Socialist Experiment

[Politico]

I posted this in another thread which has gone awry. I feel like this "legend" is better suited to a thread of its own. I hope it will spur discussion about socialism along with an open exchange of ideas about economics in general. I would imagine that most college students and graduates will be able to instantly relate. The author of this piece is unknown, so the piece is not copyrighted and is therefore reprinted in its entirety:

An economics professor at a local college made a 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 if enacted, no one would be poor and no one would be rich. It would be a great equalizer.

The professor then said, “OK, we will have an experiment in this class on socialism.”

The professor decided that all grades would be averaged together and everyone would receive the same grade. In other words, no one would fail, but no one would receive an A either. Everybody would be equal.

After the first test, the grades were averaged and everyone received a B.

The students who studied hard were upset, but the students who studied little were happy.

As a result of the averaged grade, both the students who studied hard as well as the students who studied little decided to study even less for the second exam.

The average score this time was a D and no one was happy.

When the third exam rolled around, the average score was an F.

The scores never increased and students blamed each other for the overall poor performance of the class. No one wanted to study hard for the benefit of another student, and those who wanted to get ahead based upon their individual merit were not going to achieve their goal under this system.

To their great surprise, all students failed the course. The professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when the government takes all of the reward away, no one will try hard or want to succeed.

Source: http://www.snopes.com/college/exam/socialism.asp

[Politico]

So socialism = government taxing 100% of all income/assets and redistributing it?

Would it make any difference if the story said that those who did poorly had their grade boosted by 10% and those who did well, in return, would have their grade put down by 10% to make up the difference? The end result would still be the same downward spiral. The only difference would be that it would take longer to get the result of everybody achieving F's. Or do you disagree and think things would somehow be different?

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Some may agree with the motto, "live free or die," and truly believe what you describe above. Others may see the need for basic public infrastructure (i.e., defense, legal infrastructure, public roads), but nothing of the degree seen in Europe or even America for that matter. And, of course, others favor a widespread experiment such as the classroom example described above (It is easy to see what that will lead to). With that said, this much is known with certainty: market forces cannot be legislated away. Ignore them at your own peril. I think that is the main point of this story.

[Politico]

Here's a counterexample: those who score well realise their grade is being lowered by others, and choose to help them so everyone can succeed. You may call it "tutoring".

And where in the real world can we find this? Which campus contains only students who do well because people who can do it on their own, do it on their own, while those who need help ALWAYS seek out the tutoring they need? Meanwhile, not a single student exists who does not try hard? What planet contains such a place and such species?

You are ignoring something very simple: The ones who fail usually fail because they do not try hard. And what in the world makes you think that if they cannot get a good grade based upon their own individual efforts, they are going to suddenly get a good grade under a system that promotes free riding as described?

By the way, not all students are A-material. In what world is it fair to punish the A-material types in order to reward those who either choose not to be A-material or are incapable of being A-material? And who says those of A-material are responsible for anybody other than them self, and should be required to tutor others thereby taking time away from their own endeavors and growth, ultimately preventing top individual achievement in the name of inferior collective achievement (and said collective achievement will, funny enough, be inferior to the aggregate of all achievements under a system where everybody strikes out on their own)?

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I did not know I have a model. If I did create a model, it would run under the assumption that the world runs on individuals pursuing their own separate, self-interest. All empirical evidence points in that direction. For example, good luck finding somebody who tutors free of charge. Or good luck finding professors who work for the minimum wage.

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The real world is a cold, hard place. The world does not care about you no matter how much you care about it. I do not care if you willfully ignore this, but it makes me think you're stuck outside of a realistic framework.

[Politico]

Your exercise has nothing to do with socialism or capitalism, Politico.

Your failure to see the link is your problem, not mine. But I can help you out a little bit: When you nationalize (or socialize, if you prefer) something, how do you think it is ultimately paid for?

[Politico]

Your exercise has nothing to do with socialism or capitalism, Politico.

I can help you out a little bit: When you nationalize (or socialize, if you prefer) something, how do you think it is ultimately paid for?

You fail to see that there is no such thing as a 'private' organization or business, Politico.  At present they are called 'private', but that only means that the State farms them out to select aristocrats (the rich) for their own benefit.  All business occurs because of the State, and all business is a common 'social' activity.  We are all social creatures organized and disciplined (and in a very few cases rewarded with privilege) by the State.

I see you are in favor of burning the Constitution, have no concept of what shares are nor how they are distributed, have no idea what the business of America is, etc. Perhaps you will grow up someday.

[Politico]

So, Politico, most countries in the Western world have had redistributive taxes for decades and decades. Yet I see no downward spiral - on the contrary the last decades have seen tremendous economic growth.

Does this not indicate that while your point is obviously true at some point it's hardly true for all level of taxation?

I am not sure that is the appropriate question, and I am not sure we should dive right into economies yet. I mean, obviously the analogy applies to the idea of everyone having the same income no matter what or how much they produce as workers.

The appropriate questions should probably focus on the analogy at this point and be something like this:

- Is it fair to take from students who do well and to give to students who do poorly (regardless of whether they do poorly because of laziness or lesser capability)?
- Is the class average higher when you do this?
- Who is better off and who is worse off?
- Finally, is the group as a whole better off under the new grading scheme or the original grading scheme where everybody gets the grade they earned on their own?

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Well, I suppose it is more along the lines of a truly planned economy like Cuba in the sense of everyone receiving the same income no matter how much or how little they contribute (i.e., "from each according to his ability to each according to his need" or what have you). What did Cuba end up doing with their most unproductive elements back in 1980? To use the classroom analogy, by the time the class was pulling in a D, they decided to get rid of everybody who actually scored below D by transferring them into another classroom. We see the same thing in the Soviet Union in the 1930s, albeit this time the authorities are just making the students who scored poorly disappear rather than transferring them. It seems that every time one tries to attempt to force the same income upon everybody, this sort of thing happens, or at least I know of no historical examples that prove otherwise.

