The Fallacy of Thinking in Terms of Fixed Pie from "summary" of Economics in One Lesson by Henry Hazlitt
The belief that the total wealth in the world is a fixed amount is a fallacy that is deeply ingrained in the minds of many people. This fallacy leads to the mistaken idea that one person can only gain at the expense of another, that there is a fixed pie of wealth that must be divided up among individuals. This fixed pie fallacy ignores the fact that wealth is not static, but dynamic. It fails to account for the fact that new wealth can be created through human ingenuity, innovation, and productivity. When individuals engage in productive activities, they can increase the overall size of the economic pie, benefiting not only themselves but society as a whole. By thinking in terms of a fixed pie, individuals may be led to believe that they must compete with one another for a ...
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