Wherein i get a bit tired of an old story popping up again and decide to make my own faulty analogy in response. I’ve seen this before in various ways, but here it is, pretty much in full:
An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, “OK, we will have an experiment in this class on Obama’s plan”. All grades will be averaged and…… everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little..
The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F. As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else. To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. It could not be any simpler than that.
It would be great if that last line were true. If everything in life could be simple. Alas.
I’ll start off with a bit of rounding out here. Firstly, Obama is not a socialist. I could go on and on and on here, but that is it. Obama is not a socialist. Full stop. Additionally, I am pretty sure he does not have any “plan” to force everyone to have the same income (as is the implication). Of course at this point, you can dismiss me as a lunatic for not getting the humor in the hyperbole here. Just tell me to loosen up or something.
It is interesting to note, at this point, that the economics professor had never failed anybody. So working in the analogy of grades as income and this class as a nation: that professor was the dictator of a country which had never experienced poverty. It would be nice if that is how things were in the real world, but no, the US has a poverty rate (failure rate? failure at life?) of 15.1%. Also the average grade of B on the first exam is an interesting phenomena that economists can explain: inflation.
Something just doesn’t sit quite right with the analogy though. It is a test, not an open market that people are trying to succeed at. It is as if there is only one possible job in the economy, people cannot use their cunning and skill as they see fit, they can only attempt to satisfy some incredibly top down checklist and reach out for their paycheck. This is more appropriate for a manager of an assembly line where everyone gets paid the same for the same job because, you know, that makes sense, but not quite. The classroom is not an economy – the students are only having an interaction with the professor – they are not interconnected (ok, they can, but not in the given example). In the real world, a businessman’s success depends on his customers having the money to support his store. These different roles are not represented in this analogy.
So I started thinking, how could we make this analogy work?
I will spare you the details of my thought process because it involves me taking a shower and thats just not something that I need to get into right now, but here is what I came up with.
This class is a freshman maths class or something else big and freshman and lecture based. Everyone in the class has different skills, different test scores, different resources and different material goods. Some of the kids are super smart and have great test scores, others just have decent scores but learn quickly and know a lot of resources to use to get more information, some kids just have all of the right books, they paid for the extra texts suggested for the class, but maybe have not read them, some kids are smart, have great scores, all the books and know every possible resource out there, others have poor scores and no books or knowledge of reasources. This is an intro lecture course, so there are enough people to make a pretty broad range of combinations, but the idea is that nobody is the same (duh).
The professor says that the goal is to learn (duh, again). Lets go ahead and make the grade = money analogy link (sure). Well what is learning? That is your success or whatever you want to call it. So learning leads to grade grades, much like success leads to money.
Now the professor splits everyone up into groups and sets them on a project where they have to learn something and make a presentation and take a test (ugh, that sounds like school. Typical professors, making people learn and stuff). The success of the group is dependent on the success of the individual members (to stick close to the original analogy, the group grade is just the average of everyones part of the presentation), though of course, everyone will be getting their own grade on the test (how un-creative this professor is).
Within each group, some people are keen to learn and have access to lots of resources (like, wikipedia or something). Some understand the assignment pretty well from the get-go, others have no clue what is going on. Some are natural leaders, while others are hard working, lazy or possibly both (manic?). I am going to wind down talking about my analogy here because it should be pretty clear what is happening. Everyone in the group realizes that their grade depends on everyone LEARNING. Their grade, their income, depends on everyone doing well, everyone learning. This actually becomes a better case study on education really quickly (because group projects and teaching someone else something are really great ways to learn for everyone involved). The kid with the books benefits if he shares with others, the kid who gets what is going on benefits if he explains it to others. The born leader may get them all organized while the hard worker gets to work pulling information for the others. When it comes time for the presentation, the individual parts are graded and then averaged (this is like taxation, i take it).
While the people who learn the most and do well on the test earn a better grade overall, as well they should, they cannot deny that their classmates had a great impact on their actual success. While the skills and motivation and resources that they had before they came to class helped drive their success, everyone benefitted from the sacrifice of time and effort to help each other. Also, doing a large, multifaceted presentation on your own is hard, by the way.
I am rapidly falling apart trying to explain this, but you can see what I am saying here.
In case you missed it, taxes are what we pay (not 100%, mind you, nobody is starving after taxes who wasn’t starving before them) so that someone else (conveniently, the government, this is the whole point of having one, btw) can go provide those resources and education and healthcare and know-how and what not to those who need them, because it would actually be quite difficult if everyone had to do that individually.
You can extend this analogy to talk about the smart kid who never did well on tests, or the kid who just bought and memorized the cliff notes and made great grades but was actually a total idiot, and the kid who just happened to be in the right group, with the really nice kid who did a lot of the work for them… but you get the point.
In an economy, everything is interconnected. A businessman with a great idea for a product will fail if nobody has any money to buy it. A great middle class forms the body which consumes the goods made. If iPhones were priced such that only the top 1% of the population could buy them, Apple would be far less successful than it has been. (OK, fact check on myself: only 73.5 million iPhones have been sold so it is entirely possible that they all went to the top 1%, so fine, rich people make good customers. But think of Nokia, or Johnson and Johnson, or MMM!) It is the middle class consumers what create jobs when they purchase goods and services.
Social safety net programs are not some sort of charity, and they are not to keep people from working, they are to prevent people from falling into dire poverty. Our economy depends on people being well enough to work, and well off enough to consume products. If people slip into dire poverty, they aren’t well enough to work, nor well off enough to consume. Everybody suffers as a result. This is not some frozen tundra, where the weak can simply die off as the strong fight in a brutal evolutionary environment, this is civil society. Sure, evolution still happens, and hard work should lead to success, but no infrastructure and a bunch of incompetent workers and dead consumers is not the ticket to GDP growth.
(If you want a real free market example, take the dictatorial professor out. Just chuck everybody into a room with a test and see what happens.)
(Also, while we are on analogies, baseball. While of course the successful teams will generally make more money, pay better for better talent, etc, the league shares tv revenue etc. This isn’t charity, nobody would watch baseball if it was just a couple of filthy rich teams shutting out every game they showed up to. Ok, bedtime.)
