Tuesday, July 7, 2009

Is this how our economy works...?

An economics professor at a local college made a statement that he had never failed a single student before but had once failed an entire class.

That class had insisted that 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 socialism. All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.

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.

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.

All failed, to their great surprise, 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.


Danny said...

Very thought provoking. I always like seeing this example of socialism. Shows its primary flaw. Sadly I think the whole world is headed in this direction.

Lance said...

Point well taken, Baron. I think there is an economic flaw when there is no incentive to try harder, or indeed, if one is penalized for trying harder. On the other hand, our current economic troubles point to a flaw in unbridled incentive to financial gain that looks only to short-term profitability.

subrosa said...

How very true.

Canajun said...

Interesting example, but as Lance says, the other extreme hasn't exactly served us well either. Hopefully there's a middle ground somewhere (although I don't expect our governments to find it!).

Dave said...

Thought provoking Baron...though I think we Brits tried winner takes all economics in the Middle Ages and called it, LORDS and SURFS.

It did not work out too great for the 99.99% who ended up Surfs, but the 0.01% who became Lords thought it was the best system ever and saw nothing wrong with it !

What say you Lord Baron lol...



Voegtli said...

Your story is confirmed by the breakup of the East Block in the late 80ties. Both, because of the system and the economics. And I saw the change in the people's attitude when I was working in Russia. They worked before the change. They worked harder after the change. Because they got benefits.

John McClane said...

Dave: The Brits are still all serfs. Except, of course, for you and me... we're out of it. now we're just serfs of the road lol.

Bill ~ {The Old Fart} said...

Great Post Baron ~ Have Ye ever thought of Running for Prime Minister?

Ellie said...

I was born in communist country - live 4 years in the USSR. Trust me - we got to stay away from socialism - it kills the spirit. There are 30% poor in the USA - in the communism 95% are poor.

Ellie said...

Do you and your wife speak Russian? I used to live 3 years in Komi and 1 year in Rostov on Don /was USSR then/ - have many friends there.