Thursday, June 30, 2005


Capitalism works because capitalism is fair; not perfectly fair as in everyone always gets exactly what they deserve, but still fair as in everyone is responsible for their own results, the benefits of extra effort goes to the person who makes the extra effort, and everyone has some control over the outcome produced by their efforts.

Socialism doesn’t work because socialism is unfair. Results in socialism are not a result of effort or even associated with effort. Socialism rewards the non-producers the same as the producers. Socialism discourages hard work because there is no incentive for one person to work any harder than anyone else.

Within capitalism, there are many socialistic structures. Governments, even in the free world, routinely take from some and give to others which discourages some from working harder and rewards others for not working at all. Employees on a straight salary tend to produce less than employees who get bonuses or employees who are paid piecework because the extra effort of the salaried employee is not rewarded while the extra effort of the piecework employee is rewarded.

Minimum Wage, Fair Trade, Welfare, Farm Subsidies, etc. all seem caring and compassionate on the surface, but the application of these concepts always results in unfair results. At the core of each of these programs is one person deciding what is right for other people.

Minimum Wage laws prevent an employer from hiring a new employee until the employer can pay what the government tells them they must pay. This sometimes results in a ready and willing employee being prevented from being employed by an employer who has a need for a new employee but not enough resources to pay that employee.

Fair Trade, while not a government policy at this point, unfairly rewards some coffee and other producers while penalizing other producers. If coffee producers can not earn a living producing coffee, they should start producing a crop that will allow them to earn a living. By switching from coffee to another crop, the price of coffee will rise as there are less coffee producers, and the price of the alternative crop will decline as there are more producers. Everyone will benefit. By artificially inflating the price of coffee, Fair Trade is preventing some farmers from producing a crop that is the most benefit to the producer and to society as a whole. Farm Subsidies are not any different than Fair Trade. Both are inherently unfair.

Welfare is the worst of all compassionate ideas. Nobody benefits when one person is forced by rule of law to give the results of their effort to another person who is rewarded for withholding effort. Hard work is penalized and laziness is rewarded when a government takes from some and gives to others.

1 comment:

Hammertime said...

Where do you dig up this wacky lefty stuff?

You have been on a roll lately. I, on the other hand, have had my face stuck in books to create posts way too long for people to read. Keep up the good fight!