The 18. International Vernon Smith Prize Contest

Call for Papers!

Are the Poor getting Poorer because the Rich are getting Richer?

It’s hard to think that Mark Zuckerberg is actually impoverishing anyone by getting rich with Facebook.

Angus Deaton (Nobel Prize 2015)

Those who seek to easily stir up passions with inflammatory phrases and secure the applause of their trusting audience are often citing alarming reports that claim that some 50 super-rich people own as much as about half the world’s population, combined. Oxfam’s annually published Takers not Makers Report, is a case in point. This narrative suggests an apodictic conclusion that the rich are rich at the expense of the poor or conversely the poor are poor because the rich are getting richer.
By and large these envy based accounts use a misleading methodology and also rest on the illusory truth effect. In other words, the repeated exposure to false information yields the feeling of familiarity of the readership and eventually is mistaken for truth. It is most likely for these reasons that these reports command today’s economic and socio-political discussions. Understanding these misconceptions is essential when thinking through many moral, economic, and policy questions.

A simple logical error renders these widespread narratives wrong. As neither the economy nor a real life situation is ever static or a zero-sum game, the advance of one
person can never be based on or being equal to the loss of another. This idea can only be correct if one assumes that the entire economic ‘pie’ to be distributed remains the same size or even shrinks. In other words, a zero-sum game is a win-lose scenario and refers to situations in which only one person can win, like tennis. Thus, according to the doctrine of ‘social justice’ no equal distribution of wealth can exist because transactions between people constantly change their situations and well-meaning socio-economic interventions enforced by a government will eventually destroy all creativity to move out of poverty.

If we were to assume a static society in which wealth is predetermined, we will indeed note that the rich becoming richer due to the fact that other people are becoming
poorer. I.e. the more the rich get the fewer is left over for the poor and people can only better themselves at the expense of others. However, the real world is dynamic and the size of the ‘pie’ is never fixed. For well over 200 years, zero-sum thinking was not only the source of socialist theories. This flawed philosophy still concludes that these 50+
super-rich people are so wealthy because they discriminate and exploit about half the world’s population. However, poverty is not fought by pitting rich and poor against each other. What is urgently needed are opportunities for the world’s poor to participating in democratic institutions, clear property rights protected by the Rule of Law and having unconstraint access to free markets.

1st Prize EUR 4.000

2nd Price EUR 3.000

3rd Prize EUR 2.000

All entries must meet the following five requirements:

 1)  Entries may be submitted by individuals up to 30 years old (in 2025) and must be received on or before November 30, 2025.

2)  Entries may not exceed ten pages, including a full bibliography and a half-page abstract; they should be 1.5-spaced, with left and right margins of no less than one inch.

3) ChatGPT or other AI applications may generate no entry. Along with their entry, participants must include a signed pledge stating that they wrote the contending essay without any assistance. Any use of an AI tool to fully or partially create the essay will be considered a breach of the academic plagiarism policy.

4)  Entries must be submitted in English in electronic form (PDF) to krl@ecaef.org and/or admin@ecaef.org and must include a current CV, including date of birth, and their signed pledge.

5) Prizes are not transferable. An international jury will evaluate essays based on originality, understanding of the subject, and the logical consistency of the arguments. Winners will be invited to present and defend their papers at a special event in Vaduz (Principality of Liechtenstein) on February 9, 2026. Their attendance is mandatory.

The International Vernon Smith Prize has been established in 2008 by ECAEF for the advancement of Austrian Economics. It is named after Professor Vernon Lomax Smith (born on January 1, 1927). He is professor of economics at Chapman University’s Argyros School of Business and Economics and School of Law in Orange, California, a research scholar at George Mason University Interdisciplinary Center for Economic Science, and a Fellow of the Mercatus Center, all in Arlington, Virginia. Smith shared the 2002 Nobel Memorial Prize in Economic Sciences with Daniel Kahneman. He is also the founder and president of the International Foundation for Research in Experimental Economics, a Member of the Board of Advisors for The Independent Institute, and a Senior Fellow at the Cato Institute in Washington D.C.