Immigration and the labor market
In a December 2015 episode, Bob Zadek framed the pre-San Bernardino opposition to immigration as having been “allegedly founded in—economics, in sort of protecting jobs as if it’s a zero-sum game,” and asked Alex Nowrasteh how immigrants affect the U.S. economy Immigration Nation: Nowrasteh Sets it Straight Again (2015). Nowrasteh answered that immigrants “expand the supply side of the economy” as workers, entrepreneurs, inventors and investors, and also increase demand as consumers and customers, producing “a larger expansion of the U.S. economy.”
On whether immigrants compete with Americans for jobs, Nowrasteh said the general answer is no, because most immigrants have different skills from most Americans: many are very low-skilled on the low end, such as Mexican illegal immigrants, and very skilled on the high end, such as Indian, Chinese and East Asian immigrants with engineering or computer skills in Silicon Valley, while most Americans are in the middle with some college or a college education. Even at the same skill or education level, he said, immigrants and natives have different skills, the chief one being English language ability. Lower-skilled immigrants, he argued, push lower-skilled Americans up the wage distribution; in a restaurant, low-skilled immigrants are the busboys, kitchen workers and janitors while low-skilled Americans are the waiters, waitresses and hostesses, and 30 years ago those Americans would have been washing dishes.
Zadek put the case more bluntly: even if immigrants were competing for the same jobs, lower wages mean lower costs for goods and services and so a lower cost of living, while the native who must accept a lower wage is simply receiving the market value of his or her skills. Nowrasteh added that few Americans are losers at that skill level, that wages have fallen due to immigration in occupations such as agriculture and some other low-skilled areas, and that Americans have moved out of those industries into more highly paid ones. Zadek concluded that while some Americans are negatively affected, the overwhelming majority are positively affected, and that focusing on the one adversely affected person while ignoring the hundreds of thousands who benefit gives a distorted view.
Adam Smith and the end of the zero-sum world
A March 2016 episode with Skipper Young, promoting The Wisdom of 76: Young America’s Way for Wealth, located the concept’s intellectual turning point in 1776 Skip Young on The Wisdom of 76: Young America’s Way to Wealth (2016). Young called 1776 the “double magic year” because two new worlds were born within 25 weeks: Adam Smith published The Wealth of Nations on the 9th of March, and the nation began on July 4th. He called The Wealth of Nations the first great economics book, said Adam Smith is to economics what George Washington is to the nation, and was careful to say Smith did not invent capitalism, which Young thinks is innate in us, but saw it and saw how governments could lessen their activities and let people be freer.
Before Smith’s book, Young said, if one person got richer it usually meant someone else got poorer, and if a nation got richer it usually meant another nation got poorer — “It was close to a zero-sum game.” Zadek restated this as wealth not being created but only moving around, and said the phrase used today is zero-sum game, attributing to socialists and others who do not subscribe to a free market the belief that wealth is finite and must be moved around politically to those who deserve it. Zadek contrasted Smith, who saw no need to take wealth from one and give it to another and believed that if humans are left alone they will create wealth. Young said Smith showed for the first time how nations and their people could become ever wealthier, noted that in some centuries the standard of living rose perhaps 1% and was basically flat, with plagues briefly raising standards before more children returned things to where they began, and said no one has given the world greater wealth than Adam Smith, and with greater wealth comes greater health.
In the same episode’s later segment, Zadek called the invisible hand “the secret sauce of free market capitalism” and noted that Smith used the phrase only once in 900 pages Skip Young on The Wisdom of 76: Young America’s Way to Wealth (2016). Young called the two words the most magic in the English language: Smith is saying to let people alone in commerce, and the invisible hand leads them on a path that makes them wealthier and makes others wealthier. He illustrated with index investing — buying and reinvesting dividends makes you wealthier and helps create jobs — and said “this is not a zero-sum game.” Zadek described the invisible hand as the collective effect of everybody’s free choice, individual decisions unimportant to the world whose aggregate raises all boats, and compared it with centrally managed systems such as socialism, communism or fascism, where there is a visible hand “cloaked in chainmail” that can never be as wise as the collective invisible hand of millions of people each deciding for their own self-interest. Young noted that The Wealth of Nations is a slog, very dense, and that the two words appear only once and are a cornerstone of Smith’s writing.
