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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135 Comments on "Why Socialism Doesn’t Work, as Learned by a Waiter"

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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.

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..

Yo Gary, for the last 35 years taxes have been cut for businesses. What are businesses doing with extra profit? They put in in Cayman islands banks, not reinvesting it in American businesses. Zurita con zetaahh!!! :-)

Federal tax rates were cut in 1982 under Reagan from 70% down to 50% and then again 19 38.5% in 1987. in 1988 he cut them to 28%. Bush Sr. raised them to 31% in 1991. Clinton raised them to 39.6% in 1993. Bush Jr. cut them in the early 2000’s. But the problem with the tax code now is that there were more tax breaks in the past and deductions that are now defunct. Even when the rate was a whopping 91% under Eisenhower, nobody paid that because of the deductions, as well as the fact that, adjusted for inflation, people earned a lot less money back then. They simply didn’t fall under that tax bracket.

I believe, as an individual, I’m a much better judge of how to spend my money than the Federal government, and would prefer to keep more of my money, thank you very much.

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 to “global warming”. We can’t produce steel anymore due to federal regulations making it not economical. The coal industry was killed due to regulation. OSHA and the NLRB can’t turn on the lights without making it more expensive to do business. You have to realize that we live in a… Read more »

Cheap ass…

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.

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 rightfully so. The lesson of course was “no work. no eat . But this new version? The little red hen was planning a party and she was asking the other animals for help. They all refused but got to attend the party anyway! Lesson: no work but party down anyway!

I call bullshit on that one.

The Little Red Hen (Makes a Pizza)

Who could forget that bitch? Every child with a good heart hated her. I know I couldn’t stand her attitude. It’s more like… we were being indoctrinated at an early age to accept the flaws and bad attitudes of capitalism. No ma’am. Not in my generation.

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

The truth hurts.

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 fought for each other). Hopefully I will live long enough to see a return of my country’s values and all the great things that many of us seem to hold dearly.

GM was about to go bankrupt when you and I shared our tips with them.

Poppy while I agree GM was bailed out by the government they DID go bankrupt and cheated all the stock holders out of their money. I’ll never own a car made by those low lifes

So now thats a “double whammy” took our hard earned money AND then went bankrupt.. somebody should go to jail for that kind of fraud.. & prob the govt for faciiitating this/picking losers

So you want your country back? What about my country? I am also retired Navy. However I believe I was serving to protect the rights of everyone. Do you people not see that productivity has gone up steadily since 1940, but middle class wages stopped keeping pace in 1978. The person who wrote this article suggested that it was the governments fault that people are not productive because they disincentivize work, however I submit that it is large corporations that are doing that because they can pay a CEO $5,000 and hour but don’t want to pay a starting worker $15 and hour. We have lots of proof that when you pay a decent wage you can make lots of money. Ask Costco. If we are to be a great society again we will have to share in the prosperity and not ask those on the bottom to do most… Read more »

First…Costco has many people who work for 3rd party companies paying minimum wage so it is not all that great a place. But who do you think passed “corporate laws” in the first place? It was GOVERNMENT. Government policies, from the Federal Reserve to minimum wage laws, destroys jobs and takes away opportunities. Big corporations are a SYMPTOM…not the cause of our economic troubles.

Fact is, Hillary Clinton makes more in one speech than 99.99999% of CEOS on America. It us a myth that CEOS make millions. Only a VERY few, very elite individuals can run a GM, Walmart, etc. and make that kind of money.

