Market Capitalism > Socialism

Many of us have heard an example of a class in which a professor gave everyone a collective grade, and the whole class failed. Had they worked on their own, the lesson teaches us, each could have gained a top grade through their hard efforts.

But in the example of the students, there are cases where socialism works out: Sports teams work pretty much the same way. Individual stars are fun to watch, but groups that work best as teams will win games time and again.

And as for individual effort, how does that apply in the case where top grades are part of a zero-sum game, as in a class curve? I personally experienced the despair of working my hardest in a class of 20 students as gifted as I was, but only getting a D for my efforts because the professor curved every class, no exception. He agreed with me that had I been in a class of 200, I’d have an A or a B because of there being less motivated and/or capable students in a class of that size. All the same, I got a D in my section because that’s what the curve demanded. The market holds no rewards for those in the middle or at the bottom of a bell curve. Should people then turn to cheating to get the top grade, the market will reward the person skillful enough to break the rules and escape judgment and then punish the honest person that has nothing to hide.

In economies, as in governments, the biggest troubles come from individuals that seek to exploit the system for their own gain to the point of violating the liberties of others under the cloak of legality. In socialism, it is easiest to do that as a member of a government-run institution, be it regulatory or a state-owned enterprise. Think Chinese Army ownership of a good-sized chunk of China’s industrial and manufacturing sector. To rise to the top there, one needs only be promoted within the ranks to receive the benefits of the labors of others.