Baking a Bigger Cake
Why Zero-Sum Thinking Misses the Point
Last week, we hosted a private screening of Monsters—a charming short film where children imagine a world taken over by monsters. It was part of the Connect and Create showcase at this year’s Norfolk and Norwich Festival, and it was full of moments that made you smile, pause, and reflect.
One that stuck with me was a young lad talking about how he manages his anxiety:
“My reaction when I saw it on the news was panicking, but then I just calmed down, calmed down, calmed down... by eating chocolate cake.”
There’s not much a good slice of cake won’t improve!
It reminded me of a book I was given over 20 years ago—Thriving on Chaos by Tom Peters. One idea that’s stayed with me is the “market creator”: someone who grows their business not by taking someone else’s slice, but by baking a bigger cake, by finding new markets, new opportunities. It’s a powerful way to think about business—not as a zero-sum game of winners and losers, but as a positive-sum game where everyone can benefit.
In my day job, I often find myself frustrated by how investment markets are portrayed. The narrative tends to be zero-sum: for every person who buys the next Nvidia, there’s someone who sold too soon. It’s an oversimplification that feeds the idea that investing is just another form of gambling.
But the truth is more nuanced. Over centuries, economic activity has driven equity prices steadily upwards. My colleague James Bacon uses a chart of the US stock market going back to 1800—it’s basically a straight line. The zero-sum element only comes into play when you try to beat the market. There’s a finite pool of value, and for every winner, there’s a loser. If you want the long-term benefits of investing without the zero-sum risk, just track the market. That’s our approach.
Unfortunately, zero-sum thinking is on the rise. It’s challenging the post-war liberal consensus that collaboration and compromise lead to better outcomes for all. The Trumpian worldview sees everything as a battle of winners and losers, with little room for nuance. In that frame, even something as complex as the war in Ukraine gets boiled down to a simplistic logic: had Zelensky not resisted, there’d be no war. It’s flawed, but it’s the kind of thinking that fuels populist rhetoric.
And it’s not just Trump. Across the West, more people feel they’re being short-changed—whether by immigrants “stealing” jobs or by the wealthy getting richer at others’ expense. These sentiments cut across traditional political lines.
So what’s driving this shift? Harvard economist Stefanie Stantcheva points to the financial crisis and years of stagnant living standards, from the US rust belt to post-industrial Britain. For the first time since the Enlightenment, many people feel they’ll be worse off than their parents—and they’re not wrong. Whatever you thought of her politics, Theresa May was onto something when she highlighted the “just about managings”—people doing everything right but still struggling to get ahead.
Zero-sum thinking isn’t just a bias; it’s shaped by lived experience. When jobs are scarce and resources limited, it can feel like someone else’s gain is your loss. But policy matters. It can either reinforce that scarcity mindset or help build a more positive-sum world.
Policies that expand opportunity—like quality education, accessible healthcare, support for low-income families, investment in innovation, and environmental protection—can create win-win outcomes. They help grow the pie and reduce the sense of scarcity that fuels zero-sum thinking.
Now’s not the time for shouting and marking our territory with flags. It’s time to bake a bigger cake – save me a slice!