Why Socialism Doesn’t Work, as Learned by a Waiter

capitalism-socialismfrom – lastresistance.com – by Rob Knowles

In practice, socialism didn’t work. But socialism could never have worked because it is based on false premises about human psychology and society, and gross ignorance of human economy.” – David Horowitz

I had a topic in mind for today’s piece, and was set on writing about it when my roommate came home from his new job as a server. Our subsequent conversation blew me away because despite my roommate’s ardent support of Democrats, and Bernie Sanders specifically, he made an inadvertent argument against socialism.

I sat on our big red couch in awe as he said the following (not exact wording):

The job is really nice. The only annoying thing about it is that our tips are pooled. It kind of makes you wanna work less hard because you’re not getting your tips directly.”

I smirked, and simply said:

“Tip pooling disincentivizes hard work.”

I know this to be true not just on an intellectual level, but on a personal level. When I worked at a job at which we received tips, my employer pooled them, and divided them equally based on hours worked. It didn’t matter if during your shift, you collected a total of $100 in tips, and during another employee’s shift, they collected $40. At the end of the day, everyone benefitted from the hard work and personability of the better employees.

This is called “disincentivizing,” and it’s one of numerous problems with socialist policy. As David Horowitz said, proponents of socialism don’t understand human psychology.

When one works, one expects renumeration that is equal to their effort and skill level. That’s what capitalism does; it incentivizes people to work harder because they know that their efforts will be rewarded monetarily or otherwise.

Socialism, on the other hand, disincentivizes people because their work isn’t valued individually; it’s valued as a collective. When someone knows that the value of their individual work will be lumped together with every other employee, rather than evaluated separately, they tend to work less, and produce less. They work less because they know that at the end of the day, everyone will get the same paycheck, regardless of the value they add to the company.

In every business, there’s inevitably one or more employees that work noticeably less than the rest of the crew. If they’re getting the same paycheck, why would you break a sweat trying your absolute best?

In a capitalist business, the lazy employees would be fired or reprimanded for their lack of performance, and the hard working employees would be rewarded with raises or other advancements. This leads to a strong drive to perform.

Humans run on incentive, and if you take that away, they fall apart. Tip pooling is a microcosm of socialism. My roommate stumbled upon a profound principle of economics and human psychology, but is still a Sanders supporter. However, I think there’s a chance that with some gentle nudging, he may come around.

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4 years ago

Everything is paid for with money created by capitalism, private and public projects, even welfare. When the liberal socialists get rid of capitalism we’ll have to get in line to get toilet paper like Russia. The government has not created one dollar only liberated, borrowed, and printed it.

4 years ago

The economic system is broken, pure and simple. With entitlements America must keep growing in population to pay for the people receiving benefits today, BUT if you keep bringing workers into the country wages remain suppressed. So what, then, do you do? If you are the Democratic party, you accuse Republicans of keeping you down while you continue the flow of low skilled, low wage workers into the country, forcing up electricity, water, and gas bills through regulation, push up the prices through inflationary policies, and denying it the entire time or claiming that it has to be done due… Read more »

4 years ago

government jobs are another place where, after a six month working test period, it is virtually impossible to fire an incompetent or nonproductive employee. Workers are hired or promoted into job classifications where duties are defined and pay grades include a minimum to maximum salary structure. Good workers carry the non-producers. The inherent power behind many government jobs often leads to the arrogance you experience dealing with a government agency. Socialism equals big government, paid for by the taxpayers, who are then over-regulated by these government workers and the agencies they work for.

gary w
4 years ago

This lesson is a small but accurate view of the dangers of socialism… Less taxes is better, it allows the people to use, invest, grow all by themselves rather than allowing the government to.. Take care of us.. And in turn allowing the government to squander all of the extra tax money..

4 years ago

There is a good reason for your friend’s attitude. It is called American public education. Teachers colleges indoctrinate our prospective teachers in socialism. A few years ago my grade school age grandchild brought home the new version of “the little red hen”. Remember her? She was the little hen that worked hard to plant and produce her wheat, harvest it and bake her bread. During the whole process she was asking the other animals to help but none would. When the bread was finally ready all the other animals wanted to help her eat it. She refused to share and… Read more »

Ron H.
4 years ago

If GM were run like the Federal government it would’ve gone out of business in less than 2 years… Many of these comments currently here make a great deal of sense to me but I’m just one guy in a S*#T-storm of liberalism. How can we as thinkers do anything to change all this and recover “my” country? I’m a retired Navy, Viet Nam “Brown-water sailor” and chief petty officer who was all-too-glad to put it one the line for my Shipmates when it all hit the fan (you didn’t fight for God, Country, Mom, or even apple pie. You… Read more »

4 years ago

“From each according to his ability, to each according to his work”. In other words, people should get what they work for. Agreed?

