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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3 years ago

It’s reMuneration, not reNuMeration.

Juanita Casey
4 years ago

Wow. Simply stated, and true. Sharing this. Ty.

joseph gunn
4 years ago

Obviously this study is widely flawed as it only demonstrated on part of the discussion here which is “socialism” and to be honest, to compare socialism in that mundane example really shrinks down the possibilities. Imagine having it the “capitalistic” way and you still have many things to think about like your electricity, water, your shelter, food, labor rights, and other things that you can’t afford. In a socialist standpoint, these problems could also be easily solved. Additionally, who said you can’t complain about the “pool system” under a socialist economy? Socialism is important because the people in charge are the people who are workig hard for the money.

5 years ago

Socialism doesn’t work in an individualistic culture such as the US. If you’re in a collectivist culture, however, socialism can work. Those in collectivist cultures put the group before themselves, and feel they can help the group by getting higher tips (as this increases the amount of money in the pool). As a result they often work to get better tips.

Ana Caldera-Carson
5 years ago

Hard work and seeing the fruits of your labor is the only thing that works and makes us reach higher

5 years ago

Point proven. Capitalism works.

5 years ago

Which party sees the Federal government as Robin Hood and which sees it as the Sheriff of Nottingham? Whichever, Robin Hood didn’t have a job. He was just a thief. And the Sheriff? He was a government employee.

5 years ago

Notice that those promoting this garbage are either wealthy and couldn’t care less about anyone else or lazy as all get out and feel that everyone owes them for that reason alone!

Janice Morrow
5 years ago

Every economy is capitalistic. The question you should ask is “Who owns the capital?” Because capital is the means of production, it is used in every economy. In the U.S. we have a “Free Market Economy” which allows the individual to own the capital, use the capital and dispose of the capital. Individuals in the US have the right to private property ownership. Therefore, in the US economy, the individual is able to enjoy the fruit of one’s labor. In a Socialist economy, that government controls most of business through excessive regulation and ownership of businesses, with limited private property ownership. unless you are favored by those who are in power. In a Communist economy, the government controls all capital, labor and any growth in business. In addition, they control the ownership of all private property.

So, we need to understand the terms and stop calling the US capitalistic because very economy is. We are a “Free Market”.

Joan Legue
5 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 was NOT qualified to be PRESIDENT, came on the scene that I realized the Democratic Party had changed to support the people who choose not to work more than the real workers. That his policies would and have unbalanced out country to a dangerous level. I changed to Republican in 2008 and have really paid attention to politics for this last 9-10 years and learned the truth about history and the Democratic Party, I wonder what Kennedy and Roosevelt would think of the Party now??
The Republican Party is in need of a shake-up to get back the their roots and stop bickering and support the President we now have, who is succeeding in his promises even though many do not support him.
The day I watched he and the First lady tough the Wall in Isreal I realized he is a true believer and can help heal the rift America has with out allies and other countries that was caused by the last Presidency.
I am a Catholic Christian and try to live my life to reflect that belief. TRUTH and treating others as you would want to be treated is what I live by,
I hope my comments reach some people who are confused about reality.
Blessings and Love from God to all.

5 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 swim. And, Maybe just maybe America can be saved for our grandchildren!

Wayne Peterkin
5 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 their lust for political power over people makes the ends justify the means.

5 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.

Jeff S
5 years ago

I used this in my economics classes that I taught for 15 years. Great example!

6 years ago

Exactly! I actually worked gigs like this and I can tell you, those lazy people always push the work on to you but are FIRST in line to collect that money. All the while, they are complaining to your boss that you won’t help them, or basically do their share of work for them.

What gets me is that Bernie & his supporters are so short sighted. So there’s a giant bureaucracy that has given special privilege to corporations that made them rich. So in conclusion, we will get the very same bureaucracy to tax those rich individuals at 90% and spread the money around to the poor & needy.

Does that sound like a good plan?! All I can say is it’s all pipe dreams if one thinks that will happen in a fair & orderly fashion (if it even got through congress which I doubt it ever would).

7 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?

5 years ago
Reply to  Derek

Absolutely, that is the basis of capitalism. Socialism is from each according to his ability, to each according to his need. And no matter what folks such as Jason are always going to be the neediest.

7 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.

D. Dow
7 years ago

The truth hurts.

