Deflationary self-protection by individuals is zero-sum against everyone else
Evidence
In contrast, deflation, what austerity demands, produces a much more pernicious politics, since any person’s first move of self-protection (taking a pay cut to stay in a job, for example) is actually zero-sum against everyone else’s move (since doing so lowers that person’s consumption and shrinks demand for everyone else). It’s that fallacy of composition again. There are no winners, only losers, and the more you try to win, the worse the outcomes, as the Eurozone periphery has been proving for the past several years. — Mark Blyth, Austerity, 47
Categorization
- DEFINE: Concrete illustration of the fallacy of composition as applied to deflation: individual pay-cut self-protection shrinks aggregate demand.
- XREF: The fallacy of composition here parallels the public-good and collective-action problems in Milgrom’s trade-institutions work and standard coordination-failure logic. — connects to: Individual freedom is achieved only through the freedom of others — Simone de Beauvoir, The Ethics of Ambiguity, 144; People derive self-worth from group membership and denigrate outsiders to protect it — , Rudman, Laurie A - On the Nature of…, 1495; Self-enhancement serves self-protection by reshaping environments or group standards — , Rudman, Laurie A - On the Nature of…, 1086 (+1 more)
Broader Connections
- Individual freedom is achieved only through the freedom of others
#contradicts(0.85) — Simone de Beauvoir, The Ethics of Ambiguity, 144 - People derive self-worth from group membership and denigrate outsiders to protect it
#exemplifies(0.80) — , Rudman, Laurie A - On the Nature of…, 1495 - Self-enhancement serves self-protection by reshaping environments or group standards
#qualifies(0.75) — , Rudman, Laurie A - On the Nature of…, 1086