6th Grade Economics

Both Marxism and the class warfare around which the liberal Democrats base their economic agenda are grounded on the erroneous premise that economics is a zero sum game. In all zero sum games there must be a winner and a loser. Americans are familiar with many games of that nature…baseball, football, checkers, etc…so it is completely logical that politicians with a somewhat devious agenda would try to twist the understanding of their constituency in such a way to make them believe all of life’s endeavors revolve around the zero sum philosophy.

President Barack Obama would have us believe that the only reason there are poor people in the world is that the rich have taken too large a slice of the economic pie and, in doing so, have deprived the poor of their fair share. His solution to the disparity in wealth among individuals is to identify those who are too rich (by his standard, which can only be arbitrary) and like Robin Hood of old England, sweep down with his minions and take what he can away from the rich to give to the poor. He has done a great job convincing millions of Americans that “the rich do not pay their fair share” even though the actual fact is that the top 10% of wage earners pay 71% of all income tax.

Is economics really a zero sum game? Is it irrefutable fact that every dollar made by a rich person (by whatever standard you choose) comes at the cost of some unfortunate person who is now forced to do without?

Put in simplest terms, did the late Steve Jobs acquire his wealth by stealing iPads from homeless people? I hope the answer is obvious to you. Mr. Jobs created the new technology, and in doing so created wealth…wealth that did not exist before the new product swept the market, wealth for himself and his investors that amounted to something new added to the economic pie. With Jobs’ remarkable new machine, other people created more wealth by building apps, businesses, and technological doo-dads that were based on the iPad.

Obama and the Democrats are wrong. American ingenuity and businesses do not steal dollars from the poor; quite the contrary, those once-lauded elements of the American experience actually create new wealth, which creates new jobs and opportunities for all citizens, which creates even more wealth! Get the idea? If the economy is a pie, it is one that constantly grows and grows and grows, allowing everyone the opportunity to reach in and cut a slice as big as they can carry.

Dr. Jay Richards tells a great story about his sixth grade teacher’s explanation of economics. One day the teacher came into class and gave each student a small toy…a silly putty egg, a whiffle ball, a set of Barbi trading cards, and so on. (This was back in the day when 6^th graders were still kids, not the mini adults parents send to school today.) The teacher said, “Each of you look at your toy and the ones around you. Then I want you to mark on a piece of paper how much you like the toy on a 1 to 10 scale. A 10 means you love it and you wouldn’t trade for anything you see. A 1 means you hate it and would trade for anything else. Everything else means you are somewhere in the middle.” Each child submitted a number. The teacher added them up, and wrote the sum on the board.

“Now,” said the teacher, “you are sitting in five rows of five desks each. You may trade freely with any student in your row, but you don’t have to trade if you don’t want to.”

After a few minutes some of the students had traded toys, and the teacher once again asked them to write down a number representing how much they liked their toy. Amazingly (if you are a zero sum believer) the sum of the numbers was much higher. The toys were the same, but free trade had made the children collectively much happier.

The teacher then told the class they could now trade with anyone in the room as many times as they liked. There was pandemonium for a few minutes as the kids moved around trading, re-trading, laughing, and enjoying the exercise. At the end, the teacher added up their submitted numbers. As someone who believes in a free economy would expect, the final sum was much higher than the previous ones.

One notable thing from this elementary school exercise is that there was nothing new added to the equation…no new wealth, in other words. The kids made themselves happier by creating an exchange on their own terms, without strict rules (government regulations), without intervention by the teacher or school board (bureaucracy), without someone taking away their toys (taxation) and giving them to someone else (redistribution). Imagine what the end result might have been if, like in a free economy, new and better toys (new wealth) had been added to the exchange. Eventually, newer and better toys would have allowed every child in the room to mark his or her toy as a “10.”

Zero sum? Don’t believe it! Zero sum economics is one of the many canards invented by Marxists and adopted by Democrats whose main desire is to control all of the wealth generated by the working people of America. Free trade coupled with invention will create more wealth and greater contentment for all.

Not a bad lesson to learn from 6^th graders!