Acton Institute Powerblog

Zero-Sum Game Economic Fallacy

Share this article:
Join the Discussion:

Imagine this:  a teacher tells her high school students that they are going to enjoy a chocolate cake, while learning about food distribution and economics.  (As a former high school teacher, I assure you, most of the students heard nothing past the word, “cake”.)

The teacher then divides the students into three groups.  In her class of 30 students, one group is made up of 4 students, a second group is 10 students and the third group is 16.  The teacher then sets the cake before them, and announces that she will divide the cake according to food distribution norms among “first, second and third world countries”.

The group of four students will then enjoy half the cake.  The second group of students will get about three-quarters of the remaining cake, and the smallest piece will go to the group of 16 students.  Of course, protests will follow, along with a discussion of how unfair it all is.

The goal of the teacher will be, of course, to see if the students with the most cake will share their cake with the other two groups.  If they don’t, that choice will be discussed as well.  The students will come away with the idea that everyone will have an equal piece of cake if only those with more share what they have.

This is a noble lesson, and we should of course share what we have, regardless of how much that is.  (After all, Scripture doesn’t encourage only the rich to tithe.)  Unfortunately, the lesson is wrong:  it’s based on the idea that there is only one cake, and we can’t possibly get any more.

I have to admit, that as a teacher, I used lessons similar to this one.  And never once, did I or any of my students suggest a most obvious answer:  bake another cake.

We have the same problem, writ large, in today’s economic outlook:  poor nations are poor because rich nations are hoarding what they have and not sharing.  If only the rich nations would “share the cake”, everyone would have enough.  It also reinforces the notion that poor countries have to sit around and wait for some noble rich nation to divvy up cake for them; they couldn’t possibly create one on their own.  That type of paternalistic attitude is both dangerous and wrong.  The “cake game” also supports the erroneous notion that large groups of poor people are going to take stuff from richer folks; therefore, we need to reduce the numbers of poor people in order to keep our “cake”.

This “zero-sum game” fallacy is only one problem with today’s economic policies, but it is a deeply-entrenched one.  We all need to know that there isn’t just one “cake”, and that by enabling people to create their own food sources, create their own wealth and create their own stable economies, it won’t cost us our “cake”.  We will, in fact, all have more cake – and what better reason to celebrate?

Elise Hilton Communications Specialist at Acton Institute. M.A. in World Religions.


  • GCSteven

    Sounds like an ‘agenda for economic growth’ is needed – Ever here of “Capital Homesteading for every citizen”, or have you read “Curing World Poverty”, “Binary Economics”, and my favorite “In Defense of Human Dignity”? Perhaps and had some of those high school students been exposed to the ideas of Louis Kelso they would have addressed first the creating ‘capital’ cake – “The formation of Capital – Harold Mouton’. Good read (your piece).  

  • i agree with this completely and a recent case of the state of the economy in Somaliland (a cessationist state which i believe is still not recognised as a nation) and my observation of the economy at home in Bangladesh reinforces the case made above. not only does the scenario above avail “more cake for all” but also adds accountability and responsibility for one’s actions as this is their “own cake” rather than “donated cake”. the whole culture of donation in third world nations like bangladesh is wrong as there is no accountability whatsoever – micro-industries development assistance companies are building 40 story buildings in various parts of the city! er umm….smells like hoarding to me?!

  • bake another cake.

  • Pingback: Notable: The Zero-Sum Game Fallacy « Thinking in Christ()

  • Pingback: Notable: The Zero-Sum Game Fallacy « Thinking in Christ()

  • Pingback: The Heterodox Homosexual()

  • Pingback: Wealth Creation Helps the Poor | Focus Point Press - Private Wealth Focus()

  • Pingback: links for 2011-07-01 | The 'K' is not silent()

  • Paul Miller

    My questions are: Who baked the cake in the first place?; who is going to bake the second cake? Why would anyone with power feel the need to bake another cake if they have enough resources for themselves and their dependents? See the problem you don’t see here is that in places like Africa, the major empires of the world have already created a monopoly on the major natural resources on the continent. Britain has control over the gold and diamonds… they also are trying to gain control over the energy creating resources. There are only so many resources on the planet earth. These simplistic thought experiments are created to delude you into dismissing the fact that everything you see in your life took time and money to bring to you. The people in the group of 16 probably had never even thought about a cake… they didn’t have the education or the specialization to do it. These things all take money and time. Technology as well. Technology should be looked at as an extremely concentrated form of time and money because it is the culmination of the efforts of countless lives energies. And who is going to pay for the energy that the oven used up to make the cake? Or the labor? Or the cake? The first world countries will surely want to make a profit off of their efforts… That means the portion of the cake for the third world countries will have to be smaller next time.