructure, and spread trade knowledge throughout the economy, but at a huge cost to their taxpayers.