Why Capitalism Sucks: Part 1 – The Scenario & My Experience

(NOTE: I didn't mean for so many of my articles here to have the word "suck" in the title! But it just happened that two of them, written at completely different times, needed to be divided into multiple parts. Anyway, here we go...)

The issue here is not really capitalism as a whole, it is basically the unfair pay scaling. Entrepreneurship, hard work in order to research, come up with ideas, plan, innovate, invest, sweat and see them come to fruition is awesome, and we would never want to discourage that. But we also have to ask ourselves if making money/mammon the reason or necessity or reward for doing them is really best, and if it’s fair to pay everyone else who makes those dreams come true less.

(NOTE: Helping or taking care of people who don’t or can’t work, is a different discussion not addressed here. But often, helping others helps us, even from a practical or strictly selfish standpoint.)

THE SCENARIO

“The chair of fair scenario”

If you and i agree to make a chair to sell, and we both work equally hard on it, and we sell it for $100, then we each get $50, right? We each did half the work so we each get half the profit, because we earned it. You earned $50 and i earned $50. $50 belongs to me, and $50 belongs to you. What the heck would make me think i deserve $75 and you $25? You'd think i was crazy, right?

If I got more than my fair share from the chair which we worked equally hard on, it would be because maybe i designed it, while you built it, so there are fewer people like me, my skills are "in demand" so i can negotiate higher with other companies, you'd have to give me $75 to “keep me.” And if you get less from the profits of the chair it’s because your skills are more common, so companies can negotiate you down - i can find plenty of people who’ll do it for less. The pay is only determined by how many people have those respective skills.
It has nothing to do with how hard we worked.

Taxing:
If i keep $75 of the $100 profit then i have stolen $25 from you.  And it's cowardly for me to hide behind the "system" as an excuse for my thievery. But since i stole $25 from you first - a fair tax would take the excess back from me and return it directly to you. A 33% flat tax rate for me and 0% for you would be fair.

But if pay was actually fair, we could get rid of most if not all graduated taxes, because everyone could actually be equally responsible for themselves (although there are other issues). Also the schools, health care system and such would be more equal and fair because people could compete equally for them, and probably result in less poverty, crime, disease and other outcomes, and less of a burden on everyone!!!  Kumbaya…

 

Foreword: How I Got Started On This

I had already become aware of systemic and unfair income disparity, but my passion for this really jumped when i got a promotion. I had been working as a Clerk, but i got promoted to Analyst. So the first day of the new job, i came into work just like i always had, and so did my previous co-workers. We all came in, did our jobs and left each day; it’s just that my new job was different. It didn’t seem fair that i was now getting more just because i was “smarter” (maybe) or “able to understand complexities” or “knew someone” or whatever (the reason doesn’t matter). It is wrong to assign me a higher value as a human being than my previous co-workers, just because my brain is different and/or my skills are rarer.

This doesn’t change if it was my ambition that got me there – if my co-workers prefer to be clerks, so what? That still doesn’t give me the right to take more $ than them, if they’re working as hard. Maybe they’re better at being clerks than me. In fact i did do a lot of extra work to show that i could do the new job, working late, even sometimes all night, for several months. It would have probably been fair to pay me for the extra hours i put in, but i did it for myself because i wanted a “better” job (meaning it fit me better and was more interesting. And, the extra work wasn’t necessarily sanctioned. ☺)

Even if it was my hard work that got me the job it still doesn’t give me the right to take more than my previous co-workers when we are all still working. They were working hard the whole time too. Yes my new job was more complex, and yes there was some added stress of working with “higher-ups,” but nothing was ever more infuriating, frustrating and difficult than wrestling with that damn copy machine, as a clerk. It kept breaking down and we had to remember where we were in a jumble of one or two-sided, stapled or non-stapled, 3-hole punched or not sections of massive reports. I have also picked strawberries on a farm in the past, which is much harder work than both of these jobs. It is simpler, and more people are “qualified” to do it, but it is harder work.

It is also true that it’s not fair to pay a lazy clerk who only gives 80% of the effort as the other clerks, the same pay as them.
It’s also not fair to pay a lazy analyst, more than a hard-working clerk.
It is also true that hard work doesn’t necessarily result in productivity, as some people are just better at, more effective at, their job.
If someone is not good at a job, they probably shouldn’t have it. Hire the best people, and monitor their productivity through performance reviews (that’s already done now), bonuses and incentives. There may also be nothing wrong with paying people more who have put in more time, on an increasing scale.

Let me make it clear there is no way to fix everyone’s income at the exact same level; because we can’t and wouldn’t want to prevent people from working on the side, on music, crafts, writing, buying and selling stuff, etc. Companies still hire the best people, some go out of business, etc. But it should be our goal to work towards that direction, because it is right. When we fall short, we should ask how can we fix it.

It is also true that i couldn’t do my job without the clerks. Or the people who made, sold and transported my computer, chair, desk, pens, stapler and anything else i use to do my job. The people who made those things made it possible for me to get my income, so, some of my income belongs to them, because they did work to make it possible. Supposedly, they get paid for it, but at what rate? The rate of pay is decided by how many people are available and have the skill to do those jobs. (There is actually a second factor that determines how much the work is “worth,” for example it takes a lot of research to find cures for diseases and the return is relatively small, so even if researchers are highly qualified with rare skills, it doesn’t assure they’re paid more.)

I actually tried to figure out how i could take the extra money i was now making and redistribute it to my previous co-workers. But that would have required knowing their wages, and there is no way the system would have let me, they would have thought me crazy, so i would have had to do it on the side (and they still would have thought i was crazy). Plus i would have had to give some of it to everyone else in the company that made my job possible who was working at a lower rate. So, i accept a progressive, graduated tax system to help pick up the slack, but it is a sloppy, macro solution to an intricate problem. More on taxation later.

If we want people to get “ahead” through hard work, then it is hard work that has to be rewarded. Then i also wonder, why would i want to be “ahead” of anyone? I just want to do what i was born to do, what i’m best at, to grow and learn new things and get better at them, reach my full potential, and live a happy productive life. And generally so does everyone else.

Anyway, on to the meat...

Up Next: Part 2 - Definitions: Communism & Socialism