How is this for a title? As you will see how significant "pie" is in economics.
One of the most significant parts of economics is the concept of "pie". Most stress that we need to increase the sized of the pie. The problem is that you never see anyone talking about the size of the pieces of pie that the average person gets. It does not matter how big the pie is if the number of mouths is much bigger than the pie. Look at it this way. If the size of the pie increases slower than the number of mouths, the size of the pie that each person gets will be smaller. You never hear anyone mentioning this critical fact.
What we need to agree on is a simple objective that goes beyond simply the size of the pie. Our objective needs to be focused on the size of the pie each person ends up with. A finer point might be to focus on the "median" size of the portion of pie rather than the average size. As you will notice, if some at the extreme gets a very large piece of pie, it can raise the average. That is why we need to focus on the median. The median is where there are 50% of the people with more and 50% with less. If our system had total "equity" as it's objective, then the average and the median would be the same.
Once we agree on a simple objective we can then look at individual actions and see if they work for or against our objective. How else could one judge the quality of a decision if we did not first have a clear objective? See why this is so critical?
I like to look at our natural resources to prove my point. The USA only has so much good farm land, water, oil, timber, coal ant natural gas. That is a fact. As our population increases, it has to be clear to all that there is less of this pie per person than before. That means we have less oil and gas per person as our population increases. These same people might work in jobs that make a bigger pie, but we have to accept that the pie produced from our natural resources goes down at the same time. Now, is the net total a bigger pie or a smaller pie? Often it turns out smaller and that is the problem.
In the above paragraph I proposed that people or workers actually produce a bigger pie, but you will notice that the high tech workers produce "more". How much pie does the person who mows your lawn produce. Does anyone else in the world want to buy their service? NO! Why is that? It is because they can purchase that same lawn mower for much less. Starting so see how this works?
Next time you see a politician or an economist talking about a bigger pie, but not about the size of the pie the median person will end up with. With an illegal immigration greater than 1% of our population along with a natural growth in our population of about 2%, if the size of the pie does not grow greater than 3% there is no way that the median person will have a better quality of life. If most of those who benefit from the growth are at the upper end and only the average increases, we are actually going backwards!
