Life in the 16th century was bleak. Unless you were lucky enough to have been born into the sliver of the population that held all the political and economic power, you were more or less doomed to a life of poverty. If you were born poor, you could almost always count on dying poor. You were stuck in a very static world—socially static (no upward mobility), politically static (well, there often was jostling between members of royal families and ambitious nobles for power, but the masses were forever on the outside looking in), and economically static, since standards of living, and hence the population itself, couldn’t exceed the limits imposed by stagnant production.
Indeed, total wealth was basically stagnant. The powerful elite, owning the land that was the source of most wealth, collected their rents and lived in style while the masses struggled for a subsistence-level survival. In such a world, it is understandable that the French philosopher, Michel de Montaigne (1533-1592) conceived of the world as a zero-sum place, one in which “no profit whatever can possibly be made but at the expense of another”—a direct quote from Montaigne’s essay “That The Profit Of One Man Is The Damage Of Another.” This essay sounded the keynote for the Age of Mercantilism (roughly the 16th, 17th, and 18th centuries) in which Europe’s political elite rigged the economic game to enrich themselves at the expense of the masses.
A zero-sum world is intrinsically grim if the only way to increase one’s own prosperity would be to reduce someone else’s. In such a harsh world, how could there be social harmony if the interest of one class is opposed to another? And in international relationships, economist Ludwig von Mises observed, “As long as the people cling to the Montaigne dogma and think that they cannot prosper economically except at the expense of other nations, peace will never be anything other than a period of preparation for the next war.”
Fortunately for the human race, Montaigne’s depressing diagnosis turned out to be fallacious. Nations have learned that both sides are better off if they trade goods rather than military attacks. The explosion of wealth around the globe in the last two to three centuries has meant that more and more people have enjoyed higher and higher standards of living—something that would have been impossible in a zero-sum world. Several concurrent revolutions—moral and political leading to greater liberty; scientific and technical, multiplying human productivity via the Industrial Revolution; and economic enlightenment, giving rise to the Age of Capitalism—ushered in a more prosperous world as peaceful cooperation in voluntary, mutually beneficial economic transactions transformed the world into a positive-sum place.
In spite of the overwhelming everyday evidence of a positive-sum world, Montaigne’s dismal zero-sum view still seems to hold sway among progressives today. Progressives denounce “the rich” with such vehemence and attack enormous business profits with such anger that one is forced to conclude that the rich and successful have done something ugly and immoral—specifically, that they have gotten their gains at the expense of the masses, as was the case historically under feudalism and mercantilism. This is economically ignorant. In today’s positive-sum world, those who earn a lot of money do so not at the expense of others, as under mercantilism, but by having added value to the lives of others. Every dollar of business profit is the mirror image of more than a dollar’s value of benefits delivered to the business’s customers. Such beneficence to others merits respect, if not gratitude and praise.
By the way, this is not to say that every person or business that has a lot of money earned it in economic service to others. Some profit from what Frederic Bastiat called the two types of plunder—illegal plunder (that is, theft, fraud and other actions justly deemed crimes against property) and legal plunder, such as the widespread cronyism by which politicians (and quite often, progressive politicians) bestow government money on their friends and political allies.
In the warped zero-sum view, though, progressives strive to punish those who have been society’s leading economic benefactors. Apparently, progressives don’t like the businesses that earn profits in the marketplace, but instead reserves its esteem only for those businesses that the government itself supports. Hmmm, didn’t we use to call people who preferred government-financed businesses “socialists?” But I digress.
The zero-sum crowd compounds its error in the way it chooses to “help” the non-rich. Instead of focusing on economic growth as the means to uplift the non-rich and increase their opportunities for upward mobility, progressives channel all their energies into devising schemes to redistribute wealth. Wealth redistribution is zero-sum. Why do progressives prefer zero-sum to positive-sum policies? It seems to me that they are so convinced that the rich got rich through zero-sum activity that unjustly extracted wealth from the non-rich that the only fair response is to play Robin Hood and restore the rich’s ill-gotten gains to those from whom it was taken.
If the progressives could just grasp that the Montaigne thesis is a fallacy, an outdated, disproven theory, perhaps they could bring themselves to accept the social benefits—the improvement to the general welfare—that free-market positive-sum transactions produce. They could abandon their misguided class warfare and promote peaceful cooperation between the members of society —and the much greater increase in prosperity that free markets produce—rather than sowing the seeds of bitterness and conflict by pursuing class warfare.
Today’s progressives are mesmerized by the ghost of Montaigne. They are fixated on the anachronistic fallacy that we live in a zero-sum world. This vision is not progressive; instead of leading us forward, it seeks to return us to a more primitive, unenlightened world in which a political elite is in charge of economic results and social harmony and economic growth are the tragic casualties. For all our sakes, we’d better hope that progressives see the fallacy of the Montaigne dogma before it’s too late.
