In response to my review of The Spirit Level Delusion, commenter John asked:
If I had a chance from birth of living in a competitive environment, based on hierarchical ranking, acording to ‘public achievement’, or a more cooperative one in which everyone thought more about the welfare of each other rather than themselves, based on ‘personal fulfilment’, I know which one I’d prefer.
What about you?
I think this explains a lot about why people find socialism appealing. They want to live in a village from a children’s story, with the postman always helping out the baker. They want to live in Happyland. But they forget that human nature makes this impossible, so they get into all kinds of trouble trying to bend human nature.
It is possible for people to co-operate and think about each other’s welfare. Families, groups of friends and even companies do it all the time. But it does not scale. It is not human nature to care very much about the welfare of someone in another city you’ve never met. You might say you care, but are you willing to sacrifice a family holiday for a random stranger?
The Spirit Level is not a book about places where people are co-operative and care about each other’s welfare. On the contrary, it describes societies where wealth is redistributed by force.
If people really cared more about the welfare of strangers than their own, you would not need the force. Wealth has to be redistributed through taxation, that is to say by threatening to put people in prison unless they pay money to the government. Since they’re not doing it voluntarily, it’s safe to presume that the people who are net payers into the system either resent it, or have been persuaded that they are really paying into a fund that will at some point in the future benefit them personally, or otherwise do not understand what is going on.
It’s not sounding much like Happyland.
So what really happens when people are forced to “co-operate” and “care” about each other’s welfare? Human nature is revealed: people follow the incentives in front of them. If I find that I have to do twice as much work to earn 50% more, I am likely to decide that it’s not worth it. So you lose some of my productivity. What you get from me will be less than my ability could provide.
If people find their needs are met without any effort, they’ll take that deal; it would be irrational not to. But it’s not a very satisfying existence, so you end up with lots of unemployed, unemployable people causing trouble, and the productive people resenting them. After all, people know what is fair. If half of your earnings are taken away so that a stranger can live in a big house for free, it’s not fair.
So perhaps if Happyland was on offer, I would choose to live there. But it’s not. Attempts to force Happyland into existence invariably end up like the Twentieth Century Motor Company of Starnesville, Wisconsin. Everyone might be equal, all right, but they’re a lot poorer and not too happy about it.
Now you might be getting the impression that I take a dim view of human nature. Far from it. If people are left to their own devices; if they stand by their own achievements; if they are not faced with perverse incentives such as being better off by not working; then they are resourceful, they co-operate, and they help each other. It’s much easier to help someone if you know him personally, and you can decide for yourself whether or not to help him based on your own judgement of his merits. You’ll do it willingly.
If you know you can work twice as hard and reap all of the benefits, you’re more likely to do so and your productivity will be of value to others. The generally increased productivity means people are richer.
If you know that your choices are to work hard to feed and house yourself, or to go cap in hand to your family, friends and neighbours, you will work hard. And if you fail, people will see that you tried and will help you. That’s human nature too.
It’s the Happylanders who think that freedom equals chaos who have a dim view of human nature.
So I’ll take the competetive environment, thanks. I’m a net producer, so I already know I’d do well in it. And given the chance, I’ll look after me and mine, and they’ll look after me.