Our economic narrative has been hijacked by a dangerous falsehood: the notion that the economy is zero-sum. This belief that for one person to win, another must lose fundamentally contradicts the very concept of economic growth. If we truly lived in a zero-sum world, how could our economy possibly expand? It’s like asking a sumo wrestling team to gain weight by trading the same food amongst themselves. It doesn’t add up. Economic growth requires creating new value, not just redistributing what already exists.
Yet opportunists have seized on this myth by tapping into our psychological vulnerabilities to manipulate and extract for their own gain. Zero-sum thinking preys on natural human frailties born from our species’ long history of scarcity.
For most of human existence, resources were indeed limited. But today’s world of abundance makes scarcity a matter of choice. Decisions made by business executives, investors, elected officials and consumers determine what is available when for whom. As 2024 Nobel Prize-winning economist Daron Acemoglu noted, “Inclusive economic institutions foster economic activity, productivity growth, and economic prosperity… [while] extractive economic institutions are designed to extract incomes and wealth from one subset of society to benefit a different subset.”
Time travel through positive-sum economics
The miracle of our modern economy lies in its ability to engage in time travel. Through the magic of credit, fractional reserve banking and national fiat currencies, zero-sum economics died, and positive-sum was born. The capital market is a kind of time machine, allowing borrowers and entrepreneurs to access future earnings for present-day purchases. National fiat currency means a country can create money from nothing, with value backed by nothing more than shared trust—a remarkable evolution from the days when every coin needed to contain its weight in precious metal.
The capital markets time machine transformed economics from a static, zero-sum game into a dynamic, positive-sum reality where growth becomes not just possible but expected. There are other positive-sum scenarios. Consider the impact investing landscape. Affordable housing investments simultaneously provide essential shelter, increase happiness, enhance social stability and reduce taxpayer burden on social safety nets, all while generating attractive financial returns. Affordable housing investments expose the fallacy of zero-sum thinking: we can do well by doing good.
Similarly, investments that improve corporate culture through greater empathy drive innovation, productivity and profitability. KKR, one of the world’s leading investment firms, has shown that equivalent investments in comparable companies generated higher financial returns when CEOs demonstrated more empathic leadership. The foundation of empathy is fairness, and fair treatment yields measurable returns. Great corporate culture isn’t just nice to have—it is positive sum because it generates more profits and social good than the alternative.
Even Milton Friedman, often misunderstood as a champion of shareholder profits at all costs, recognized in his seminal essay that investing in communities and workers creates long-term positive-sum value. The prosperity of a business is inextricably linked to the prosperity of its ecosystem.
Positive-sum through patriotic action
What we need is an economic narrative rooted in positive-sum thinking through patriotism. Not the flag-waving variety, but the deep commitment to country, democracy and the common good. This approach recognizes that businesses flourish when they serve the broader interests of society, treating workers as long-term assets rather than short-term costs and moving beyond a “Chainsaw Al” Dunlap mentality that prioritizes only shareholders.
Research by economists Daron Acemoglu, Simon Johnson and James Robinson demonstrated that societies built on inclusive, fair institutions prosper, while those dominated by extractive, unfair ones ultimately fail. Fairness isn’t just morally right; it’s economically essential.
Impact investors operating from a positive-sum perspective actively seek opportunities where financial returns and positive social impact align. They identify undervalued assets in underserved areas, recognize the potential in empathic leadership teams and understand that solving social problems often creates new markets. Many policymakers, corporate boards and business executives have accepted a false narrative that widening income and wealth gaps are inevitable, and that investments in Main Street and the workforce are drains on capital. They are not. These disparities are the consequences of deliberate choices to ignore long-term prosperity in favor of short-term extraction.
The path forward: from theory to action
The world today is objectively positive-sum, yet our thinking remains trapped in zero-sum paradigms. This mental model serves those who profit from fear, anxiety and artificial scarcity, but it doesn’t serve our nation or our economy.
We need concrete steps toward a positive-sum future:
- Business leaders: Implement empathy training, fair wages, predictable schedules and broad-based employee ownership programs. Remember that treating employees as assets rather than expenses yields higher financial returns in the long run.
- Investors: Allocate all or a portion of your portfolio to investments that deliberately generate both positive financial and social returns. Start with at least five percent and grow from there.
- Policymakers: Create more tax incentives for companies that facilitate worker ownership and invest in worker training and development. Consider expanding capitalization of human capital costs to reflect that people are more important than property, plants and equipment. That long-term investment in human capital should be rewarded for the positive externalities produced for society.
- Consumers: Support businesses that invest in their communities and treat their workers fairly. Your purchasing power is more influential than you might think.
As Albert Einstein wisely observed, “We cannot solve our problems with the same thinking we used when we created them.” By embracing positive-sum economics, we can create an America where upward mobility is more widely available, where economic growth lifts all boats and where we recognize that our individual success is inextricably linked to our collective flourishing.
The zero-sum game is over. The positive-sum future awaits. Let’s build it together.
