Dave Ramsey Shoots Down Wealth Inequality Chatter: ‘The Pie Theory Is Someone That Is Ignorant Of Basic Economics’

“The Ramsey Show” features a question of the day that leads to interesting conversations. Dave Ramsey, host of the show and author of several bestselling financial books, agreed with one of his listener’s claims about the economy.

In the question of the day, a listener rejected the notion that you can only become wealthy if you take away wealth from someone else. Instead, the listener believes that economic growth through innovation allows everyone to benefit. Ramsey applauded the listener’s conclusion and doubled down on the absurdity of a zero-sum economy.

“The pie theory is someone that is ignorant of basic economics,” Ramsey stated.

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He went on to share several examples of why that’s the case. Ramsey also dove into the mentality of people who believe that the little guy can’t get ahead because the big guy keeps taking all of the wealth.

The Economy Is Constantly Growing In Size

Ramsey points out that the economy has grown a lot since 1776. If the economy only grew by people taking slices of pie from each other, we’d still be stuck with 1776 technology and solutions to key problems. 

However, the economy has grown rapidly due to innovation, the Industrial Age, and other factors. The growth has resulted in a larger pie that has benefited everyone instead of wealthy people taking all of the slices of the pie from others. 

Ramsey compares the economy to a candle instead of a pie. When you add light to a candle, it becomes brighter. You don’t subtract anything from the economy or take resources away from someone else. You’re just adding to it. 

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When The Pie Theory Applies

While the economy doesn’t operate under the pie theory, you will see the pie theory in action. Ramsey gave gambling as a good example of the pie theory. If you and another person place bets, one of you will win money while the other will lose it.

There are zero-sum games and many of the ones involving money center around gambling. Options trading is another good example of the pie theory. The only way a trader profits is if someone else loses.

However, it doesn’t apply to the economy, and the pie theory doesn’t even apply to financial markets. Ramsey mentions that if Apple reports good earnings and gains value, it benefits all shareholders. It’s not like one shareholder has to lose their slice of the pie for another shareholder to benefit. 

The Hard Truth Behind Pie Theory Advocates

Reality is a bitter pill to swallow for some people, and Ramsey brings this up when talking about pie theory advocates. He views this cohort as perpetual whiners who prefer to complain instead of making meaningful changes in their lives.

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Ramsey compared it to someone who blames fast food restaurants for making them fat. These restaurants exist, but people who become overweight by eating at those restaurants regularly choose to eat at those restaurants.

The real problem is the guy in the mirror. That’s how Ramsey views people who prefer to blame wealthy people for their financial shortcomings. 

Envy is also a driving force behind the pie theory, and Ramsey brings up a personal example that makes this point clear. He said no one was upset when he sold 10 copies of his book from the back of his car while he was starving. However, now that he has sold more than 10 million copies of his books, some people view him as the bad guy. All of a sudden, he’s greedy.

Ramsey believes that some of this mentality stems from mixed-up theology. Many people incorrectly pedal the message that the Bible says money is the root of all evil. However, Ramsey explains that the Bible says that the love of money is the root of all evil. It’s more about character than it is about money. In fact, money doesn’t change people. When you hand people money, it reveals who they already are.

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