The Lie of One Pie Fits All

I keep hearing a theory, that many people accept, because it is filled with common sense, and ties in with our everyday experiences.

If you view the economy as a pie, and someone takes more than their share of the pie (Say, a CEO with a $200 million salery), that means everyone else is paying for that with a smaller slice.

Now that theory does work for pie, in that once eaten, it’s gone. It works in a subsistance economy similarly, because you eat your salary. This is called a zero-sum competition, for every person who gets more than average, there has to be a looser who gets less than average.
Once you add in an imaginary unit of trade. . .say, money, the scenario changes. You get paid, and unless you are a strict penny pincher who beleives in the mattress stuffing banking method, you either spend your cash, or put it in a bank. In the bank, it gets loaned back out the door to someone else to spend.

The total of all transactions, including saleries, in an economy like ours, far exceeds the money supply. Even if you account for all that imaginary money that gets sent around as bits and bytes, your average bill or coin will take a tour of many pockets during any given month. (Let us not even delve into stocks, bonds, credit, etc.)

The fact that we keep trading around these units, means that even if that CEO is making 100 times your salery, you are likely carrying around or spending some of his money at any given moment.

So, going back to the pie analogy, we’re acually swapping crumbs, bits of filling, pie ingrediants and recipies around at such an astonishing rate that it creates an illusion that in fact there are a half dozen or more whole pies at any given moment.
So covet the $200 million a year CEO’s paycheck, or hate him for being dishonest, or be disgusted that you’re more competant and less paid, but do it as individuals, don’t just presume that the entire group of people with an above average salery is automatically stealing the difference from the below average.

There are a number of terrible inequalities in the world, many need to be addressed seriously, but all to often I find them being wrapped around a quazi truth like the theory I am debunking here. DON’T MAKE YOURSELF EASY TO IGNORE BY MARCHING BEHIND A FALSE BANNER. There are plenty enough true themes of inequality to rally behind.