An economics professor at a local college made the statement that he had never failed a single student before but had once failed an entire class.
That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, “OK, we will have an experiment in this class on socialism. All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.
After the first test, the grades were averaged and everyone got a B.
The students who studied hard were upset and the students who studied little were happy.
As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
The second test average was a D! No one was happy.
When the 3rd test rolled around, the average was an F.
The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.
All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great but when government takes all the reward away, no one will try or want to succeed.
It could not be any simpler than that.
Well thats a ridiculous over simplification of economics which leads me to firstly believe that that event never of course took place…
I could quite easily just reverse it to the way things are now firstly and say. Ok kids your all going to get different test depending on who your parents are. Your parents are rich you get an easy test, your parents are poor you get a hard test. It seems ludicrous to try and discredit a system as being unfair and then defending an insanely unfair system…
Secondly, of course that example doesn’t translate to the real world in the slightest because in the real world the vast majority only see 1-10% of the profit from what they produce anyway. So, in the current world however hard you work the majority would all be on Fs anyway, while a small percent are on As. Just look at the facts, very few people under the capitalist systems ever move out of their social class, we look at libertarian experiments like Chile in the 70s and we in fact see the poor getting even poorer and the rich getting even richer, so people aren’t actually bettering themselves under capitalism, there getting worse and worse…
Compare socialised systems to non socialised systems. The NHS here in the UK provides better health care considerably cheaper, and we ALL get it, whereas a few people in America get very good health care a sizeable amount get ok health care and then another large chunk non, yet it costs you guys huge amounts more money…
“Well thats a ridiculous over simplification of economics …”
And that is what makes it a great example!
“Secondly, of course that example doesn’t translate to the real world in the slightest because in the real world the vast majority only see 1-10% of the profit from what they produce anyway.”
I’m not sure about Great Britain, but in The United States, income tax was “permanently” implemented in 1913, and that was the beginning of the end for Capitalism in The United States. Therefore, how can you say, we only get to keep a marginal percentage of our earnings? That has nothing to do with Capitalism; in fact, income tax is the enemy to any free-market society.
Perhaps you should be directing your energies toward “failed government policies” and not great economic systems; especially ones that promote freedom and incentive.
The problem in The United States, is not the need for more government control and interference; we need less government and less interference into our economy, and private lives.
“I’m not sure about Great Britain, but in The United States, income tax was “permanently” implemented in 1913, and that was the beginning of the end for Capitalism in The United States. Therefore, how can you say, we only get to keep a marginal percentage of our earnings? That has nothing to do with Capitalism; in fact, income tax is the enemy to any free-market society.”
No, I don’t think you understood my point. If you don’t own your means of production then your only choice is to sell yourself for whatever someone is willing to give you for it. On average, from what people produce/do, they see about 1-10% of that profit. Most people earn enough to get by but not enough to invest back into the system so usually stay in there own social class, i.e. the incentive argument of capitalism is nonsense.
“The problem in The United States, is not the need for more government control and interference; we need less government and less interference into our economy, and private lives.”
Who said I want to keep the state? The state is an organ of oppression, ultimately you’d want to get rid of it. But what you appear to be suggesting is you hand the power of the state fully to private individuals, I don’t really see how that would make us more free? It would make a few individuals with money very free and the majority would have very little freedom.
Are you saying, if you are not working for yourself, you are at the mercy of the person who is employing you?
Again, I would reiterate: Taxes and the size of government, in both Great Britain, and in The United States, are way out of control. The bigger the government, the more the private sector and GDP is squeezed. All of this, profoundly effects everyone in the nation; even though it appears to happen behind the scenes.
In The United States, our founders set forth a limited government, and made it unconstitutional to impose “any” direct taxes. Of course, today, it appears that our government has “unlawfully” thrown much of the Constitution, right out the window.
“Who said I want to keep the state? The state is an organ of oppression, ultimately you’d want to get rid of it. But what you appear to be suggesting is you hand the power of the state fully to private individuals, I don’t really see how that would make us more free”?
