I’ve noticed a persistent myth floating around in financial discussions that really needs addressing. Many people believe wealth is a zero-sum game – that for someone to become rich, others must become poorer. This “fixed pie” theory isn’t just wrong; it reveals a fundamental misunderstanding of how economies actually work.
Recently, I watched Dave Ramsey tackle this exact misconception when a listener named Justin asked about it. Dave’s response was characteristically direct: this fixed pie mentality shows “ignorance of basic economics.”
He’s absolutely right. Economies aren’t static – they grow, shrink, and evolve constantly. The American economy of 2023 bears little resemblance to that of 1776. If wealth were truly just being redistributed among the same fixed amount, we’d all still be living in log cabins and hunting with muskets.
The Candle vs. The Pie
One of the most powerful analogies Dave shared comes from Rabbi Daniel Lapin’s book “Thou Shalt Prosper.” Rabbi Lapin explains that the economy isn’t like a pie where getting a bigger slice means someone else gets less. Instead, it’s like a candle – when you light another candle from yours, you don’t lose any light; you simply create more brightness in the room.
This perfectly captures how wealth generation actually works. When Apple creates innovative products people want to buy, their success doesn’t make others poorer. Their value increases because they’ve created something new that adds to the overall economy.
Consider these examples of how wealth is created rather than just redistributed:
- Entrepreneurs develop new products that solve problems
- Companies improve efficiency, creating more value with fewer resources
- Innovations create entire industries that didn’t exist before
- Investments help businesses grow, creating jobs and opportunities
Each of these activities expands the economic pie rather than just reslicing it. When we look at developed versus undeveloped economies, the difference isn’t that one received a “larger pie from God” as Dave puts it. The difference comes from innovation, industriousness, and service that expands the total goods and services produced.
The Victim Mentality Trap
What I find most troubling about the fixed pie theory is the hopelessness it breeds. Dave colorfully describes this mindset as having “Eeyore as their spirit animal” – constantly believing things are bad and will always be bad, that the “little man can’t get ahead because the big guys are taking all the pie.”
This victim mentality is incredibly damaging because it removes personal responsibility. It’s easier to blame billionaires for your financial struggles than to face the person in the mirror. As Dave bluntly puts it, “I’m going to blame Dunkin’ Donuts ’cause I have a belly ’cause I can’t stay away from their donuts.”
The truth is that your financial situation is primarily influenced by your own choices, not by what Jeff Bezos or Elon Musk are doing.
Wealth Doesn’t Create Character – It Reveals It
Another misconception Dave addresses is the idea that wealth itself is somehow evil. He makes a brilliant point: “Money is just like a brick. You can build a hospital with it or you can throw it through a window. The brick doesn’t care.”
When people receive money, it doesn’t transform them into something new – it simply reveals who they already are. As Dave explains, “Money ruined my children? No, darling, your children were already idiots. You handed them money and proved it.”
This distinction matters because it shifts our focus from demonizing success to developing character. The problem isn’t wealth – it’s how some people choose to use it.
The Bible doesn’t say “money is the root of all evil” as many misquote. It says “the love of money is the root of all evil” – pointing to character, not currency.
I believe we need to move past this scarcity mentality and embrace an abundance mindset. The economy isn’t a fixed game where winners create losers. It’s a dynamic system where innovation, hard work, and service can create prosperity that benefits many.
The choice between seeing yourself as a victim of economic forces or as someone capable of creating value will largely determine your financial future. I know which perspective I’m choosing. What about you?
Frequently Asked Questions
Q: Is it really possible for everyone to become wealthy, or are there limited resources?
While physical resources have limits, wealth creation isn’t just about resources—it’s about creating value through innovation, efficiency, and problem-solving. The global economy has expanded dramatically over centuries because humans keep finding ways to create more value from the same or fewer resources. This is why standards of living have risen globally despite population growth.
Q: Don’t billionaires hoard wealth that could be helping others?
Most billionaire wealth isn’t sitting in cash but is invested in companies that create jobs, products, and services. When someone like Jeff Bezos is worth billions, that money is primarily in Amazon stock, which represents ownership in a company that employs over a million people. The value comes from creating something many people find useful, not from taking money from others.
Q: Why do some countries remain poor while others prosper if wealth can be created?
Economic development depends on many factors including governance, property rights, education, infrastructure, and cultural attitudes toward entrepreneurship. Countries that struggle economically often have systems that discourage or prevent wealth creation through corruption, excessive regulation, or lack of basic institutions. The difference isn’t that wealthy nations took from poor ones, but that some economic systems better facilitate innovation and growth.
Q: How can I shift from a scarcity mindset to an abundance mindset?
Start by focusing on creating value rather than competing for existing resources. Ask yourself what problems you can solve or what services you can provide that others would willingly pay for. Invest in developing skills that increase your ability to create value. Surround yourself with people who have positive, growth-oriented attitudes. Finally, practice gratitude for what you have while working toward what you want—this helps break the cycle of comparison that feeds scarcity thinking.