4 years ago

We have too many young people who feel that they have no hope of the future. If you have nothing, socialism looks good. If you have nothing and no hope of ever having anything- that is Communism. Communism is what you have after Socialism fails, again.

Charles Williams
4 years ago

I’ve never worked at a job where tips were part of the pay scheme. I have however worked at a job as an electrician. I started at the bottom and worked my way up. Learning the trade and working hard for 45 years. After twenty years the pay had topped out which is expected unless taking the next step to owner/management. No problem but, every time minimum wage is increased for those who have not paid their dues it meant that the value of each dollar earned was reduced. Kind of the same socialist scheme. Increasing minimum wage, devalues the… Read more »

4 years ago

The problem with America today is that too many people want top dollar wages for low effort output! … Too many people want the rewards of top wage earners without putting out maximum effort and/or are just not educationally qualified. We all can remember schoolmates who seemed to just skate by with very average effort or just weren’t capable of reaching a higher level of performance. Grade A average students were more desirable than C average students but thanks to the Socialization of the Democratic Party, we began to see Capitalism in reverse. Starting with Affirmative Action … all of… Read more »

3 years ago

This is so simple I can’t understand why more people just don’t seem to get it. Capitalism is about independent thinking, hard work and Just reward. socialism is about dependence on someone or something else for your subsistence. Politicians and bureaucrats are about power. More socialism = More power. Unleashed capitalism = More freedom. Not many innocents in government. Why do you think, in their own way, members of both parties and their minions in the media are fighting the Prez at every turn? Because if he succeeds in draining the swamp there will be nowhere left for them to… Read more »

D. Dow
4 years ago

The truth hurts.

Joan Legue
3 years ago

VERY good example of the truth! I worked for BellSouth for 30 years at 6 different jobs. When I started in 1970 I was a Democrat and believed in the Union. After many years it dawned on me that no matter how hard I worked I was paid the same salary as anyone else who had worked for the 4 years to get top pay. I got good to excellent reviews but no raise for the efforts. I watched as the Company got closer with the Union and the GOOD employees were not rewarded. It was not until O’Bama who… Read more »

Mark Hedtke
4 years ago

Why is it that so many authors of articles when they include images that they fail in even providing correct positioning of the layout of images? That which I am referring, the example of the sign post displaying Capitalism as a LEFT arrow and Socialism as a RIGHT arrow. Think carefully about which direction is referring to Conservative values, ie Capitalism and which way is referring to Liberal values. It is quite apparent that the signs need be switched to reflect their proper viewpoint. All you ever need to remember is Right is always right and what is Left is… Read more »

Wayne Peterkin
3 years ago

Thank you AMAC! I have been making this same argument for years now. Socialism/communism fails because it runs contrary to human nature, and that human nature never changes. People will work hard to innovate and produce if they and their families will benefit from the effort required. But if their reward is confiscated in large part and redistributed to those who have earned none of it, there is no point to making the effort, so innovation and production decline. The principle is very simple and should be obvious. Sadly, to the socialists/communists among us, it either is not obvious or… Read more »

David F Mayer
4 years ago

So true. That is why I make it known that I am a good tipper. I get superior service.

4 years ago

The missing piece of this argument is ownership. If the workers are also the business owners then the incentive to work is greater. Resource pooling is viewed in a different light through the eyes of collective ownership.

Joanne M
4 years ago

worked at one job and if anyone stole money, all employees had to pay back half (if there were two working, 1/3 if there were three, etc.) so the one who stole always kept half, or third, etc. of his take and was never sought for or caught or punished. Boss always wondered about the turnover — except for one really loyal employee who got praise and raises.

4 years ago

Great lesson on socialism! However, we have so many low information voters that will never have the motivation to work hard for anything when they get everything for free or subsidized by the American taxpayer. We need to put welfare reform back in place to get the low information voters to work and pay taxes.

3 years ago

ACtually…I sometimes ask a waitress if she gets the tips herself. It’s a good thing to do…and thereby giving it to her directly.

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