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The intention of this article is not discussion about Wal-Mart or the law passed in the Maryland legislature but the idea and the motive force behind them. Even though this small article would be totally inefficient, I would like to touch upon them due to their sheer importance. Two conflicting ideas have been at loggerheads since the dawn of civilization in one form or other. Simply speaking, it has been the conflict of individualism and collectivism.
At its essence, capitalism has been about man as an end in himself – about man working for self-interest, trading by mutual consent, and each man gaining according to his ability. By contrast, socialism is about man for his neighbor, where self-interest is considered evil, and consequently each man gaining according to his need. It is true no matter by what name you choose to call it – Marxism, Leninism, Maoism, Communism, etc. They might differ in their implementation, but the core theory is the same.
It's been said that socialism is about “From each man according to his ability, to each man according to his need”. It can be safely stated that Capitalism is about “From each man according to his need, to each man according to his ability.” Need in this definition being defined as what a person takes, and ability as what a person produces.
The end result of both systems is apparent every single day – not only in monetary measures, but also in the application of basic human liberty. The United States, the most capitalist country in the world, consistently remains a superpower. The Soviet Union? Broke with a trail of more than 30 million dead due to hunger and purges. Almost the same number died in Mao's China. The USSR had to build the Berlin Wall to prevent its people from escaping outside. Meanwhile, the United States has to make immigration laws to put a limit on people trying to enter its boundaries.
Some socialists admit the tyranny of countries like the USSR or China, but they are careful to blame the atrocities to Stalin or Mao, themselves… not the system. In reality, the flaws of their socialist systems were not due to personalities or the way they were implemented. The flaw is inherent in the Socialism itself; that is
The problem with the idea of “from each man according to his ability, to each man to his need” is that the ability is not valued and need is placed above the ability for distribution of wealth. Here, the need, not the ability is rewarded! There are few advancements and innovations – the hallmarks of human progress – will be absent from such a society, because the needs of the citizens are provided by government, not by other men. The person of ability, he who creates new ideas, is unwanted because he might offer something that is more efficient and of better quality than the government is able to provide… and he just might want just compensation for providing that what people desire. Thus, everyone in such a society will have no incentive to work. Is it any surprise that needs and wants people living under socialism constantly go unfulfilled?
The intention of socialism is the redistribution of wealth in a “just” way. But there is never a thought that their concept of distribution kills the incentive to produce. What if only the need is valued and determined by a select few, what are the standards set to determine what the needs of any given individual are? And who produces? In a prosperous society, it is not the laborers or workers, but people with ideas and initiative who are important. What will socialists distribute if there are no producers?
A classic example of this would be a disastrous policy that China followed under Mao. Chinese leaders decided that it would be beneficial for China as a whole to increase their steel output and thus they ordered small steel furnaces to be made in the villages. They ordered farmers to work on them instead of growing crops. Except that no one cared to know that high quality steel cannot be produced in small steel furnaces. As a result they produced sub quality iron no country cared to buy and there was no food grown – leading to hunger death of approximately 10 million workers and farmers. The distributors were here… so were workers and farmers, but not the producers (or the exploiters in words of Socialists). But no one was responsible and no one cared. It is the producer, which gives value to the work of those working under him. In this instance however, there was no value addition for the error in method of producing steel but no one at the top cared for no one was responsible.
Another contrasting example would be of Wal-Mart. It was opened by Sam Walton with an idea of giving good quality products at cheapest rate possible by reducing transportation cost and wages. It is not the labor produced by the workers or people under him but his innovative approach, which saved U.S. consumers thousands of dollars and made Walton a billionaire.
We hear workers of Wal-Mart (one can see it on wakeupwalmart.com) saying how they are being exploited for a variety of reasons (low wage, long working hours, NO health insurance, etc). However, it's very difficult for exploitation to happen if they are working there of their own choice. No one stops them from leaving this job and going somewhere else. Their refusal to do so clearly shows that it is the best option they have. Notice the contradiction here; if there was no Wal-mart, they would have been out of work or employed at the second best option. How hypocritical that they call “exploiters” those who have given them their best option!
Outside of an economic education, there is little hope of showing those who criticize Wal-Mart that it is a better method of wealth distribution than their socialist unionesque alternatives. Since that option is not very realistic, I suppose the only way they'll learn is to over-regulate Wal-Mart to the point that it has to raise prices, decrease the number of stores it opens, as well as the number of people it employs.
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