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Two economic blind spots we all share
We’ve had countless generations to get to grips with the laws of nature. The foundations of modern economics were laid barely ten generations ago. Small wonder our intuitions are at odds with them
If you give me something of value, you are poorer, and I am wealthier — few things are more evident. If I give you something in return, there are three possibilities: it is worth more than what you gave me, less, or exactly the same. The first two cases each leave one of us better off and the other worse, and the third one puts us level — so it is clearly a zero-sum transaction. In contrast, if I go to the woods and pick some berries, I gain, and nobody loses out — which is clearly not a zero-sum transaction. This was how humans, for tens of thousands of years, have experienced their environment and their mutual interactions, and how our intuitions were honed. Yet, although they appear to perfectly reflect reality, modern economics argues that these age-old intuitions are incorrect. Isn’t that odd?
Opposed intuitions
There is something deeply unintuitive about the idea that an exchange — certainly of material goods — can be anything else than a zero-sum affair. This is rooted in the assumption…