I am very proud to work for a very large corporation that builds nuclear submarines for the US Navy. If you think for one minute just any shmo can run such an operation you are a gullible, naive moron…

And if you are convinced it’s so easy go to their website and apply. May the best person win! But. It won’t be you…

William, corporations are owned by the free citizenry of our country. Most were and are started by middle class folks like you [I’m supposing] and me. I think that an individual who runs a business as the CEO is justified in receiving any amount a board cares to pay him. If it’s too much, and I don’t like it, I can start a competition drive for that company’s product by creating another company like his. Truth is that folks who make high wages like you suggested in your statement would most likely make lots of income in whatever they attempt. I do believe that because of that, the jobs created nationally over our nation’s history have made the US the best producing nation ever. Another truth is that the folks who start businesses and see them grow would simply not go through the trouble it takes to run those businesses… Read more »

Your worth to the company dictates your pay, not what you dictate. $15 / hr doesn’t make a better employee, just a higher paid one. Employers aren’t looking to give money away to unskilled, uneducated, laborers. Ask Seattle how the $15 / hr is killing their jobs and forcing restaurant closings. Many of those who were on government assistance before the pay raises found that they no longer qualified for that assistance, so they asked for fewer hours from their employers so they could still get them. Unmerited pay will result in laborers who feel entitled to rather than grateful for their pay.

Don’t count on a return to sobriety Ron. Those old time American values have gone by the wayside with the introduction of Reaganomics unencumbered by any moral values or considerations, but strictly based on greed. (That’s what the Ron said when he delivered the economic package- to limited Christian, religious, or beneficial charitable donations for tax reductions. (You should make those donations (since our taxes won’t fully support welfare) AND pay full taxes too.))

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.

The problem with “Socialism”
Is that the collective “Ownership”‘is an illusion that usually wonds up getting people Killed in the end

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.

The type of government that jams communist theory down its peoples throat is one party socialism. Think it can’t happen here? It already has, for a short period of time, the Democrat party had a veto proof control of our country. When others tried to rein in some of the gross spending, they shut down the monuments and federal parks. It was punishment.

And who do you think elected all those representatives that make up congress? The people of the United States. We have the power to decide who runs our government. But it takes effort and motivation to become a truly informed person, and then to VOTE. Voter turnout is deplorable most of the time. If everyone took their responsibilities seriously for determining the course of our country, they would make it a priority to learn about the issues, the candidates, and to do everything possible to increase the voter turnout for elections. If we lose control of our government, it is because we have given it up by our apathy and indifference.

I think that is because most Americans feel that the government does not represent them any more, and that congressmen and congresswomen are a secret club and have no clue what is going on outside of that big domed building.

Corky, your words should be the Quote of the Week. You have put the truth into a nutshell.

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

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.

OMG thats awful !! what a horrible policy !!

Yup, but just another sort of Socialism at work.

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 time and effort put in by someone who has applied themselves to do better. Combine that with ever increasing cost of living and it is an up hill battle. Tip sharing is B.S.. You worked for it, it is yours, you should be allowed to keep it. But, all too… Read more »
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 a sudden businesses were forced to hire employees based on “skin color” as opposed to performance requirements. How can it possibly be good for a business to hire an “average” worker based on their “skin color” as opposed to the best qualified person? … My whole life was impacted by… Read more »
Now add in such lexicons of socialism / communism to the typical hiring process, that include such benign sounding and politically correct terms such as ” workplace diversity”, so-called “social justice” and “economic fairness”, and you have a recipe for economic stagnation and an uncompetitive business climate on a national scale. As these socialistic “values” become embedded as mandates, through federal, state and local regulatory changes in the evaluation process for all new hires, lest the businesses risk lawsuits from any number of fronts businesses will become increasingly gun shy to add staff for fear of adding less productive employees than their competitors, both domestic and international, may have to their payroll and then having to “carry” that individual for fear of lawsuits down the road. Thus you end up with the high levels of chronic unemployment and under-employment that so many of our European counterparts experience. The internal promotion… Read more »

I am convinced that Hiliary will win the Presidency simply because she will get the Black vote, 40 to 50% or more of the Hispanic vote, and those women who will vote for her just because she is a woman. I am afraid the number of Americans who are waking up will not be enough to overcome the rest. I hope that I am wrong on this issue and would be glad to eat an entire humble pie if it happens.

