The economy didn't have to be a zero sum game, and for most of U.S. history it wasn't, but once organic growth stopped and reversed around the early 1970s, then efforts shifted towards splitting the pie versus growing the pie. Financialization aided by Monetary Policy was the other key factor. After all, if you can't grow a real economy, then you might as well leverage up 3.5x using cheap money. On the political side, rent seeking - which is an issue for every government since the history of mankind - went into overdrive. Each party taking turns raiding the cookie jar then mortgaging it to the hilt. The Constitution and its weak protections were no match for legions of lawyers hell bent on making money. You don't ask a barber if you need a haircut, and you don't ask a lawyer if you need another law.
On the global stage, it's the same story. According to modern economic theory which is based on Ricardian Comparative Advantage, trade is theoretically not a zero sum game. But once again, theory met reality and got its ass kicked. All of the Asian developing nations used export mercantilism to bootstrap their way to the big table. Export mercantilism is just the modern incarnation of good old fashioned "beggar thy neighbour" policy. You can argue that it was an eventuality that living standards would equalize between nations, but the glide path is the real problem i.e. the long-delayed 'adjustment' in Western living standards will be instantaneous rather than gradual. The irony is that these developing nations are adopting an economic model that is neither scaleable nor sustainable, as commodity prices at multi-decade highs continually remind us. Given that emerging market consumers' incomes are growing and Western incomes are stagnant or declining, every dollar of higher food and energy costs is another nail in the coffin for the U.S. middle class who in turn support the jobs in the emerging markets. And yet, this all assumes that the current Ponzi model is stable and can grow inexorably, whereas Minsky Theory, commonsense, and recent events beg to differ.
As I started out by saying, the markets are deja vu of last year and investors are ignoring the vertical decline that is already occurring in plain view. Why? Partly, because the general public (aka. the "dumb money" per Wall Street), has left the building in disgust and therefore that leaves big investors as the de facto bag holder. Not being used to that position, however, you will understand as to why they are perplexed that the general public have yet to show up to take this steaming turd off of their hands, as they have done at the end of every rally for the past 60+ years.