Does socialism work? A classroom experiment

Entirely simplistic, but I'll dismantle it anyway.

This only works as an analogy for entrepreneurship, and even then there is scope for all involved to work together - to bring the bottom up, therefore bringing the average up - so all achieve the highest grade.

"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" - did it? This is what your argument hinges on and it's quite a weak premise.

Following your "when the reward is great, the effort to succeed is great" analogy, tell me how paying people £1 an hour is "rewarding" in any way?

@Matt Zarb-Cousin - interesting that you decided to tackle the simplistic analogy, but not the core 5 moral lessons that came with it.

emmmm....obviously it doesn't look how many socialist countries there are today and what champions of prosperity they are.

Matt you have not dismantled the analogy, you have disagreed with it. And what has £1 ph got to do with anything?

@EdBallsatemyhamster - The original poster called Obama a socialist. With this in mind, I presume he'd call any social democratic government intervention "socialist" - such as, for example, the minimum wage.

@LibertadYOrden - the five core lessions hinge on the point that's made in the analogy.

Thanks to the Commentator for publishing my comment. Free speech and all that, eh.

Ridiculous.

I'll leave it for others to address why calling Obama a socialist - or any of his policies socialist is so utterly stupid.

But there is another important point to make - the way that the writer gives the impression that capitalism and the markets are "fair", like getting grades at school. Anyone will tell you that effort and aspiration in capitalism does not directly correspond with wealth and success. Of course it helps, but to make out that in life the people who work hardest are most rewarded like it's some mathematical certainty or 'test result' has always been the biggest error made by Conservatives.

Just one final point - the author seems to think socialism is the same as communism.

Bizarre.

Either he's deliberately misleading (most likely) or ought to read up and check his facts before he writes a piece on it!

@Matt Zarb-Cousin - I don't see that they hinge on the analogy. I see the analogy as an over simplified, yet nevertheless instructive means of getting the point across. The really good stuff is clearly in the lessons. Neither you, nor Chris below you, have decided to try and de-construct those lessons, opting instead for the analogy which I suspect the author himself knows isn't water-tight.

@Chris - One might say that you are confusing capitalism with corporatism. Regardless, see my comment above - why not try and argue against the 5 moral lessons, as opposed to the analogy which is clearly employed for entertainment value?

@Matt - "even then there is scope for all involved to work together - to bring the bottom up" - give the average person the choice of working very hard or going on the free ride for the exact same reward, and you will find that most people would prefer the free ride. Given two jobs - one where you work 14 hour days, have a ton of stress and never see your family and another very relaxed one with no stress with the same pay, most people will go for the one where they have to work less. No person I know would work harder just for sake of hard work without any incentive attached to it.

It fails at the first hurdle by claiming Obama is a socialist.

@Chris: My father had an old expression: "The race is not always to the swift, nor the battle always to the strong, nor riches always to the wise-- but that's the way the smart money bets!" Which is to say, of course we're not always rewarded commensurately with our effort; but one has to make that effort, don't you see? The whole point of the article was that perverse incentives exist which tend to make us want not even to expend any effort. Of course, we all would like to obtain the greatest satisfaction of our desires for the least amount of effort-- the colloquial expression "More bang for the buck" springs to mind readily-- but when no one is willing to expend any effort, whether because it is unnecessary (everyone will be provided for) or undesirable (why should I bust my butt if it will only go to provide for someone who isn't willing to do the same), you have Hobbes's war of all against all metaphorically, and pretty soon literally as well.

@LibertadYOrden

The analogy should be attacked if it gives the wrong impression. That's the whole point of an analogy and this one is massively flawed.

I completely agree with all 5 points made at the end. The problem is that the writer never explains why he thinks each one is bad or relevant - presumably he feels he has already made his point through the atrocious analogy.

For example - number 3 - I totally agree. But why should any sort of redistribution be automatically considered bad? Taxes themselves exist for the purpose of redistribution and nobody seriously argues that we should scrap them altogether. Even a tea-party Conservative accepts that taxes have to exist in some form or another.

The 5 points at the end are just random facts. He never elaborates.

@therealguyfaux

I agree with that, and that's why I consider capitalism to be the worst system apart from all the others(!) But it is for the reason you seem to accept- that wealth cannot be directly equated to effort- that I think taxing the wealthy higher than others is not necessarily a bad thing, especially in todays economic climate.