Wayne, Hitlery is more likely to end up in the big house than the White house due to a series of convictable crimes. That is, if anyone can be found to pursue the “rule of law” we hear so much about. Crony Capitalism (aka. crypto monopoly capitalism) rules here today. She has her ultra-left agenda loyalty hand in hand with being bought and paid for by big Ag, the pharmaceutical mafia, big business who want an effective monopoly in their respective industries without appearing to be monopolies. If She makes it back to the White House, it will be due to vote fraud. Forget about illegal aliens, dead people, multiple votes from the same person, etc. That was the vote fraud of 1970’s. Today the votes are counted in secret by computer, no accountability, no verification. Sequoia, DS&S, are companies that make these systems. If you think the software counting… Read more »

Won’t see the “Big House”, remember ” Presidential Pardon”…
” She-it ” knows where most ( if not all ) of the skeleton’s are buried
Of course, WE – wouldn’t see the payment exchange hands, but it will happen……

I pray you are wrong.


Double Dittos…….

The “47%” Mitt talked about …..

Utopia….Dystopia. How fine a line is it?

Stay on top of the most freedom forever that what American is for!!!!!!!!!!

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 always wrong mindedness!!

Who came up with the description “RED” for states that vote for Democrats and “BLUE” for states that vote Republican? A “RED” is a COMMUNIST! The Democrat Party is verging on COMMUNIST!!!

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.

I agree with you, Dave. Being a senior citizen and hearing the threat of our social security disappearing, I get angry that there always seems to be money for welfare and immigrants. I worked for over 56 years and thank God I married a man with a decent pension or I could not make it on my social security alone. Not only reform welfare, reform the way our leaders think.

if you are here reading this website-YOU are the low information voter

Gee, Thomas… You seem to be reading this website. Does that make YOU a low information voter?

Thomas, your comment is typical of liberal trolls. You can’t think of an intelligent reply, so you make a puerile taunt. Like all liberal trolls you present the image of an automaton. An automaton shows no intelligence and asks no questions of his masters.

Of course you could shock me by writing something that is rational. If you even reply, it will probably be something like “You’re a great big meany and I’m going right home to tell my mother about you!” And your mother will probably say “There, there, Thomas, go to your place in the basement and read some of your favorite comic books.”

Why are you here? A low information voter perhaps?

There is no difference between Socialism and Communism. Socialism is achieved by vote. Communism is achieved by force. It’s the difference between suicide and murder. The moochers elect the looters to steal from the producers. Both of these quotes are from Ayn Rand. She immigrated to this country as a teen from Russia. I’d say she knew what she was talking about as she is someone who actually lived in these types of government and experienced the results.

Capitalism, socialism, and communism are economic systems, not forms of government. Voting republics and democracies most often choose either capitalism or socialism.
Autocratic forms of government (Dictatorships) believe everything is theirs, hence a commune[istic] form of an economy.
All economic forms which are of communism are in countries that are controlled by a dictator.

like you ?

Thomas that makes no sense. If I am reading this website it is because I want information, so how does that make me a low information voter. And since you commented on this website does that make you a low information voter?

That snarky remark accomplished the opposite of what you must have intended.

Can’t believe you are so stupid as to make that comment!!!

Learn to use proper words to communicate your message – the proper word is remunerate nut “remunerate.”

Learn to use proper words to communicate your message – the proper word is “not” not “nut.” Those who live in glass houses….

For the life of me I can’t tell the difference between remunerate and “remunerate” other then the quotation marks.

That’s what I saw too,Lol!


And US capitalism is working fine, despite 8 year recession, increase in the population of hungry and homeless, increased population with burdensome debt, a number of bankrupt cities and counties, 19 trillion deficit, have and have-not margins widening, and a depressed under-employed workforce…. What does China’s capitalism have that we don’t- more vital, ambitious workers?

I crossed 90 miles of shark infested, hurricane ridden ocean at night on a raft i made out of other people’s trash to escape free market capitalism said no one ever.

The place that has common riots due to poor labor rates, horrible working conditioins and millions of people that work 60 hours a week to have a standard of living thats considered below our poverty line here?

Yeah, good job dumbass. Maybe try researching the countries before claiming theyre the perfect model of societal bliss.