Positive-Sum Games
TL;DR
Trade is a positive-sum game where both parties benefit, creating wealth out of voluntary cooperation.
Types of Games
- Positive-Sum (Wealth Creation): “I want your bread, you want my eggs.” We trade, and we both end up better off than before. Total wealth in the system increases.
- Zero-Sum (Wealth Transfer): A game like Poker where for one person to win, another must lose. Total wealth remains the same.
- Negative-Sum (Destruction): Theft or violence. “I punch you and take your bread.” Wealth is transferred, but also destroyed (your face hurts, resources are spent on weapons instead of production).
The Role of Money
Money is a tool that allows positive-sum games to scale. It solves the Double Coincidence of Wants, allowing a bread-maker to trade with an egg-maker even if they don’t need each other’s goods at the exact same moment.
Why It Matters
A sound monetary system encourages society to focus on positive-sum games (production/trade) rather than negative-sum games (theft/debasement), leading to a more peaceful and prosperous civilization.