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Incentives

In my Macroeconomics class today, the teacher allowed a 30-minute session for students to debate on the topic of incentives. We started talking about the feasiability of socialism and one kid remarked "Communism is not possible in real life because it does not provide incentives for anyone to work." The other kids kinda nodded in agreement at this.

Well, being the commie that I am, this irked me to no end because it's a commonly uttered line amongst capitalists that is often stated but never supported. People just say it and then that stops the debate right there because people seem to have a pre-programmed "Oh yeah, that's right" reaction and automatically agree without even thinking. I guess that's the power of having a hegemony on the education system.

Anyway, I cut in and said to the student, "Can you back that statement up? I heard you assert it, but what's your evidence?" He said, "Communism is about equal wages no matter what your job is. So if a teacher gets paid as much as a brain surgeon, what's your incentive to work?" At that point, I had to cut across because that was pure Cold War rhetoric baloney. I replied, "Equal "wages"? In philosophy, communism does not believe in wages in the first place, so how would there be "equal wages?" He stopped there and I went on, "In a communistic society, there are no wages because people keep the full value of their labor in the first place. For instance, if you work for 8 hours and you produced $500 in labor value, you get paid $500 because there is no boss whom part of the value must be funneled to. In a communistic society, what you get paid depends on how hard you work. The incentive is the same as the basic incentive of capitalism: if you want to live better, work harder. The fact that you mentioned wages shows you aren't talking about communism, you're talking state socialism."

He didn't answer after that, he just kind of nodded. So did some of the other classmates. After that, we went on talking about incentives based on property where I got into a conversation on public vs. private ownership. I've also seen popular unsupported assertions like, "Socialism is unrealistic because it expects everyone to be altruistic." I'm like, "Says who?"


That's one thing that tees me off about debates on economics, people often run on rhetoric and pay little attention to reality. People go on about how "good" capitalism is and how "brutal" socialism is completely oblivious to the fact that there are peaceful socialistic states like Scandanavia and brutal capitalist dictatorships like Zimbabwe, Zambia, Argentina and Liberia.
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