Slaved by Zero

What do the immigration debate and the inequality debate have in common? Both seem to turn on zero-sum versus positive-sum framing of the issues.

Much opposition to immigration derives from the belief – correct or not – that immigrants create a burden on the welfare state. Since the dollars spent on welfare (including public health, education, and so forth) can’t simultaneously be spent on other projects (or left in the taxpayers’ pockets), the zero-sum framing is justified: the immigrants’ gain is our loss. But even if the immigrants-on-welfare argument is put to rest, either by laws restricting immigrants’ reliance on welfare or evidence demonstrating the problem is small, some people will still oppose immigration because of the perception that immigrants take American jobs. Here, the zero-sum framing is mistaken, relying on the bogus belief that the number of jobs is fixed, meaning the immigrants' job gain is our job loss. But given that belief, opposition to immigration follows naturally enough.

The debate over inequality follows a similar pattern. Why should we be concerned at all about inequality? The presumption is that gains to the rich necessarily imply losses to the poor – another example of zero-sum framing. The presumption is wrong, because it fails to consider the possibility that everyone might gain in absolute terms. It’s true, for instance, that the share of income received by every income quintile except the top one has decreased over time. But it’s also true that the average real income of every quintile has increased at the very same time. It’s just not true that the rich have gotten richer and the poor have gotten poorer; instead, the rich have gotten a lot richer and the poor have gotten a little richer. It’s a positive-sum game. Once this fact is understood, some opposition to inequality should dissolve. But the debate isn’t over, because the opponents of inequality fall back on a different argument: that the relative success of the rich makes the rich feel smug and the poor feel envious. Even if the absolute material well-being of the poor has improved, their relative well-being has declined. By means of this argument, the inequality debate is framed once again as a zero-sum game: if we care intensely about relative status, gains to the rich are ipso facto losses to the poor.

It should go without saying that I’m simplifying greatly. Probably the most important factor I’ve glossed over is that positive-sum is not synonymous with beneficial to everyone involved. Immigration may (I believe does) create gains that exceed the losses to all parties, making it a positive-sum activity; and in the long run, I think almost everyone shares in the gains (through, among other things, lower-priced goods and services). But almost doesn’t mean universal, and some people assuredly lose. They would have reason to oppose immigration even without a zero-sum perspective. Similar, the kind of economic system that generates high inequality along with widespread growth in real incomes doesn’t help absolutely everyone. There are certainly many short-run losers and some long-run losers as well. They, too, might have reason to oppose the system even without thinking in zero-sum terms. Still, I think it’s interesting how far the zero-versus-positive-sum distinction goes in explaining policy debates.