FTA: In 2019 there were about 648 million people living in extreme poverty, subsisting on the equivalent of $2.15 per day or less. Those 648 million people made up 8.4% of world population — representing an improvement over 1990, when 35.9% of people lived on that little.

This seems to be the inverse of a zero-sum game: the West might have got a lot richer, but hundreds of millions of people were lifeted out of extreme poverty at the same time.

I wonder though - this growth has been largely taken out of ignoring an externality: the environment. We are living a global extinction event which will show up in the fossil record.

> equivalent of $2.15

But what does this even mean? The buying power of the dollar (or its “equivalent”) where those people live can be much higher than in the US. (Unless you mean to compare with living on that much per day in the US.)

Even then, $2.15 in Jackson, MS will get you further than $2.15 in NYC.

It means you have to spend close to your entire income to buy enough rice to not starve each day. Basically you are a subsistence farmer or equivalent, you don't have time or energy to do much else than work to not starve. You can't save up to buy a bike or a book, just work for food, all day entire life.

Add a bit more income and suddenly people can afford bikes and books if they save up, that is the lowest point necessary for people to start to pull themselves up and improve their society which is why it is so important to get as many people as possible to at least that level.

that reduction in inequality did probably come at the expense of the first world's middle class though, a process that may not be completed.

> This seems to be the inverse of a zero-sum game: the West might have got a lot richer, but hundreds of millions of people were lifeted out of extreme poverty at the same time.

Parent's thesis is that it's not a typical zero-sum game, but "a zero sum game with an ever increasing pie". It's an interesting idea; I don't know if there are formalizations of it.

Except it's not really a "zero sum game with an ever increasing pie".

Even if the pie remains exactly the same, it's not a zero sum game: simultaneous value for two people can be created out of nothing simply by the voluntary exchange of goods and services between them while everything else remains the same, see my other comment here for examples:

https://news.ycombinator.com/item?id=33719823

As another example more relevant for this context, poor people can exchange their time for money, which can then be used by them to acquire other things they value more than their time (food, housing, etc).

So yes, poor people can get themselves out of poverty even if the pie doesn't change. There are many examples of this happening (i.e. poor people lifting themselves out of property much more than the pie grows).

But of course, they can do that even better if the pie increases, i.e. if we get better at producing food and housing even more efficiently.

But even if the pie remains the same, value can be created out of nothing by the simple voluntary exchange of goods and services and poor people can also greatly take advantage of that.

It doesn't mean that some people have to lose something when poor people gain something. Both poor and rich people can simultaneously benefit from exchanging goods and services between them, while everything else remains the same.

If nothing else, because rich and poor people value things differently (and even among each group, at any point in time each person also values things differently to a great degree).

But if the pie increases, it's not really a zero sum game, is it?

I think the logical fallacy is thinking about the economy as a steady state system. At any given time there are finite resources, so it is "zero sum" in that the pie is finite and slices can only be shared once.

That's not zero sum. The pie can be 100% finite and yet, while everything else remains equal, two people can both benefit and be happier at the same time by simply (and voluntarily) exchanging a good or service between them, because they value those things differently at that point in time.

If I have 10 chickens and you have 10 goats, we can exchange between us and each of us would simultaneously benefit more from having 5 chickens and 5 goats each, even though the pie hasn't changed.

Or maybe I prefer to have 8 chickens and 2 goats, while you prefer to have 8 goats and 2 chickens, and both be happier as a result by exchanging between us while the entire pie has remained exactly the same.

So happiness/usefulness/value was created by the exchange of goods and services even though the pie hasn't changed at all.

Also, these preferences can change over time, so value can continue to be created even if the pie doesn't change.

I agree :)

Trading the goats for chickens doesn’t necessarily lead to more wealth though, that would depend on using the chicken or goats to improve productivity.

Next door to where I was recently staying I talked to some farmers that grow rice. They live a subsistence life, barely earning enough to survive by selling their rice. Trading their rice (equivalent to the goats or chickens in your example) does not make them wealthier. No matter how much rice they trade they aren’t going to get a bigger slice of the pie or make the pie bigger. They can’t grow other crops without investment in education, seeds, and technology, which they can’t afford.

