Let us suppose that Obama really wants to ram socialism down America’s throat. Is this a bad thing?
It is generally assumed that socialism is bad because…well, because it is socialism. That is something that Europeans do, like eating quiche or losing wars. However, are there good arguments as to why socialism itself is inherently bad?
To keep the discussion focused narrowly, I’ll stick with the stock argument: socialism destroys incentive. If, the argument goes, the state owns everything then people have no incentive to strive and this will result in a wide variety of problems from individual laziness to a general economic decline. Interestingly, the same folks who make this argument also tend to be the same folks who argue against the minimum wage (or at least increasing it).
The argument is usually presented in the context of a form of socialism in which there is no difference in pay or rewards. That is, from each according to his ability and to each according to exact equality. However, this form of socialism is not the only form. State ownership of the economic system does not require that individuals cannot be paid more or less or rewarded more or less. All that state ownership requires is that the state owns the economic entities.
But, one might argue, if people cannot strive to own a company or corporation, then they would have no incentive at all. In reply, the truth is that the vast majority of people have no chance of ever owning a company or corporation. Rather, the odds are that they will be working for a business that is owned by someone else (and these owners are a small percentage of the population). Amazingly enough, these people still work even though they really have no chance of owning a company or corporation. Now, imagine that the state owns the company rather than Donald Trump or Bill Gates. From the employees’ standpoint, nothing has really changed. To use an analogy, claiming that state ownership will destroy incentive is a bit like saying that getting rid of pro sports would destroy the incentive to play sports or exercise. True, there would be some impact. But it would be much smaller than one might imagine.
In response, it could be argued that under socialism there would be no privately owned small businesses and this would destroy incentives. After all, while most people have no chance of owning a corporation (aside from a bit of stock, of course) a person can start his or her own business. Without such an incentive, disaster would ensue.
The same reply can be given as above: again, most folks do not own businesses and really have no realistic chance of doing so and hence most folks are not motivated by this. Rather, most folks are motivated to work because they need the money.
Aha, one might say, under socialism there will be no such needs. People will have all their needs taken care of and hence will have no incentive to work.
In reply, if this were true, then what would be the problem? This would be a “Star Trek” future of plenty and no want. This seems awesome.
But, one might say, this would not be an awesome world. Rather, it would be awful because everything would be crappy. When everyone’s basic needs would be met, the other needs would be left unfulfilled because people would lack any incentive to fill them because they could not make lots of money doing so.
While this has some appeal, it would seem that if people are suffering because their needs are left unfulfilled, then they would have an incentive to act to fulfill them-even if they could not make lots of money doing so. Also, people are often motivated by factors other than money. Think, for example, of all the free stuff on the web that people create and share without the hope of profit. Think, also, of community service and volunteer work. While profit does motivate, there are other strong motivators that would provide considerable incentives.
A final point to consider is the negative aspects of the profit motivation. Folks driven solely by greed tend to lead us into disasters. While a healthy desire for profit can be fine, it must be tempered by other motives as well or such a drive can become monstrous and damaging