October 31, 2017
By Rob Knowles • The Association of Mature American Citizens
“In practice, socialism didn’t work. But socialism could never have worked because it is based on false premises about human psychology and society, and gross ignorance of human economy.” – David Horowitz
I had a topic in mind for today’s piece, and was set on writing about it when my roommate came home from his new job as a server. Our subsequent conversation blew me away because despite my roommate’s ardent support of Democrats, and Bernie Sanders specifically, he made an inadvertent argument against socialism.
I sat on our big red couch in awe as he said the following (not exact wording):
The job is really nice. The only annoying thing about it is that our tips are pooled. It kind of makes you wanna work less hard because you’re not getting your tips directly.”
I smirked, and simply said:
“Tip pooling disincentivizes hard work.”
I know this to be true not just on an intellectual level, but on a personal level. When I worked at a job at which we received tips, my employer pooled them, and divided them equally based on hours worked. It didn’t matter if during your shift, you collected a total of $100 in tips, and during another employee’s shift, they collected $40. At the end of the day, everyone benefitted from the hard work and personability of the better employees.
This is called “disincentivizing,” and it’s one of numerous problems with socialist policy. As David Horowitz said, proponents of socialism don’t understand human psychology.
When one works, one expects renumeration that is equal to their effort and skill level. That’s what capitalism does; it incentivizes people to work harder because they know that their efforts will be rewarded monetarily or otherwise.
Socialism, on the other hand, disincentivizes people because their work isn’t valued individually; it’s valued as a collective. When someone knows that the value of their individual work will be lumped together with every other employee, rather than evaluated separately, they tend to work less, and produce less. They work less because they know that at the end of the day, everyone will get the same paycheck, regardless of the value they add to the company.
In every business, there’s inevitably one or more employees that work noticeably less than the rest of the crew. If they’re getting the same paycheck, why would you break a sweat trying your absolute best?
In a capitalist business, the lazy employees would be fired or reprimanded for their lack of performance, and the hard working employees would be rewarded with raises or other advancements. This leads to a strong drive to perform.
Humans run on incentive, and if you take that away, they fall apart. Tip pooling is a microcosm of socialism. My roommate stumbled upon a profound principle of economics and human psychology, but is still a Sanders supporter. However, I think there’s a chance that with some gentle nudging, he may come around.
Posted in Economic Freedom |