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Boyer & Petersen (B&P) list eight folk-economic beliefs (FEBs). The first (FEB 1) is “International trade is zero-sum, has negative effects.” I agree with this analysis. FEB 2, “Immigrants ‘steal’ jobs,” is also directly associated with zero-sum thinking. However, there are numerous additional FEBs (not considered in the target article) that stem from the zero-sum assumption. These include: beliefs regarding taxation; beliefs regarding certain forms of economic regulation (in addition to B&P's FEB 8, “Price-regulation has the desired effects”); beliefs regarding inequality; and the core of Marxist economics. Zero-sum folk economic thinking tends to be short-term and deals with distribution of the pie; standard economic thinking deals with the size of the pie and is longer term. (This comment is based on Rubin 2002; 2003; 2014).
Using B&P's notation, I list 4 more FEBs:
- FEB 9: The best way to measure a tax system is in terms of its “fairness.”
- FEB 10: Labor market regulations, such as minimum wages, have no impact on levels of employment.
- FEB 11: A society can reduce or eliminate inequality with no adverse impacts.
- FEB 12: A desirable economic policy can be based on “From each according to his ability, to each according to his needs.”
Each of these implications may be derived from zero-sum thinking. I show why they are incorrect, and why they can lead to incorrect policy implications.
FEB 9: The best way to measure a tax system...