@Mulder - "one where you work 14 hour days, have a ton of stress and never see your family" - sounds like the American Dream to me! But seriously, as I said before, this analogy applies to entrepreneurship (as it refers to capping potential rewards) - but it doesn't take into consideration the potential for a country (or those within a business) to respond to capped rewards by increasing the wealth of a nation (or a company) by bringing low achievers up to standard (through society funding the education system - or training, or helping those that need it, for example).

@LibertadYOrden - fine.

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. - yes, you can. In Lloyds TSB bank, some staff earn £7 an hour. Some earn £7m a year. All of this money comes out of their profits. Giving the lowest paid a pay rise at the expense of a couple of million quid off of boardroom salaries wouldn't remove the economic incentive to work hard and become the CEO of the company.

2. What one person receives without working for, another person must work for without receiving. - yes, but with absent shareholders, who decides how much in the boardroom is worth? That's right, the people in the boardroom! There is no value calculation that's performed. It's all subjective. So redistribution (by the state, or within companies) isn't undermining someone's hard work, it's properly rewarding those that work hard (often those at the bottom).

3. The government cannot give to anybody anything that the government does not first take from somebody else. - see previous answer.

4. You cannot multiply wealth by dividing it. - you can if you increase the wealth of the nation. See answer to Mulder. Sweden's one of the most equal societies in the world, and one of the richest countries.

Instead of bickering there was always limitless vodka.

A few points of my own with reference to numerous points made by Matt Z-C:

1. Low achievers in education can't be brought up by anyone else just by throwing resource at it. Achievement (in any field) is dependent on effort and desire. If the desire is there, and the effort is made - then the individual will do well. This has been the case for all time.

2. Rather than focusing on the wages on bankers (which is a nice, easy, populist target), I suggest that you replace bankers with footballers, celebrities and champagne socialists. How do you now feel about taking between £250K and £2m p.a off Jamie Oliver? Stephen Fry? David Beckham? Wayne Rooney? Polly Toynbee? Brian Eno (who I saw on a video at Occupy Wall St yesterday singing about being the 99%. Estimated nett worth of at least $10m). All of these people earn very, very large sums of money because they are at the top of their game, and are believed by their employers and partners to be 'good value'.

The unfortunate fact that somebody is deemed only to be worth paying £7 an hour to, is not the fault of the person at the other end of the pay scale. It's the fault of the individual who has failed to acquire valued skills or knowledge. You might want to see them as victims. I don't. I think that they have just been ineffective at developing themselves. The opportunities are there in this country. Libraries exist. We are surrounded by knowledge and opportunity to improve our lot in life. There are people arriving here today who can hardly speak the language that will be productive and successful within a couple of years. Why? By thought, and by effort...

Personally, I think if the £7 per hour worker put a bit more time and attention into 'thinking' about how they could improve their situation (and perhaps turned off the TV for a little while - sorry to sound patronising but its true), then I am confident that they would see an improvement. What we don't need is you (no offence intended) or some other appointed technocrat to go round deciding 'what you're worth'. I would rather the free market do that, and not some crony gang set up as an Office of Fair Wages.

3. Your point about 'properly rewarding those that work hard - often those at the bottom'.... Poor diddums...

The guy who works selling burgers at Man Utd gets £40 for a days work. Rooney gets £400K for allowing his photo to be used to sell some football boots. Madness for sure, but it's how it is...

Here's my advice, instead of trying to make out that its all unfair to all and sundry, and that those bankers (of which I am not one I might add) are getting rich on everyone else's expense - why dont you go around telling people to pitch in, pull themselves up, dust themselves down, put some thought into where they are going with their lives - and then give them some real encouragement to do their best at getting there? I'll tell you why you don't do it... Because there's no votes in telling people to look to themselves and work at it - whereas you can weigh the votes by the bucket-load when you tell them that they are innocent victims, and that it's all unfair.

In summary, your recommended approach just keeps people down. So if you go to some of the Labour heartlands (NE, NW, Scotland and Wales etc) in the UK and tell them that it's not their fault - then you might just make it as a Labour MP...

@ Chris: 'Taxes themselves exist for the purpose of redistribution'. Really? Well I suppose that is true originally - redistribution from the workers to their rulers; a sort of rent. But from about the middle of the eighteenth century, perhaps, taxes have been levied to pay for things only the state can provide. Income tax was invented as a temporary way of raising cash to pay for the British fight against Napeoleon for example. It is really only relatively recently, with the introduction of state welfare, that taxes have in effect been a form of redistribution. They certainly don't exist for redistributive purposes. Except in the socialist ideal - which, incidentally, Marx himself acknowledged was a grim transitional stage to communism.

