One of the more interesting critiques of socialism is that it discourages innovation and hard work out of the belief that individuals may feel their efforts won’t be adequately rewarded. This is a pretty big assumption and doesn’t really make sense. There is far more evidence that capitalism is what breeds inefficiency and discourages innovation.
Let’s talk about adequate rewards and the idea that only unlimited reward potential breeds hard work, and that penalizing this ability will somehow hamper growth and innovation. What would happen if we imposed an individual wealth limit with a 100% tax on any wealth generated after $500 million dollars.
Is there no incentive to continue to innovate and work hard? At a certain point, money becomes irrelevant to a person. What can you buy with $100 billion dollars that you can’t buy with $50 billion dollars? Yet billionaires who want for nothing continue to build companies, innovate, and work hard. Bill Gates was innovating at Microsoft long after he became extraordinarily rich, and Warren Buffet is still very active in the financial sector, working despite never needed to earn another cent to maintain his lifestyle. They worked hard until they decided to retire, which is what everybody hopes they can afford to do when they get older.
A Big difference between a million and a billion
Its impossible to fully grasp the real difference between a million and a billion of anything, including dollars. If you were to have a pile of one dollar bills and could count one of them every second without sleep or break, you’d get through a million dollars in about 11 days. With a billion, it would take over 30 years to do the same.
There must be something other than greed that kept these billionaires going even after they accumulated more wealth than they could realistically spend on themselves in a lifetime. Being viewed as successful, either by oneself or in society is something that becomes more valuable than earning the next billion dollars. So is the ability to make meaningful contributions to the arts, education, or bettering the world.
By realizing that unlimited money is not the primary motivator of innovation and success, it takes away the reasoning to allow individuals to accumulate wealth past a certain level. As billionaires are part of the human community, and providing opportunity for more success and more innovation, allowing a select few to accumulate wealth past a certain level is harmful to them (as members of society) and everyone else. Therefore, it makes perfect sense to consider a limit on the amount of individual wealth accumulation after a certain point.
Laziness is a byproduct of capitalism
Now let’s look at the other end of the spectrum—people that are lazy and totally unmotivated to work hard or innovate. Most people do not want to be lazy and do nothing all the time. It is a lack of opportunity to do meaningful work that is the real deterrent. For example, I would love to open a coffee shop, but I don’t have access to the funds to do so. Perhaps there is a way for me to do this, but I am not educated enough on finance to figure it out. Either way, it means I am less productive because of the lack of opportunity.
Such a lack of educational opportunities, the inability to access consistent, quality food, and being unable to receive proper medical care in areas of high poverty mean that people do not have access to the basic tools to be productive. They cannot innovate without skills, knowledge, and an empty stomach. Some would argue that they simply have poor character, believing anybody in America can be successful, no matter their circumstances. Yet these same people would balk at their child being assigned to an inner city school in a poor neighborhood, because they know it will severely limit their child’s future opportunities.
Most people decide to “settle” when it comes to wealth accumulation. Upper middle class families can build businesses, create jobs, and innovate, yet they only do so to a point. They settle on an income to pursue other priorities like family, recreation, or to pursue other interests. The rational person does not see income generation beyond a certain point as an overriding priority. Many of these people are also held back from innovating out of fear that the consequences of failure, even through no fault of their own, and would be economically disastrous to them and their families. There is a lot more incentive to avoid the risk taking that drives innovation.
A double standard on “taking advantage of the system”
Where the line should be drawn for individual wealth is something that should be studied, and weighed against the public good of providing opportunities for everyone to pursue the American dream. Will there be exceptions to the public good? Will some people simply take advantage of a different economic system? Absolutely. People of all economic backgrounds are also taking advantage of the current situation. From the guy selling food stamps to the wealthy business owner trying to double claim deductions, there will always be those who are dishonest. So if one argues income limits won’t work because people might cheat is true, then our current system should also be rejected because people are actively cheating right now.
Everyone agrees that there should be some level of societal good, if for no other reason than self interest. We give out free polio vaccines to people who cannot afford to buy them both because we don’t want people getting polio, but also because we do not want rampant polio infections to potentially harm us. We provide universal fire fighting services, even though some people do not contribute any taxes to support this. Believe it or not, there was a time when firefighting services were privatized, and firefighters would let houses burn down if they hadn’t paid for insurance protection. Not having fires burn out of control and destroy your house as big a motivation as not displacing poor people by allowing their houses to burn down.
There is no reason that we must draw the line of universal basic human entitlement at an absolute minimum. We have built more wealth than at any point in human history—that the wealth is so excessive that we do not know what to do with it. There is no reason to continue the cruelty of a brutal and punishing system of poverty that traps Americans from doing better.
Our lost innovation
For every innovation of capitalism today, there are dozens of innovations lost because of inefficient distribution of resources because we refuse to invest in people. There are incentives to cheat the system at every level, and there are reasons people continue to innovate long after the economic reward becomes irrelevant and practically meaningless.
As a society we must consider if allowing a few people to accumulate the vast majority of wealth is truly making America innovative, safe, and able to compete in the global marketplace, or if it hindering these things. We must reexamine how we define rewarding success, and decide if we are personally better off in a system where tens of thousands of the jobs we have created could be made obsolete. Does it make more sense to employ an army of people to second guess doctors and find ways to deny medicines or surgeries because it is less profitable? We are already paying exorbitant amounts of money to insurance companies to provide healthcare. Perversely, they use a portion of the money we pay them to provide obstacles or deny healthcare to make wealthy insurance executives even more wealthy.
Already, a 40 hour workweek is excessive to maintain society, and even less would be needed if we eliminated punitive and harmful jobs like like those deny our claims. We all pay money to employ these society harming jobs instead of deciding it would serve us better to provide healthcare for all. This does nothing to advance the causes of freedom, nor does it drive innovation, or serve the greater good. When we are ill and unable to get treatment, we are unable to work hard, or sometimes even work at all.
Our continuing punishment of ourselves breeds failure
America has a strange system where almost everybody frets about money, opportunity, and maintaining a good standard of living. No one ever says, “Will somebody think of the billionaires,” yet we spend our lives working hard to enrich a select few. A family that once could be supported on one full time wage now needs two. We’ve invented the “staycation” because we cannot afford to travel. We have allowed innovation to make our lives worse instead of better. Why is it that everything costs more hours of our labor to maintain the same standard of living? Why aren’t younger generations able to afford moving out on their own and establishing their lives until they are well into their twenties or even their thirties?
If you’re working just as hard as you were before, but struggling even more, then by current definition you are failing. You are not successful, and under our system you deserve less for you and your family. In reality, unlimited income earning potential does not make 99% of us more successful. It makes us weak and unable to innovate the future. A rising tide may lift all yachts, but it crushes the little boats wedged between them. To revive the American Dream, we must do better.