This I am glad to hear you say! These far-left liberals, in our country, seem to think bigger government is the solution to our problems, when inadvertently, they are going to sell us all into oppression. I totally agree with you, that bigger government is like to lead to tyranny and oppression.
I would also agree that kicking the government completely out of our lives and relying on big business would not be very prudent either. The problem we are having here, is that many big businesses and government has failed us miserably. It leaves us in a precarious situation; however, a great majority of people have woken up enough to realize, government makes the biggest power grabs in the times of national crisis, and we must resist any further, unprecedented, power grabs by our “federal” government.
Look, criminals are criminals! If people in the private sector, game the system, they need to go to jail; as should many politicians who have contributed to these problems. In fact, as I was saying, many of these economic problems can be traced to failed government policies.
So, indeed, there is not an easy answer, but I know one thing is for sure: In The United States, everything the government touches, financially, turns to hell. So, if I were to base my decision strictly on economics, then I am going for the private sector all the way. I am utterly tired of hearing these Socialists, who have infiltrated our government, incessantly bashing a system of economics that has worked for many years. The free-market system has been part of The American way, since the inception of our nation.
There are still many good rich people, who provide many jobs, and who are also very generous philanthropists. We have to be careful not to demonize all rich people, just because some incompetents and criminals have gamed the system.
Hmm, I won’t respond point by point, but give a general response I think…
Firstly, the government you have at the moment isn’t far left, or socialists. I consider myself a socialist and we don’t see eye to eye on that much. Take health care what is being proposed is an insurance policy so the government pays the private sector. A more effective system would be to have a totally publicly owned system, as I have said this has proven far more effective, just look at your American military for this!
I agree there is far to much bureaucracy in the public sector, but why do you think this doesn’t exist in the private sector? There’s large amounts of it, the irony of course is that, especially here in the UK, they have been running the public sector like the private sector, with management structures, targets, pay incentives, public private partnership, etc etc and it’s added to the bureaucracy, creates a environment of bullying which, as we see at the moment with the postal workers, is leading to industrial action with nation wide strikes.
Are you saying, if you are not working for yourself, you are at the mercy of the person who is employing you?”
A wage slave is what I was describing yes. If you don’t own your means of production then you are some what limited in what you can demand for your time, unless you organize that is, unions, etc.
Hey David,
So, basically, you are saying, if you do not own your own business, then let’s just hand it over to the government? I’m sorry, I can not buy that premise.
Firstly, the (public sector) government is not a profitable entity, they only survive through the tax-payers, therefore, every time the government hires even one person, or gives any raise etc., it is the tax payer that is financing it. The government is wealth absorbers, not wealth creators.
At this point, I would not call our president a socialist, but I would say, he leans hard left and toward Socialism. The United States, sadly, has had quai-Socialism since the early 1900s and the inception of Social Security, under FDR. Which, over the years, and despite the government’s initial projections, is becoming social insecurity for our economy.
Also, we have Medicare, which has an unfunded liability of app. 37 trillion dollars; and it has been recently reported that our military hospitals are not so good either. We have a Constitution, in our nation, that never gave our federal government any mandate for any of this. I have also heard that The NHS is also failing, as it is a relic, left over from just after WW2, where, in England, it can argued that rationing of resources was necessary.
I am all for free-thinking, and I don’t knock someone who feels more safe, or comfortable handing their money and freedoms over to the government, however, there is not one model in The United States to where the government has run anything responsiblity. And subsequently, has cost the private sector and hard working citizens far more money then had they never enacted any of these foolish programs.
In case you are thinking, your government runs a military… The answer is yes, and they were granted that duty in our Constitution. Also, our Department of Defense, not Congress (thank God) is in control of our military budget.
Have you also noticed, the leaders of Socialists countries are the biggest hypocrites? While they are bashing the free markets and Capitalism, most, if not all of them, are very rich; while their populations lose all incentive to become rich themselves.