7 years ago

Remuneration that is equal to their efforts and skills? What planet you live in? That’s what capitalism does? What capitalism does is make profit. This is done by exploiting workers. Period. That’s why businesses are moving to other countries. Too much regulation is strangling business, that’s why they go overseas? Yeah, overseas so they can EXPLOIT those workers. Hard workers get raises? I’ve worked hard ALL my life and I never got a raise unless my job had a union to fight for that raise. Hard working Americans get raises and other benefits?
Tell that to the hundreds of thousands of people who lost their jobs overseas. Capitalism is great when you are a capitalist. The system is designed for that. If you’re a worker you get SCREWED! The system is designed for that. The average American thinks that one day HE will own the means of production. That’s what he busts his ass for. What about the rest of us peons? WE GET PIED ON! When you compare American standard of living to the rest of the industrialized world we are sadly lacking in every category except making a profit! Zurita con zetaahh!!! :-)

7 years ago
Reply to  William

You sound like a dumb college student. Wake up and smell the reality. Once you spend the next ten years in the work force your views will change.

People work for money, and they seek advancement for more money. No human being on the planet desires to work for peanuts, which is why so many people have left their impoverished countries to come to this one. The sad thing about Americans today is that immigrants come here, work harder and study harder than people born here, and reap the rewards of their hard work while Americans who choose to do the bare minimum in school and college, if they choose to go at all, feel short changed when they find out that the only jobs available to them are menial and low paying. How many doctors out there are Indian and Chinese? What does that tell you? What about the IT field? Who dominates that? These are the people making $70,000+ a year before taxes. If you want to be part of the middle class and earn as much as they do, go to college (and learn how to spell “peed”) or take up a trade and work to excel at it. Either path should ensure that you will build wealth over time, if your smart and don’t waste your money on stupid sh!t.

Stop feeding your mind with that senseless sociology crap about “means of production” and who owns them or not. This economy is moving away from that anyway. Marxism as an ideology is outdated and irrelevant in the 21st century. When he wrote that, he also predicted that in Europe the wealth would not be distributed to the masses, but he was wrong because he didn’t live to see the end of the 19th century, as well as the 20th, where the standard of living globally has improved ten fold for everybody. In America, even broke college students can save up and buy a car. 50 years ago the average American family owned just one, two if you were upper middle income.

If you truly wish to understand how things work start by reading “Economics in One Lesson” by Henry Hazlitt, “Animal Farm” by George Orwell, and “Atlas Shrugged” by Ayn Rand.

James Kratos
7 years ago
Reply to  Peter

Hear! Hear!

7 years ago
Reply to  William

If one company is screwing their employees so bad, then the employees will go elsewhere. The company will lose profits if they lose they’re good employees. Employees are paid what they’re worth.

James Kratos
7 years ago
Reply to  steve

Wrongs wrong, and wrong. Have you ever worked in fast food or retail? The fact is there is no fixing this problem. My advice work those jobs when you need money and have no choice then leave as soon as possible. I keep telling people thar my generation has become hourly mercenaries, benefits are almost nonexistent, 401k plans are shit. We go to whoever pays us the most.

7 years ago
Reply to  James Kratos

Fast food and retail aren’t careers though, unless you go into management, which most people don’t do because those kinds of jobs suck. They’re only meant for people to make it through college or get extra pocket change, not provide for a family.

James Kratos
7 years ago
Reply to  William

When I worked for krogers, the union made sure we got a ten cent at least every 6 months while forcing us to pay them $40 a month. F*** old people and their unions.

Christian Pecore
7 years ago
Reply to  William

Yes, worker exploitation does exists, but just as there is competition between companies for goods and services, there is also the same competition for a skilled labor force. why haven’t you switched jobs or companies if you are getting screwed so bad? if you have, then maybe the problem isn’t that you are being exploited, maybe the problem is that you are simply not qualified to receive benefits and salary that you are looking for. The rampant sense of entitlement that unions instill in their members is the exact reason why people like yourself cry out against capitalism when the simple problem is that you have nothing more to offer to the work force. For every raise your unions offer, they take just as much or more in fees. Finally, your statement about standard of living is out of place because many of the countries in front of the US for standard of living will ultimately face economic trials in the near future due to unfunded liabilities and a stifling of the private sector

victoria farquhar
7 years ago

Besides the fact that there exists this irrational fear of “socialism” in North America which has but little to do with actually understanding what socialism is and everything to do with propaganda, fear-mongering and just pure brainwashing, how about thinking why do these people need TIPS. If they were paid a decent, living wage there would be no need for tips. The underpaid workers in hospitality/service industries are a direct result of the wonders of capitalism. Making profit off the work of others.
There’s also the almost never mentioned fact of corporate welfare that relies on government hand-outs in form of tax breaks and subsidies, not to mention “bail-outs” (e.g. 2008 “too big to fail” bank bail out).
Stop eating up the mass media bull and try thinking for yourself. It’s all right in front of your eyes. Wake up!

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