Let's say I take $1 from you, and give x (where x < 1) cents to someone else, when my friend used to take $2 from you and give y (where y < 2) cents to someone else. Which of these situations constitutes a net gain?
It is hard to say who gains more in a transaction.
What can be said is that in most transactions both parties walk away with more value. It is guaranteed to be a positive sum game -- value is guaranteed to be created.
The violation of this rule tends to happen if one or both parties will lose some value if they do not make the transaction, in which case they will try to minimize loss rather than maximize gain as measured by the value they entered the transaction with. This is the essence of exploitation.
These more varied classes of transactions can be a positive sum game -- where one party gets more value than the other loses, a zero sum game where they cancel out or a negative sum game where one gains less value than the other loses or they both lose but less than they would without the transaction having taken place. It is not guaranteed to be a positive sum game and value could be destroyed overall.
This simulation, where wealth is maintained at a steady state not only overall but within every transaction, is not really possible.
While they're welcome to improve their odds in our imperfect-information game, we should also be allowed to play in our interest by disallowing them information.
This is not about the total gain of both sides: Almost every transaction is positive sum. However; why should I simply accept the 90/10 distribution of the excess in their favor when I can aim for a favorable distribution for myself too?
Some of the policies you benefited are from a zero sum game, so your gain is someone else's loss. When you benefit, you turn a blind eye to the negatives (this is the horse blinder reference).
It's simple, right? If you can make $x and your apparent return is $y, I will take as much of your surplus $y-$x as I can. To make it acceptable, I will use other words, but I'm really just trying to capture your surplus and I will get it because you will tell people that $y is much greater than $Y (these true return) because you must inflate $y by some amount to represent the gain to you $y-$Y politically. An exploitable principal-agent situation.
Now, both you and I, without overt collaboration will align and help us both at the cost of the other guy who is paying for the whole thing. We can sucker him a little, because he's a gormless fool and his friends are useful idiots who will join in the deception.
Most post-Smith economics -- certainly everything in the market to tradition, classical or otherwise -- views normal transactions as net positive (and positive for each voluntary participant), not zero-sum.
But there's no reason to assume the degree of benefit is the same for each participant, and intuitively I think a more realistic net-positivr transaction rule with the gain randomly distributed would have distributionally similar results.
The Netherlands has this issue as well, points of income where your marginal gain is negative, ergo losing net money when making more gross money due to losing benefits. There are also indirect problems such as losing access to certain services (cheaper housing being one).
Obviously, this shouldn't be the case. Making more money gross should result in equal-or-more money net, without disadvantages, otherwise the incentive is gone.
If I steal 100K from you and turn it into 110K for me, that is a net gain. However, you might not find it very favorable.
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