@Chris: Do you propose a Henry George type solution of taxing "rent-seeking" (i.e. purely financial) activities at a higher rate than "productive" activities(i.e., that provide an actual good or services to "real people")? That has some validity to it.

Obama has a long way to go before he'd be considered a socialist by anyone but the US right wing.

Also, I'd consider the analogy to be more in line with communism than socialism, but when viewed from the far right they're probably indistinguishable.

Lest you think I've pitched my tent over there, definitely not. Too many benefits will indeed drag everyone down into the mire, but it is important for any civilised society to have a safety net. It doesn't need to be a comfortable one (and indeed it shouldn't), but it should be there.

Another poor analogy for you - imagine that unemployment was solved by executing those without a job - how long before you'd have almost no population left, as the market size reduced, along with sales and profit? Maintaining that market is an investment for the future, because it provides future sales. You don't want to tie up too much money in the investment, but there needs to be enough, which is the balancing act that Obama is currently attempting. If you have a healthy population, they're going to be more fit for work than one that is too ill to work and too broke to afford medical care. (Of course, the cost of healthcare in the US is obscene by the standards of most of the Western world anyway, but that's another subject.)

Successful capitalism requires some money to be spent on maintaining the market, but spending too much or too little is going to degrade the overall return. This is not socialism (unless you spend too much), merely good business sense.

@Matt Zarb-Cousin: To mix a metaphor, can you produce a rising tide that lifts all boats, without it being a global warming of sorts that will melt the ice sheets and raise sea level to the flood stage? John Rawls's Theory of Justice proposed a do-no-harm rule of thumb in terms of addressing inequality-- inequality is preferable to any attempt at redressing it which will only worsen things for those who were at the bottom to begin with; can any system you propose achieve Pareto optimality of improving the lot of those least well off, at a cost to those better off which the better off will not find cumbersome and be unwilling to pay?

With the UK having a three tier party system, we have experienced capitalism and Socialism over many years as the Labour party and Conservative party have had turns in attempting to impose their will and policys' on the people.

History tell us that the capitalist Tories require private sector investment from the business fraternity, and therefore money makes money and creates wealth for entrepreneurs and investors. The rich become richer, the poor, poorer. Hence the poor rebel!

The Socialists Labour party, believe in throwing cash at the the public sector to create a distrubution of wealth, and attempt to achieve full employment. Unfortunately, they borrow to 'break the bank', in order to achieve their goal, thus creating instability in the financial sectors, without balancing the books through taxation and fiscal policy.

Neither Socialism or Capitalism seem to work in the UK, as we have had cycles of each, and as capitalism may crumble and socialism takes its' place, we have a merrygoround of economic boom and bust coupled with employment issues!

It's simple. Under socialism, those who work hard are if not punished, they are certainly not rewarded for doing so. Under capitalism, those who work hardest are afforded the opportunity to rise to the top. Those on low wages are often stuck in such a position because they have not worked hard enough.

Granted, there are currently too many people employed in jobs that they are way too qualified to be doing. But proper capitalism - freeing the markets, reforming taxation - was not the cause of this. Governments borrowing and spending more than they raised in taxes is the cause, capitalism is the solution.

Guarantee savers' money, let the banks who gambled terribly fall. Properly reform benefits, cut everything that doesn't need to be there - for instance, why not have in-house consultants work for the MoD rather than have outsiders fleece them?

Of course, this is not a full solution, but damnit, it's a start...

@Marcus Edwardius

Sorry - I don't want to sound like some ranting troll here, but with respect you have just posted some of the most ignorant opinions I've ever heard - I'm talking mainly about your second point.

You're basically trying to make out that life begins on a level playing field for everyone. This is clearly false. For example - I was lucky enough to have a good upbringing where I was well looked after and sent to a good private school where I received a good education. Other people simply don't get this. This has nothing to do with them having "Failed " in some way - as you put it - to "acquire skills and knowledge". That's absurd.

So much of where you end up in life depends on your upbringing, who you're surrounded by, the opportunities you get as a result and in so many cases - the wealth you inherit. You idea that someone from a down-and-out household with little money and education can just walk into a library and magically educate themselves to become super employable or successful is quite frankly, laughable. (To equate a full education to learning a new language is also ludicrous.)

Yes, there are success stories of people who 'make it' from having nothing, but these are few and far between. Statistics show just how depressing the overall picture is.

Honestly, I could go on to give a million more examples of why this conservative fallacy that 'anyone can achieve anything' is completely delusional. If only it were true.

Why doesn't some wonderfully liberal ivy league university really try this?