So I got this obnoxious chain letter this morning with one of those folksy anecdotes that’s supposed to demonstrate that Obama’s policies are leading us down the road of socialism. This email wouldn’t bother me as much if I didn’t receive a similar note yesterday warning of a “conspiracy” by those holding capital to trick the working man to take on massive amounts of debt, and when they can’t pay back, the banks will collapse, only to be nationalized and setting us on a road to—don’t say it—Communism! I’m sorry, but didn’t the Cold War end? Why am I still getting anti-commie propaganda in 2009? And I hate to break it to everyone, but that dreaded nightmare scenario already happened - last September. Remember? When all those average people who bought houses they couldn’t afford with loans they couldn’t pay back defaulted on their mortgages and the banks had to be bailed out by the government? So I guess America’s communist now?
But back to the agitprop I got this morning. The anecdote goes something like this: an economics professor, in an effort to discredit Obama’s “socialist” policies, tells his class that for the rest of the semester, all of their test scores will be averaged so that everyone gets the same grade. The first test everyone gets a B, but after that, the grades decline until everyone is getting F’s. And then the professor triumphantly declares that that is why Obama’s plan to tax the rich to provide the poor healthcare will ruin the country!
This story is so ludicrous on so many levels. First of all, a progressive tax or flat tax does not even come close to “averaging” the incomes of rich & poor, so the professor has already rendered his experiment irrelevant. Second, he stopped the experiment short of what would have been a remarkable breakthrough: once the students realized that their own hard work wasn’t enough, that they all had to help each other to pass the next test, then the class would have worked together to bring up the collective score. What the professor fails to realize is that by averaging the test scores, he’s simply changing the incentive from competing for the highest grade to cooperating for the best score.
Am I advocating for the averaging of everyone’s incomes and the creation of a communist state? Not at all. What I am saying is that we must let go of all this anti-socialist baggage we’ve got from the Cold War. Socialism is just an idea, not some supreme, universal evil. Capitalism has afforded our species much technological advancement and economic progress. But capitalism also has its flaws: overconsumption, alienation, pollution, etc. While capitalism creates an incentive to hoard wealth, socialism creates an incentive to share it. Both are useful tools and when utilized simultaneously, they can mitigate each other’s weaknesses while mutually reinforcing their strengths. This balancing act between capitalist and socialist ideas has been a fundamental aspect of our country since the New Deal. The simple fact is that we already live in a social democracy. Can we please stop acting like socialism is this dark specter to be feared, when it’s nothing more than a counterweight to free market excess?