'It is so disagreeable to think ill of ourselves, that we often purposely turn away our view from those circumstances which might render that judgment unfavorable.' -Adam Smith, Theory Moral Sentiments

Workers Run the World

by Ethan Glover, Mon, Dec 08, 2014 - (Edited) Wed, Jan 10, 2018

In an article called "Can workers run the world?," Paul D'Amato gives a very naive view of capitalism and socialism, but then again, this is the norm for socialist proponents. The crux of the articles argument is based upon the idea that competition is directly opposed to cooperation and altruism. As if these things can't, and don't currently coexist. Competition is natural, and so is cooperation and altruism. Competition would either not exist or not be useful in the absence of cooperation and altruism. There is nothing about capitalism that says otherwise. Paul D'Amato himself notes that people working together on a job is cooperation, but he notes that this happens despite competition. In reality, just as competition could not exist without cooperation, cooperation could not exist without competition. Just as socialism cannot exist in a persons mind without a large level of naivete about how the world works.

If You Don't Donate, You Must Be Rich

A large portion of this article is dedicated to some misleading statistics about charity. According to its source, the poor give more money than the rich to charity. Except, this is only true in the sense of income percentages. The rich still give more to charity, this should be common sense by now. But what this article chooses to concentrate on is that the poor give 2% more of their income than the rich. This isn't exactly damning. Consider for a moment that the poor contribute much more of a percentage of their income for every dollar they give. Most people don't pay attention to the portions of their money they're giving away (well, unless you're good with money management, but we'll get to that later), it's more about what they subjectively see as 'enough.' When a poor person gives $20, that may seem like a lot. But a lot to a wealthy person might be $2,000. The poor person donates according to his/her limits while the wealthy person gives according to what seems like the right amount.

None of this is really an argument, your opinion of who's not giving enough comes down to perspective and what statistics you choose to pay attention to. Something highly subject to bias. I think everyone should give more to causes they care about and budget their money in a way that they'll be able to live another year in order to donate even more.

But to get back on topic, what does charity have to do with capitalism? This is my real argument, a base problem I find with socialism is that its proponents push for everyone being equally poor. If you're richer than someone, you should be made to give your money to a poorer person, and apparently everyone should be made to give an equal percentage of their income. While there are some poor people in need of help, for which I recommend Kiva, Give Directly and Hand Up, doing this means those who are worse with money management (i.e. alcoholics and drug addicts) are essentially rewarded for their lack of contributions to society. Those who are good with their money and are more prone to investing are not paid for their skills, and there is indeed less incentive to put in the work to make that money.

D'Amato further claims that the only reason rich people donate is to flaunt their success. This is another problem I see with socialists. They assume that anyone with more money than them is evil and couldn't possibly do any good. Rich people can't possibly have any interest in supporting a cause they care about, after all, they're rich. This claim is little more than jealousy of skill and success.

Socialist Utopia

Eventually, the article gets into the inevitable imagination of a world with no scarcity. Everyone can share everything without worry of running out. Again, this is naïve and ignores one of the fundamental laws of economics, economic calculation. The idea that everything can be distributed for an imaginary "greater good" (which can't possibly exist) means allocation without market signals. It first means that the quality of products is meaningless and everything is handed out without consideration as to who has done more for society through skill and labor. We've seen the result of this before in Soviet Russia, not only did the economy become stagnant, but products became uniform, and quality dipped into what essentially became trash.[1. Economy of the Soviet Union. (2014, March 12). Retrieved December 8, 2014, from Economy of the Soviet Union] Without even getting into the mass poverty and famine which is certainly worse, we can look at the minimum of the results in production alone. Everything in Soviet Russia became uniform, quality dropped and we got a real look at a 1984 sort of world.

With a guarantee that everyone will survive without working at least a minimum amount to help keep society going, the amount of labor as a whole drops. This doesn't mean everyone stops working, but rather that the opportunity and incentive to not work becomes much greater. More people drop out of the workforce over time. Products that require more time to produce, such as cars, become more scarce. For Soviet Russia, this meant that only the well connected could get their hands on a car. For the average person, they'd have to go on a waiting list for years, even a decade. In the absence of price signals, scarcity becomes represented in time rather than price.

With capitalism there are not only high levels of incentive, but proper signals. New products such a new cars or phones are given high prices because companies know that early adopters value them highly and that the rich value them at all and are thus willing to spend more money on them. This means that older models become less valuable and thus much cheaper. It is the rich's willingness to spend large amounts of money that supports the low prices of older models. Apple isn't exactly making a ton of profit from new iPhone5's right now, but many people are benefitting from the discounted prices.

The Communist Manifesto is a Joke

One of this articles cited sources is The Communist Manifesto by Karl Marx and Friedrich Engels. The reason for the citation? It's argument against laziness, which is a joke at best.

"It has been objected," they write, "that upon the abolition of private property all work will cease, and universal laziness will overtake us." Their answer is as simple as it is devastating: "According to this, bourgeois society ought long ago to have gone to the dogs through sheer idleness' for those of its members who work, acquire nothing, and those who acquire anything do not work."[5. D'Amato]

Marx is always good for a laugh, for your viewing pleasure, check out the opening skit of the EconPop video below:

When I work, I certainly acquire. Wealth, property, experience, knowledge and a whole host of other things. I don't know a single person who has a lot who doesn't work hard, to include criminal government officials. I would like to see a socialist find, with real evidence, a lazy rich person. Seriously socialists, get in contact with a rich person you think is lazy, most people answer their email, seriously, give it a try. There aren't a lot of people who have public email addresses who are too famous to respond, even if it takes some time, most will get back to you. Ask about their schedule, find out what they attribute their success to, ask them how they would respond to claims of laziness. If you're too lazy to do this yourself, try Tim Ferriss' podcast. Come back with the answer, and we'll talk about that. But these claims in the Manifesto are unfounded and are full admittance that Marx and Engels had no answer to the criticism of laziness.

High School Theater Students Should Get Paid

As an example of working people who don't get paid, D'Amato talks about high school and community theater. Two things that aren't exactly highly valued. High school and community plays suck, the only people who watch those things are families, most of whom are dragged along by another member. They are put together and funded by the state which isn't about to hand out paychecks, even if they did make a profit, and I guarantee most them are not. If you want to talk about college athletes, that's fair, there is demand, and therefore money to be had there.

But as usual, socialists concentrate on where there is no demand, such as in the other example given, music artists. A lot of "struggling artists" are often people who don't bother to learn networking and think that just putting some roughly thrown together junk on YouTube is enough to get them "found." Either most of these artists aren't good at what they do or they're trying to get into an oversaturated market.

Great artists who show extraordinary talent are indeed highly valued and paid well and it is nearly statistically impossible to reach that level. However, the average singer who is good enough to make a living isn't often heard about. These are the travelers doing gigs in bars and hotels, they put a lot of work into quality and networking, and make a good living, even with their just above average talent rather than some of the seemingly supernatural abilities you see in the high paying music world.

Many socialists have this dream that they can spend all their time painting worthless pictures and singing like crows and call that work or contributing. If people don't want you to do something, they can't force you to stop so long as it isn't harming anyone else, but that doesn't mean they have to support your worthless ass.

Find something that someone needs you to do. You can do activism and charity for a living, you can work with co-ops, but make sure someone values your work. Learn a skill and do it. If you're not good at something, keep exploring. This is capitalism, price signals show you where help is needed most, and you can choose from the available employment options based on your personal philosophy and interests. There's nothing wrong or evil about it.