Sorry, I hate Socialism and all it stands for… From my point of view, it is the absolute nemesis to freedom and liberty. People can control the free markets through boycotts etc., however, people can not easily control a force that has a national military at it’s command.
Which socialist countries, can you name one? To save time there hasn’t been one. Russia, China, North Korea, etc are/were Stalinist states, not Marxist states. because we saw the raise of fascism instead of communism in Germany, Russia was left isolated and ultimately Russia descended into a nationalist nightmare, when socialism has to be international to work.
I’m sure there are reports that say the NHS is failing, like there are reports that say a range of contradictory things, it’s not perfect that’s for damn sure, and would be better under a real socialist system, but it’s certainly better than not having it, and better then the American system. I think you’ll find most people here in the UK would prefer it, even when the media attack it all the time. How can it be a relic left over after WW2, it was created after that, as people could not stand to go back to the way life was like before the war. You have been watching too much Fox News…
Well that’s the point in a public service, it doesn’t have to make a profit, it can run at a loss because you are providing a service. A private business has to make a profit to work, a public service doesn’t, which is why it’s cheaper and if run correct much more effective and less bureaucratic.
But the inefficiencies and bureaucracy that people always attack the public sector for (and don’t get me wrong does exist) also exists in the private sector. It is the system as a whole that is fault, not one aspect of it, i.e. it’s an organ of oppression rather then being the source of it.
So what what the American constitution says, you shouldn’t blindly follow anything, whoever wrote it, that’s just silly.
Re handing over your business, I’m not suggesting that as a transitional demand, no. You’d put major industry, banks, transport into public ownership and make sure minimum wage was an actual livable wage.
Hi David,
So, what you are saying is, thus far, no Socialist system has worked efficiently? I will give that to you, there may not be an example as to where Socialism has operated in a vacuum, however, I can make the counter-argument with Capitalism: due to government intervention, central banks, income tax etc., the free-market has also been screwed up. That being said, prior to these progressives etc. intervening into our economy, with unprecedented amounts of power, in the 1920s, The US lasted many years, and thrived under the free-markets. Not to mention the great entrepreneurs, and inventions this country has also generated. All of which were due to the ability to take risks, except failure, while being able to get up and take risk again. That is The American way, and that is the system that our country was founded on, and we desperately need to get back to.
In a past comment, you mentioned the downside to government control, and we totally agreed on that… It is a known fact, throughout history, power does corrupt. So, of course, when a government is controlling the means of distribution, you will end up with mass corruption, and oppression. Again, since our government took control of taxes through income, in 1913, they too have assumed WAY too much power over the states, and seriously breached our Constitution: which made it clear, “no direct taxes shall be laid”.
Also, in our Constitution, our founders went to great lengths to separate power, in the government, so that one branch can not (usurp) overtake another branch, or the people, or the sovereignty of the states, which is being lost daily. Again, if the people could repeal the sixteenth amendment and income tax, the federal government would get put back into their rightful place in this country.
“You have been watching too much Fox News…”
And what news stations are you watching? A “government-controlled” station perhaps? Actually I have heard about The NHS through Daniel Hannan, but I will assume you don’t really care for him, as he too is a conservative that believes in free-markets. I have also heard from doctors in England and in Canada. Certainly you can find people who will espouse your beliefs, if you search enough; however, numbers and facts do not lie.
“Well that’s the point in a public service, it doesn’t have to make a profit, it can run at a loss because you are providing a service…”
David, in all due respect, this seems to be the key element that you, and others who espouse these systems, don’t seem to understand… Yes, public services are not expected to profit, however, they do have to be funded. And how are they funded? They are funded because the private (profitable companies and people) sector is paying enormous tax burdens to fund these monstrosities. And this is a key element: If the public sector had the potential to lose it all, the way someone like me and you could lose it all if we start a small business, then there would be “incentive” to operate efficiently, or they too would fail. However, how can an entire public sector fail? After all, the people are too dependent on government; therefore, we are forced to fund the incessant failings and bureaucracies. Also, keep in mind, we are in this current recession because of policies the government facilitated, and the dishonestly of a few in some of these so-called “too big to fail” companies. You know, at one time, in The United States, regular banks were not allowed to engage in securities sales because of the intrinsic risk, and that was probably the much better way to handle it. Look, if these idiots on Wall Street want to bet their homes on speculation etc, then be my guest; but when our homes are in the crossfire of their risky business, we then have a problem. I personally don’t like vapor paper, and speculation. I am definitely into more tangible assets, as opposed to these incessant boom and bust, bubble economies that have been allowed for the past few decades, in The United States.
