Noah Smith, Zero-sum economics keeps failing, Noahpinion, Jan. 18. 2026.
The biblical story called the Judgement of Solomon isn’t just meant to illustrate what a wise king Solomon was. It’s also supposed to demonstrate a central principle of economics, and of society in general — that the world isn’t a fixed lump of resources waiting to be divided up. In the story, two women are arguing over which one is the real mother of a baby; Solomon proposes to cut the baby in half and give half to each woman, causing the baby’s actual mother to be instantly horrified. The lesson is that a baby is much more than the sum of two halves of a baby.
I feel like modern American leaders and intellectuals often forget this important lesson. There are plenty of thinkers and leaders on both the right and the left who think of society’s main task as slicing up and handing out a lump of “resources”. And yet when they make economic policy based on this idea, it keeps failing.
A prime example is Trump’s immigration crackdown. During the 2024 presidential campaign, Trump and his people swore up and down that kicking millions of illegal immigrants out of the country would result in a bonanza of jobs for the native-born. They probably still believe this. But people are now flowing out of the United States on net, and native-born employment rates haven’t risen:
Smith then presents 2 graphs and 2 tables that make that argument.
If the Trump administration had bothered to ask economists, they would have replied that the overwhelming majority of the empirical evidence indicates that immigration — even low-skilled immigration — doesn’t take jobs from Americans. Immigrants also produce goods and services, growing the pie and creating labor demand that helps provide work for native-born workers. But the only economist they seem to have bothered to ask was George Borjas, a man who has spent his life unsuccessfully trying to prove that immigration is bad for America. The new jobs numbers illustrate the failures of Borjas’ zero-sum economics.
Smith then presents a chart making the same point about tariffs.
Zero-sum thinking failed on immigration because the U.S. economy isn’t a lump of labor. It failed on tariffs because the global economy is not a lump of manufacturing.
Now it’s also probably going to fail Trump on geopolitics as well. Trump recently overthrew the leader of Venezuela, and he has made it clear in speeches and statements that one of the reasons he did this was to seize control of the country’s oil.
And now Greenland:
Or consider Trump’s desire to conquer Greenland. Simply adding a large chunk of land to America’s map would not mean riches for the U.S. economy. The U.S. already has access to Greenland’s natural resources and shipping routes; conquering the island would simply earn the enmity of both the Europeans and of Greenland’s people themselves. The U.S.’s previous relationship with Greenland was positive-sum and cooperative; switching to zero-sum piracy would not be an improvement.
Smith then goes on to criticize progressives and leftists for zero sum thinking as well.
I note that the notions of zero sum and non-zero sum interactions are from game theory, which is post WWII. I’m pretty sure it’s rank 4 thinking, to invoke the theory of cultural or cognitive ranks that David Hays and I have developed. I wonder how far such thinking is distributed in the population. The popular notion of win-win thinking derives from game theory; it’s zero sum games without the technical analysis. One can “get” the idea of win-win situations without understanding the game theory analytical account. But I suspect that such understanding is purely local to the situation and doesn’t lend itself to more general reflection about human affairs.
Anyhow, I recommend reading Smith’s whole column
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