[Politico]

The apocryphal professor is a braindead moron if he thinks his experiment is "socialist" in any way

Equal pay for everybody (i.e., the same income for everybody) is not a socialist idea? I have heard otherwise many times in numerous coffee shops. If it is not a socialist idea, what is it?

To elaborate, your grade is essentially supposed to be a reflection of your level of understanding of the concepts taught. If you do well, a good grade is your reward for doing the work necessary to achieve a good level of understanding. In that way, it is similar to one's income in the real world (i.e, your income is essentially what you receive in exchange for your labor and time). I believe that is where the analogy applies to socialism if you consider "income equalization" a socialist goal.

[Politico]

The apocryphal professor is a braindead moron if he thinks his experiment is "socialist" in any way

Equal pay for everybody (i.e., the same income for everybody) is not a socialist idea? I have heard otherwise many times in numerous coffee shops. If it is not a socialist idea, what is it?

A 19th century moneyed landowning conservative's idea of what those dirty socialists wanted.

Well, how come I have heard it from socialists themselves right here in the 21st century? "If everybody was paid the same amount...." I mean, surely you have heard sentences that begin with a line like that, right?

If not absolute equality in income (put another way, equality of outcome), what do socialists want?

[Politico]

No.

Socialists just want "no"?

Why is it so hard for anybody on here to actually admit what socialism stands for?

[Politico]

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http://www.econlib.org/cgi-bin/fullsearch.pl?query=socialist

This is not rocket science.

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The analogy clearly applies to income redistribution, which is the cornerstone of ANY political organization/nation that considers itself "socialist."

Now why is NOBODY trying to argue for income redistribution in this thread (Well, other than the one guy who agreed the grading scheme is good, but the good students should have to tutor the poor students)?

[Politico]

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http://www.econlib.org/cgi-bin/fullsearch.pl?query=socialist

This is not rocket science.

You must be logged in to read this quote.

The analogy clearly applies to income redistribution, which is the cornerstone of ANY political organization/nation that considers itself "socialist."

Now why is NOBODY trying to argue for income redistribution in this thread (Well, other than the one guy who agreed the grading scheme is good, but the good students should have to tutor the poor students)?

So, you think the US is a socialist economy where no one works? Since you have income redistribution.

Obviously there is a socialist aspect to the US economy, but not of the same magnitude as one would find in Europe. Should we strengthen government spending or lessen it? Should we increase income redistribution or decrease it, or do away with it altogether? Who will benefit and who will pay under each scenario? If is not fair to redistribute grades in the classroom, and doing so will create an unsuccessful environment, why is it fair to redistribute income in the real world? If we take away reward in the classroom, nobody bothers to learn. Why should we see something different if we take away incentives to work hard in the real world?

These are the type of questions I was hoping would be spurred by this thread as opposed to name-calling.

[Politico]

You must be logged in to read this quote.

http://www.econlib.org/cgi-bin/fullsearch.pl?query=socialist

This is not rocket science.

You must be logged in to read this quote.

The analogy clearly applies to income redistribution, which is the cornerstone of ANY political organization/nation that considers itself "socialist."

Now why is NOBODY trying to argue for income redistribution in this thread (Well, other than the one guy who agreed the grading scheme is good, but the good students should have to tutor the poor students)?

So, you think the US is a socialist economy where no one works? Since you have income redistribution.

Obviously there is a socialist aspect to the US economy, but not of the same magnitude as one would find in Europe. Should we strengthen government spending or lessen it? Should we increase income redistribution or decrease it, or do away with it altogether? Who will benefit and who will pay under each scenario? If is not fair to redistribute grades in the classroom, and doing so will create an unsuccessful environment, why is it fair to redistribute income in the real world? If we take away reward in the classroom, nobody bothers to learn. Why should we see something different if we take away incentives to work hard in the real world?

These are the type of questions I was hoping would be spurred by this thread as opposed to name-calling.

Well...since you admit that there is redistribution of income in the US and that it has not led to "nobody bothering" to work, there is obviously more to the story here.

If all income were redistributed it would probably lead to little being produced, of course. But it's very unclear what you're arguing precisely.

Like I said in the first post of the thread, I am interested in an open exchange of ideas, not an argument.

If all income were equally redistributed (i.e., "from each according to their ability to each according to their need"), it would lead to almost nothing being produced in the long-run. I think we can all agree on that point. Or can we? If this is true, then what degree of income redistribution, if any, is optimal? And is it fair for some to say that people who have earned a decent living still "owe" something to the less fortunate, or even those who refuse to work? Or is it fair to say that doing so amounts to theft, is unconstitutional, etc. if it is forced by a government bureau rather than taking place through charitable donations?

Let's just exchange some ideas on redistribution whether it be income, grades, etc.

[Politico]

If we can all agree that:

A) Redistribution has negative effects, and absolute redistribution is clearly a path to disaster (therefore one approaches this path to disaster the more one engages in flat redistribution)
B) We ought to still use government policy to assist the poor in some manner while minimizing perverse incentives to not work

Can we all agree that implementation of the negative income tax may be worthy of consideration?

[Politico]

If one must use a classroom as the model, then it would be a more accurate test in the following...

Grades are awarded based on merit, however A and B students are required to provide tutoring for D and F students. However C,D & F students are required to do chores for the A and B students (clean their dormrooms, pick up their groceries, make dinner for them, etc). The amount of chore time given/received may be on a sliding scale based on grade.

This is a model where the entire class is incentived to get better grades and help each other. The net result should be a higher average grade for the class.

Why has this never happened if this is in the best interest of everybody?