So in that kind of real world scenario you cannot simply trade what you have or produce to increase your wealth. And for most people they don’t even own the chickens or goats or whatever. They don’t even own the land they live on (land is absolutely zero-sum). Increasing their wealth requires outside investment of education or technology, which isn’t trade but charity/redistribution. And not surprisingly, the way that has happened has been through government investment (redistributing the pie).

The Robinson-Crusue Econ 101 hypotheticals are divorced from the reality of economic development.

Entities without competition inflate prices until they capture all the extra new pie.

You receive increase in salary from your boss one year and next year it gets eaten away by monopolies like healthcare, education, housing and landlords.

Rent seeking may be zero sum, but the economy as a whole not. If we banned rent seeking the economy would likely grow faster. You could argue that's changing the game, but the economy is a weird one in that changing the game is part of the game.

We do ban a lot of rent seeking, though. For example, theft and fraud are rent-seeking activities. So the sorts of rent seeking that you still see are the ones that are hardest to ban.

Banning rent seeking doesn't work. Christianity tried banning interest and it just causes non Christians to offer lending services which then results in xenophobia. Interest payments partially derive from the liquidity services provided by market participants (think long opening hours and storing products ahead of time). Money effectively becomes a public institution where people voluntarily give it value in the form of liquidity services. That public institution is then kept in private hands who lend out money and then get to market these liquidity services as if they provided the public institution themselves. Basically someone else does the work and you get to benefit.

The answer to this problem is a demurrage fee on cash. Banks can then compete by offering the ideal negative rate that is in proportion to the liquidity premium. Banks can then use this fee to pay for liquidity services.

Is anyone doing this? No and I don't think it will happen in the next 30 years.

So rent seeking doesn't work because a long time ago one subpopulation banned it and it didn't work for the population as a whole? That's ridiculous. It's like saying prohibition in the US didn't work because booze was legal in Canada.

If there has to be poor people in order for there to be rich people, let’s make robots be the poor people.

The best endgame we can probably hope for is for there to be a sustainably small number of really comfortable, happy humans on this planet, and an army of robot servants/AI to keep us all fat and happy.

But the tiny proportion of very rich people can never get enough and therefore what will actually happen is we'll end up with an army of robot servants making the rich people richer and more comfortable, while the rest of us fight over the scraps.

I used to have the same utopic dream, but I have started to question whether a "small number" is actually desireable. If everyone on earth is working on great things, having more people might be better. Maybe even Elons vision of people spilling out into the stars.

Everyone on Earth is contributing to the destruction of the ecosystem. "Spilling out into the stars" is impossible, there aren't enough physical resources.

But there must be a subset that isn't? A perfect sized human resource footprint to match earths carrying capacity?

And I'm not aware of any current physical limits to space colonization? I thought the main limit was energy, and the sun has a lot to give for a while.

This is impossible with baseline humans, no matter how good you make education (without slipping into much heavier indoctrination).

Why is that?

That doesn't work. You have to pay the full costs of the robot yourself. If you hire a human the production cost of the human has been borne by their parents. In fact, employees are expected to pay for their own education via college tuition.

Let’s make other robots build the robots.

"The tiny elite (countries, billionares, intellectuals) ..”

Hold up. Intellectuals? How many 'intellectuals' own personal helicopters, mega-yachts, mansions? Or hey for that matter, even regular old homes?

What are you talking about? Everyone is eating bigger pieces of pie these days. A lot of the things we take for granted weren’t even available to wealthy people one or two hundred years ago. Electricity, running water, sewage, pharmaceuticals, vaccines, effective surgery, motorized transport, sturdy housing. Not to mention the increasingly universal availability of education. Sure, some people still live in squalor, but it’s a rapidly shrinking percent of the world.

the developing world does not have access to TV Refrigerator and to a lesser extent Cellphone and our society and tech as we know it cannot produce the energy they need to power these appliances

What do you mean by developing world? I live in Argentina, developing world afaik, and I have all of that. Majority of people here does.

The problem is that people think money is wealth, it is merely a claim to wealth. Each dollar is backed by a dollar of debt. That makes sense but it doesn't mean having more dollars means more wealth, it just means more dollars are necessary to run the economy.

If anything, a worshipping of money as wealth results in the opposite problem. People think they are wealthier than they are and then get disappointed, which is why governments and economists insist on permanent growth as debt increases.

A lot of wealth is not in the form of a stock but in the form of a flow. The wealth is alive so to speak and you must keep it alive if you want to benefit.