The Zero-Sum Society
Murtaugh, Daniel M.
Books: DISTRIBUTING THE LOSSES
S EVERAL issues ago, Mary Gordon suggested that the main function of a review is to bring to readers' attention the books they really should read. I will take...
...But in restoring fairness I take away the incentive to develop those new energy sources...
...Triage is not a job one would choose under any circumstances, but it is particularly oner- ous if you are worried about being elected (or re-elected...
...Quarrels about how one cuts the economic pie will die away as the pie gets bigger, according to this theory...
...The benefits to all of us will come, but very slowly...
...Thurow's arguments on tax reform get to the heart of his concern with distribuCommonweal: 504...
...One of the most interesting points in Thurow's discussion of inflation is his contention that its principal bad effect is the sense of grievance it causes...
...And the distribution of in- come between rich and poor has not changed essentially (although that is largely due to government transfer pay- ments to the poor that will not do the job much longer...
...Thurow pursues the tlteme of the zero-sum game through all the areas that most trouble us: energy, inflation, low productivity, the environment, and gov- ernment regulation...
...But then the zero-sum game simply shifts to the middle and lower quintiles, because I haven't taken enough from the robber barons to restore full fairness...
...But then I see someone else making a bundle from my suffering, and that's not fair...
...The prob- lem originates largely in our perceptions...
...Their fixation on the near term, a condition of their sur- vival, means that the energy crisis is never seriously dealt with...
...The bad news is that some of us will have to pay more than others for any of the available solutions...
...E.g., the Chrysler Corporation...
...That means that your gain inevitably means my loss, or (as I would prefer, despite my kind feelings toward you) vice versa...
...They ask how their income compares with their contem- poraries...
...The evidence suggests, indeed, that people define economic well-being relatively...
...Those who kept quiet before (e.g., blacks) now are speaking up and demanding their share...
...How do you feel about that...
...Lester Thurow argues, in fact, that the remedy was always illusory because it assumed that people defined their eco- nomic well-being in absolute terms, that is, that they would be happy if their real income went up significantly over the years (as it has...
...The struggle over energy is between most of us and the top quintile of society which gets little of the pain and most of the profits from high- priced oil...
...It clarifies our present economic malaise and its sources, and clarification is helpful and bracing even if the news is bad...
...In the course of his discussion of de- clining productivity, Thurow argues that we respond wrongly to the rough process by which productivity grows, namely, by the efficient participants in the zero-sum game driving out the inefficient...
...So the quarrels over who gets what today reflect not simply di- minished growth but expanded and more highly organized participation in the THE ZER0-SUM SOCIETY DISTRIBUTION AND THE POSSIBILITIES FOR ECONOMIC CHANGE Lester C. Thurow Basic Books, $12.95, 230 pp...
...Our elected representatives have small incentive to listen to the few of us who are very rich or very self-disciplined...
...Daniel M. Mnrtaugh quarrels...
...Still, because our nominal income has grown so much faster in re- cent years, swollen with inflated dollars, we feel we are being robbed...
...All right, then, tax some of the windfall...
...The discouraging task for a leader in this situation is to allocate losses...
...Thurow suggests that disinvestment should be a planned and orderly function of central macro-economic planning, just as it is in well-run corporations (and here he has a good word for conglomerates, because their investment choices are so varied...
...If I get a fair deal, then that means that you, my fellow struggler in the lower four-fifths, may have to do with something less...
...Plus one for you, minus one for me sums to zero...
...Of course, politically, it is no less real for that...
...That, of course, is the rule in a zero-sum game: minus lots for some mean plus lots for others...
...As it is, too many of our scarce resources drift at random into the least productive areas of our economy...
...We are extremely reluctant to practice this part of our economic religion," Thurow writes...
...High prices will eventually force a shift to new, more reliable sources of energy, and so (I tell myself) the hardship may be worth it...
...So tax that windfall profit, I say...
...Our real income has improved at about the same rate in the inflationary seventies as it did before 1965...
...This is because our economy has a large "zero-sum" component...
...This reluctance has a real moral basis at the level of the individual (a failing individual is a starving indi-vidual), but it has no moral basis when it comes to firms...
...Yet if anything, we have more programs to protect institutions (all of course justified in the name of protect- ing individuals) than we do individuals...
...The benefits to the top quintile, and the suffering for most of us, will be here overnight...
...Hence the tend- ency to duck the choice and perpetuate the problem the choice addresses...
...But now the limits to growth seem to deny us this remedy...
...And so will the next election...
...One evasive maneuver has been to take refuge in the notion that problems of inequitable distribution can be solved by simple growth of the economy...
...The good news is that none of our problems is in- soluble...
...Books: DISTRIBUTING THE LOSSES S EVERAL issues ago, Mary Gordon suggested that the main function of a review is to bring to readers' attention the books they really should read...
...So give up the windfall profits tax...
...Expandingthe pie offers them no comfort...
...I am just about ready to say this, and that shows how remorselessly persuasive Thurow is...
...The news here is mixed...
...I will take her suggestion and say fight away that you should read this book...
Vol. 107 • September 1980 • No. 16
