Let me expand upon my one line explanation. I apologize for being terse last time.
Let's say the stock market increases at 10% per year. This growth is driven by more capital being invested in the market each year. That means everyone in the market earns 10% interest every year, right? Well, in reality, that's not the case. Some people earn 30% and some people lose 20%. In fact, if anyone earns over 10%, that means that someone else must be earning less than 10%. So, maybe it's a 10-sum game, but most people still use the term "zero-sum game" to describe the situation.
Distribution of wealth and standard of living work the same way. Everyone's standard of living is increasing at 10 moon units per year. This growth is primarily driven by technology. However, if people in emerging markets are to have their standard of living increase at 15 moon units per year (which it is, and that's great), then someone else will have their standard of living increase at less than 10 moon units per year. That doesn't mean that our standard of living will decrease (although I wouldn't rule that out); it just won't increase as rapidly.
This is only true if the bar is rising at a pace regardless of increase in participants.
In reality, increases in trade raises the bar faster for everyone, often so much that it offsets the drop from the increased competition.
So say both country A and country B are increasing at 10 moon units per year. Country B trades as a net exporter with country A, and takes 1 moon unit per year from country A. However, the increase in economic activity boosts 2 moon units per year for everyone. Now country A is increasing at 11 moon units per year, and country B is increasing at 13 units per year.
> "In fact, if anyone earns over 10%, that means that someone else must be earning less than 10%. So, maybe it's a 10-sum game, but most people still use the term "zero-sum game" to describe the situation."
You fixed the rate of increase. Jesus. Obviously it'll look zero-sum under those circumstances. The point is, the more efficiently the stock market's played, the faster it grows overall (in theory). It's not zero-sum.
Let's say the stock market increases at 10% per year. This growth is driven by more capital being invested in the market each year. That means everyone in the market earns 10% interest every year, right? Well, in reality, that's not the case. Some people earn 30% and some people lose 20%. In fact, if anyone earns over 10%, that means that someone else must be earning less than 10%. So, maybe it's a 10-sum game, but most people still use the term "zero-sum game" to describe the situation.
Distribution of wealth and standard of living work the same way. Everyone's standard of living is increasing at 10 moon units per year. This growth is primarily driven by technology. However, if people in emerging markets are to have their standard of living increase at 15 moon units per year (which it is, and that's great), then someone else will have their standard of living increase at less than 10 moon units per year. That doesn't mean that our standard of living will decrease (although I wouldn't rule that out); it just won't increase as rapidly.