What causes prosperity?

How did rich countries get rich? One answer is that they exploited poor countries. Exploitation has occurred, but that is not how wealth and widespread prosperity are created. This misconception about where wealth comes from typically rests on the zero-sum fallacy, the belief that for one person or nation to gain, another must lose. This mistake goes by different names: zero-sum thinking, the fixed-pie fallacy or fixed-pie bias.

The error of zero-sum thinking, applied generally to the economy, should be quite obvious. Consider an example of wealth creation. The invention of the internal combustion engine, combined with technology for extracting and refining crude oil, turned a previously worthless, sticky substance, into an immensely valuable resource (“black gold”). Its use, in turn, revolutionized transportation, enabling people around the globe to travel and deliver goods farther, more quickly, and more economically than ever before. The Ford Motor Company’s success (and the success of other pioneering companies in the car industry and adjacent industries) created new jobs, new supply chains, and new wealth, which has spread throughout the world.

Wealth is produced when creative human beings devise new or more efficient ways to meet the wants and needs of others. Such improvements have allowed the world’s population to grow exponentially while simultaneously decreasing the proportion of that population living in poverty. This could not have been possible if global wealth were a zero-sum game.

The zero-sum mindset

Zero-sum assumptions quietly shape how we see trade, business, and policy. They push us toward top-down fixes and away from the practices and institutions that actually expand opportunity.

Many popular policies today reflect the zero-sum assumption that one side’s win must produce another’s loss. For example, protectionist policies advocate tariffs and quotas, assuming that if foreign producers “win” sales in the domestic market, domestic producers must “lose” sales and domestic workers will “lose” jobs. Another example is agricultural subsidies. These assume that every dollar foreigners earn is a dollar domestic farmers lose. Public subsidy dollars are taken from taxpayers and redistributed to a favored few to “keep those dollars here.” A final example is the claim that rich countries must compensate poorer ones through aid transfers for past exploitation and colonization. This view treats wealth as a fixed pie to be reallocated rather than something people create through innovation, experimentation, and enterprise. Protectionism, agricultural subsidies, and foreign aid often do more harm than good by creating the conditions for rent seeking, cronyism, and, in the worst cases, oligarchy.

Here’s an alternative model: Instead of a fixed pie to allocate, wealth is more like a tree. Given the right conditions, that tree will grow and drop seeds. Then those seeds will grow to trees and drop seeds, and so on, until a forest has sprung up. We need to trust that people, given the right conditions, have the talent and the drive to create wealth for themselves and their families.

So what are the conditions? They include secure property rights, the rule of law, honest and predictable governance, freedom to enter wider networks of productivity and exchange, and a culture of entrepreneurship. In short, we should encourage policies that shift the focus from aid and protectionism to trade and enterprise, enabling people to create value through voluntary exchange so both rich and poor communities can grow.

Overcoming the zero-sum mindset

The zero-sum fallacy is rooted in an often materialistic view that reduces human beings to mere consumers. But a view enriched by economic history and theology sees human persons not simply as consumers but as image-bearers of God who are creators and producers. The Bible reveals our responsibility to participate in the creative work of cultivating His garden and bringing forth new fruits. “Be fruitful and multiply,” God says to Adam. As we see in the Parable of the Talents, and indeed throughout Scripture, this mandate entails more than mere management of existing resources but also the production of valued goods and services, that is, wealth creation, where “wealth” is not measured is not measured by mere dollars and cents alone.

This theological vision aligns with the economic insight that wealth is dynamic, not fixed. It does not excuse exploitation or corruption. Rather, this vision calls for justice and demands that civic and economic institutions reflect the full truth about the dignity and creative capacity of every person. Because people are made to create and serve, we need to move our thinking beyond the cramped vision of zero-sum assumptions—in which redistribution becomes the paradigm—and instead seek to create the conditions and institutions that empower people to create new prosperity for themselves, their families, and their communities.