My skepticism, and history tells us, the more you invest wealth etc into a centralized power, the more corruption and oppression is likely to follow. I could not see The American people, as a whole, buying into some one-world type governing body.
That being said, we seem to have one large point of agreement…
Big government bureaucracy, and inefficiencies, coupled with corruption and oppression, has screwed up Capitalism, and according to your theory, socialism has never really had a chance because of these these government factors; therefore,…
I would be interested to hear how you would do it if you were approached and asked for your opinion?…
When I say the state is an organ of oppression I mean it as not the oppression itself, but part of it (cog in a system). You have the state that are effectively middle men to the rich. Then you have standing armies, police that work in keeping control rather then protecting people, that act on the interest of a few very rich people. The media that either work for or against the state depending on the interests of the rich again, then the Monarchy even in a constitutional monarchy like ours still works to maintain an order of sorts. It’s the entire system I disagree with, not just the state.
Ultimately you wouldn’t want a state, i.e. an authority from above. You’d want work places being planed, and run by workers themselves, this has proven an effective system, when people feel they are important, get job satisfaction then they work much better then when they feel like a cog in the machine. I feel like a cog in a machine myself just being told what to do, and consequently I probably don’t work as hard as I could, I should be working right now in fact :)
But the point being that I’d want to see a real democratic system (I don’t think we have one) in which we see real accountability of anyone with any sort of power. That’s the problem I see with individual power and ownership. You can argue that with competition if someone is doing a bad job then we can simply move onto a different company to get that product or service. But, that only goes so far. Indeed, when a market is new that does kind of happen. However as a good example, the communications industry, a very mature market now, for any competition to move into that market would take huge investment that could be crushed very easily by the effective shared monopolies we see in the communications market. These people have huge power and no way, through the free market, to get rid of them.
I keep up with most of the mainstream media outlets just to see what their saying, I wouldn’t call it news though. I prefer to get my news from grassroots movements, people involved in the news I am interested in.
Daniel Hannan, I thought so. I suspect it wasn’t published the massive backlash in the UK that happened after he went on Fox News, all his claims were proven wrong, and he was condemned as a liar and a nut job by most, even in the Conservative Party, including their leader David Cameron said as much,
There has always been some sort of regulation in the US though, the wild west is often claimed as a time without regulation from the state, but this simply isn’t true, there was, lots! Also when we look at the times of the big crashes the current one and 30s they were during times when we have seen less regulation in the market. Now before you say it, I’m not saying there is no regulation, but over the last 30 years we have seen less, and this is when the crashes have occurred!
Finally a word on public services, just because they don’t have to make a profit doesn’t mean they don’t make money. For instance as a couple of examples, here in the UK, the Met Office makes a profit and is a public corporation, the Post Office made a profit until they started privatizing it (oh the irony!), you could fund the Rail Service through ticket sales, but cheaper as you only need to fund it not make money on top. However some services just can’t make a profit or even break even from full stop, or shouldn’t, but are vital services and would be no different in the private sector.
Take utilities, I don’t know what it’s like in America but electricity and heating costs have soared in recent years here. The elderly, especially who need good heating to survive, without much money can’t afford to heat their houses in the winter, so have gone without risking death or live in one room in their houses, it’s outrageous in a supposedly advanced capitalist nation that this happens. Yet the utilities are privately owned, no competition is possible because it’s a mature market so the majority suffer.