Take all the pie you can, we'll make more

Jay Nordlinger is posting his notes from the Annual Meeting of the World Economic Forum in Davos, Switzerland. This thought jumped out at me:

It is axiomatic at Davos — among the people I tend to meet — that an economy, including the world economy, is a pie. To the extent that one person has a bigger piece, another person has a smaller piece (and there are no other pies in the oven).

I suppose that is sometimes true. For example, when Yasser Arafat dies a billionaire, one can safely assume that he ran off with most of the Palestinian pie. While the pie analogy could be useful when discussing those third world leaders who squirrel away what assets their countries have in Swiss bank accounts, people who take this attitude are never referring to the likes of Arafat. Such references are always directed at the United States.

Presumably this attitude results from socialism having much more influence in Europe than in the US. To socialists, all economic transactions are win/lose, never win/win. They never try to make more pie. It never occurs to them, for example, that those folks with all that pie burning a hole in their pockets (to mix metaphors) might want to trade some pie for an item or service that you have to offer. Oh look, now you have more pie. You might even have to hire some pie lovers to help you out.

And then there's technological innovation and economies of scale working to give your pie more purchasing power. Now if I can come up with three ways to make more pie, why can't those nuanced thinkers of Europe figure it out? For great examples of pie making (with no annoying pie analogies), I highly recommend this article by Virginia Postrel.