When does Short-Term become Long-Term? And Zero-Sum Thinking
Bart Binning, Ed. D.
Short-Term vs Long-Term
In examining ripples on a pond, the event that creates the ripple is the now, and the initial ripples moving through time are the short-term. The question then becomes, “when do we arrive at the long-term”, and why is that important. This question of long-term vs short-term is, I think, one of the seminal questions of the universe because given a set of facts, how we react to those facts can vary depending on our perception of short-term vs long-term. For example, in:
- neurology, short-term memory is the part of the pre-frontal lobe of your brain that stores information for a few seconds, to accomplish something that you have planned to do such as “carrying over” in a subtraction problem, or a persuasive argument that you are going to make as soon as the other person finishes talking. Short-term memory is transferred to other parts of your brain, through the hippocampus, to form long-term memory.
- finance or financial operations of borrowing and investing, what is considered long-term is usually above 3 years, with medium-term between 1 and 3 years and short-term under 1 year.
- stock market activities, there is empirical evidence that the short term is less than 47 days, and medium term between 47 and 101 days. 
- political economics:
- long-term is the period required for economic agents to reallocate resources, and generally reestablish equilibrium. The actual length of this period, usually numbered in years or decades, varies widely depending on circumstantial context.
- short-term is a period of time shorter than long-term. John Maynard Keynes, 1st Baron Keynes of Tilton, in a discussion on exchange rates as it relates to inflation and economic activity is noted to have said… “But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.” 
The question of short-term vs long-term is important in decision making because it is markedly easier making decisions during the short-term because during the long-term, all factors are variable. Forecasts of future event conditions are important in long-term decision making.
Zero-Sum Thinking is a psychological construct derived from Game Theory. It describes a general belief system where there is a finite amount of resources and goods that exist in a system, therefore one’s loss is another’s gain. It describes a world where there are winners and losers; it precludes the possibility of win-win scenarios. There is evidence that people have a tendency to judge situations, especially short-term decisions, as being zero-sum in nature.  To the extent that technology is not included as a possibility that would increase the amount of goods and services available, zero-sum thinking might be understood as the default way that humans think about resource allocations, which must be unlearned. 
In his lunch talk to Club 29 on February 25th, the eminent economist Dr. Russell Evans (https://vimeo.com/393751861) noted that for the past few generations several popular movies have had anti-business themes and focused on conflicts caused by Zero-Sum Thinking. Examples included “Wall Street” and super-hero popular movies such as Avengers – End Game and many Batman series franchises, and most of the DC – Marvel comic / movies that have been produced in the past 20 years. The point being that many in the millennial generation have been indoctrinated into believing that a Zero-Sum game is the natural order of things.
The way to challenge zero-sum thinking is to first think in the long-term, where it is possible to change assumptions and modify variables. Additionally, one can educate people, showing that the proverbial pie can grow, allowing for win-win scenarios. There are three basic ways the pie can grow: 
- find new resources – which is what we have seen in the oil and natural gas industry. For example, the natural gas market has been suppressed because of massive new reservoirs of natural gas were found about 10 years ago, and saturated the market, creating a supply imbalance. Environmental regulations precluded have precluded demand increases from balancing out the equation.
- technology and efficiency – new products can make the transformation of raw materials into finished products (a form of wealth creation) more efficient, and in the process, it will grow the pie.
- regulatory flexibility – in many cases, federal and state regulations will limit growth to the point that costs exceed benefits. As some of these restrictive regulations are relaxed, the pie will grow.
 Idier, Julien. Long Term vs. Short Term Comovements in Stock Markets: The use of Markov-Switching Multifractal Models (NER – R # 218). DIRECTION GÉNÉRALE DES ÉTUDES ET DES RELATIONS INTERNATIONALES DIRECTION DE LA RECHERCHE. July 2008. Downloaded Sep 17, 2013 http://www.banque-france.fr/uploads/tx_bdfdocumentstravail/ner218.pdf
 Keynes, John Maynard. A Tract on Monetary Reform (1923) Ch. 3, p 80
 Pilditch, Toby D.; Fenton, Norman; Lagnado, David (31 December 2018). “The Zero-Sum Fallacy in Evidence Evaluation”. Psychological Science. 30 (2): 250–260. doi:10.1177/0956797618818484. PMID 30597122.
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 David Takacs, Beyond Zero-sum Environmentalism, 47 Envtl. L. Rep. News & Analysis 10328 (2017). Available at: https://repository.uchastings.edu/faculty_scholarship/1563