Zero Sum Mentality?

[Ibanez]

I keep reading at some blogs and posts how people overcame the Zero Sum Mentality they were taught. But what is the Zero Sum Mentality? Is it actually taught or is it picked up through our lives?

[mikeschu]

The best way to describe zero-sum mentality is by example. For instance, I bet you US$5 on a coin flip. There will be a winner who wins $5 and one person who loses it (i.e. give it to the winner). No additional "value" is created (or destroyed), so a coin toss is considered a zero-sum game.

In a more general sense, the zero-sum mindset is that there must be a winner and a loser in a given situation. Wikipedia has a more mathematical description if you so wish to understand it better.

[Keith]

Originally Posted by Ibanez

But what is the Zero Sum Mentality? Is it actually taught or is it picked up through our lives?

Essentially, it's just the belief that there's a limited amount of <whatever> and that, for you to get some, you have to take it from somebody else.

Like most beliefs, it's something we extrapolated from experience. And like most beliefs, we over-generalised.

In the context of wealth, it can be true but it often isn't. It's very untrue in the field of software and other intellectual property.

Let's say, for (very simplified) example, that you spend a month and invent a software package that halves the time required to calculate chemical reactions. Where previously the chemists in company X would produce $1m worth of benefit per annum, this software would enable them to work on twice as much and produce $2m per annum. The company pays you $500,000 for the software. You say "Woohoo!!".

This isn't a case of you're $500,000 richer and they're $500,000 poorer (ie. zero-sum). It's a case of you're both $500,000 richer. Wealth has been created (ie. not zero-sum).

That was pretty verbose, but hopefully it helps make things a bit clearer.