Free trade and mutual gain
Richard Epstein, in a June 2017 episode on Trump and free trade, began by taking geography out of the question: two people come together, one sells and the other buys goods or services Trump Vs. Free Trade with Richard Epstein (2017). One way to think about the transaction, he said, is as a “zero-sum game,” meaning that after it is finished neither side is better off than before — at which point the whole thing becomes a puzzle, since no one would expend resources to put the trade together if they were no better off, leaving only the resource loss of transactions costs. For free trade to matter there has to be a gain, and the gain comes from the buyer valuing the goods more than the price paid and the seller preferring the money to the goods surrendered. Epstein traced this to Adam Smith’s account of enormous gains from trade through specialization: a seller specializes in making a commodity and sells it, and the buyer uses the pre-packaged thing to produce outputs to sell onward, with the same progression of gains following.
Epstein then turned to the Marxist definition of exploitation through market exchanges, which he called an Orwellian situation. Exploitation, he said, is appropriately used for theft, where something is taken without consent, leaving the taker a little better off and the other a lot worse off; a world existing only through theft would be solitary, poor, nasty, brutish and short. Exploitation is not the correct term here, he said; what occurs is mutual gains through beneficial transactions. Putting this in a geographical setting, he said the easy case is a single sovereign binding both buyer and seller, backing both promises so that people can trade along the dimension of time — doing something now and being paid later, or the reverse — and government enforcement of contracts increases the possibility of gains for the party.
Rail transit as a zero-sum game
A April 2020 episode with Randal O’Toole supplies the show’s clearest instance of a guest applying the term approvingly to a policy Never let a good crisis go to waste (2020). Zadek raised the connection between real estate values and mass transit, noting that committing massive capital expenditures to a rail line means a permanent decision about which neighborhoods to favor, that neighborhoods move into and out of favor — Brooklyn was undesirable 25 or 30 years ago and is now a hot neighborhood — and that rail lines cannot be moved around like dominoes where the people are, so the decision distorts where people want to live, much as schools do.
O’Toole answered that it depends on the kind of train: a streetcar that cannot move many people will have no influence on land values, light rail that moves modest numbers will not have much, and a heavy rail system such as San Francisco BART or the New York subway that moves lots and lots of people can influence land values. But, he said, “it’s a zero-sum game”: a new subway or elevated express line might increase land values in one part of a city, offset by a lack of increase somewhere else, so overall urban values do not change at all. Mostly, he said, rail riders are former bus riders and some former auto drivers, so little new traffic is generated and there is no new economic activity. A new freeway, by contrast, carries people who were not driving before — what opponents call “induced demand” — producing more economic activity, better jobs, and products and services reaching customers, which adds to the growth and wealth of the urban area. Highways can do that, he said; mass transit for the most part cannot, and all it does is have a zero-sum game where one person wins and another loses and the overall wealth of the community stays about the same.
Across episodes: the term’s two uses
The excerpts show the same phrase argued in more than one episode, but not a single developing argument. In the 2015, 2016 and 2017 episodes, Zadek, Nowrasteh, Young and Epstein all use “zero-sum game” as the error to be refuted: immigration, Smithian economics and free trade are each said to create wealth rather than merely move it, with Nowrasteh supplying the labor-market mechanism, Young the historical turning point in Adam Smith, and Epstein the logical structure of mutual gain. In the 2020 episode, O’Toole uses the same term as a description rather than an error, calling rail transit a zero-sum game that shifts land values and riders while leaving the community’s overall wealth about the same, and contrasting it with freeways that generate new activity. The later treatment thus does not revise the earlier ones; it applies the concept to a different subject, with the host’s framing in each case doing the work of introducing the term.
What the sources do not cover
The excerpts do not define the term formally, give its origin as a phrase, or name any game theorist. They do not state the city or state in which any episode was recorded, the name of any bill or statute, or the holding of any case. They do not say when The Wealth of Nations was published beyond the 9th of March in 1776, nor what became of the immigration, trade or transit policies discussed. The final excerpt breaks off after Bob Zadek’s name, so nothing from that segment is reported here.