Sharing Restaurant Tips and Socialism (EP.274)

To allow each of us to succeed at the highest level possible, we must support capitalism, capitalism with the government controls needed to ensure fairness.
To allow each of us to succeed, support capitalism with needed controls.

Introduction

Employees of two downtown Colorado Springs restaurants recently protested tip sharing, the required dispersal of their tips among the whole staff. 

Both restaurants display liberal political signs, and have invited liberal groups to hold events at those restaurants. Not surprising in that the city itself is liberal. My money says that a good number of the employees who are protesting to keep their tips to themselves are in full support of the Democratic Socialist agenda which includes Medicare For All and free college.  

That is the subject of today’s 10-minute episode. 

Continuing

Stories can paint pictures and make points in memorable ways; this story is a case in point. Here we have a tourist from America, travelling in an Eastern European socialist country engaged in a conversation with a local. They are involved in a discussion about socialism, with the European touting how devoted he is to the concept. The American asks, “So, if you had 1,000 horses, you’d give away 500?”

“Of course,” was the reply.

“And if you had 500 sheep, you’d give away 250?”

“Absolutely.”

Impressed, the American had one more question before moving on. “And if you had two goats, you’d give away one?”

“No!” said the self-avowed socialist with some emphasis.

“Why not? What’s the difference?

“I got two goats,” was the reply, ending the conversation.

It is so very much easier to promote sharing someone else’s money and other things than to share your own. Just ask the restaurant workers. Here is a familiar and pertinent piece of wisdom, “The trouble with Socialism is that eventually you run out of other people’s money.” -Margaret Thatcher, British Prime Minister, 1979-1990. 

Before we go on, I have nothing against sharing tips in bars and restaurants. Voluntary sharing, that is. Cocktail wait staff “tip out” (share tips) with bartenders, and food wait staff often share their tips with bussers and kitchen staff. They do this to incentivise and reward the people they depend on to provide good service to their customers, resulting in return customers and good tips. I am with today’s protesters in being against forced tip sharing.

  1. “Hey Will, with all that is going on, COVID, anger against the police, the election, etc., why are you talking about tips and socialism?” A. Socialism is on the ballot. And caring for each other and our successes as individuals and a society demands that we look carefully at this issue.

Many of us don’t have the foggiest idea what the term socialism means. Let’s look at some useful economic system definitions:

  • Democratic Socialism: Most people who use this term are not talking about the traditional definition of socialism where the government owns the means of production. What they mean, or think they mean, is aggressive income and wealth redistribution vehicles like free healthcare, free college and free daycare–just for starters. They are not talking about the government owning and/or controlling entities like Ford and Facebook. Not yet, anyway. However, Senator Sanders, Representative Ocasio-Cortez and others are in favor of government ownership in many cases. Healthcare is an obvious example. And they will take Biden with them almost immediately should he win.
  • Traditional Socialism. See above, democratic socialism, with the addition of the government owning entities like Ford, Facebook and most everything else of size. You can keep your ice cream store if you have one. See Venezuela, Cuba and others as examples.
  • Communism: Traditional socialism with the addition of prohibiting any private property. 
  • Capitalism: A system wherein people, individuals or groups, including corporations, own the means of production and engage in voluntary exchanges of money for goods and services.
  • Profit: Selling things, taking in income, for more than it costs to make them, drives everything; capitalism, democratic socialism, traditional socialism, communism, no matter what the system is. Here we are not talking about taxes or what you do with taxes; we are talking about how you make the money and wealth that is taxed in the first place. You have to create wealth before you can redistribute it. That is done through generating profits. The gozindas have to exceed the gozoutas or nothing works in any system.

Now for some example countries:

  • Denmark. Denmark is often used as an example of democratic socialism. But Denmark disagrees; their model is capitalism with heavy income redistribution. After seeing his country held up as an example in the 2016 US Democratic presidential debate, Danish Prime Minister Lars Løkke Rasmussen used an address at Harvard to explain the Nordic model to a US audience suddenly very interested in Denmark. “I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”
  • Cuba. Socialist/Communist dictatorship. Complete mess. The Castros have used their dictatorial powers in a way that many people are still driving some of the same cars that were on the island after the 1959 revolution.
  • Venezuela. See above, but far worse. And who knew that was even possible?
  • WWII Germany. The Nazis, despite the name National Socialist German Workers’ Party were not socialists; they were an evil cult, preaching the superiority of certain genetic types, which gave them the right–the obligation–to eliminate other types and groups of humans.
  • USSR. The former Soviet Union. Communist by self-identification. Here are a couple vignettes that sum up the economic disaster that communism was in the USSR. When a worker was interviewed about this job, his summary was, “We pretend to work, and they pretend to pay us”. Here is another one; a shopper had stood in line for over an hour in the local government grocery store before he finally made it to the counter to purchase his meat entree for that night’s dinner. “I’m sorry, sir, but this is the counter where we have no fish. Over there is the counter where we have no meat.”

Let’s do a mutual goal check. I am assuming that we, men and women of goodwill, are all looking for an economic system that best rewards talent and hard work, while taking care of those who truly need it. Do you agree? Yes or no, please share your thoughts in the comments.

Here are three key observations:

  1. Capitalism is the greatest wealth-producing engine the world has ever seen. Some may doubt its fairness, but no one doubts its ability to create wealth on a massive scale. More on fairness later.
  2. All societies redistribute wealth. All of them. If all a particular society did was to tax enough to provide roads, some would pay more for those roads than others. Most people are likely to use the roads disproportionately to their tax contribution. Some more, some less; that’s an example of redistribution. The question is not whether to redistribute wealth, but what is the proper level of redistribution.
  3. Leading communist countries, including Russia, China and Vietnam, have all finally allowed free market practices to exist legally. Out of necessity. Communism has simply not worked anywhere. And never will. Those countries need free market profits to support their economies and to keep their one-party leaders in power.

Today’s Key Point: To the extent that we want a system that allows each of us to succeed at the highest level possible, we must support capitalism, capitalism with the government controls needed to ensure fairness. Laissez-faire capitalism created enormous wealth, but without the needed fairness it created more problems than it solved. Socialism, with its lure of creating an illusion of fairness by making things free, is initially appealing in a seductive, feel-good way. But the initial feel-good crumbles in the face of inevitable economic failure. Capitalism, like life itself, requires hard work over time to succeed. And succeed it will for everyone. And therein lies the joy of success; success for ourselves, and, even more so, success in helping others to succeed.

Tell me what you believe. I and many others want to know. 

As always, whatever you do, do it in love. Without love, anything we do is empty.

Contact

As we get ready to wrap up, please do respond in the episodes with comments or questions about this episode or anything that comes to mind, or connect with me on Twitter, @willluden, Facebook, facebook.com/will.luden, and LinkedIn, www.linkedin.com/in/willluden/. And you can subscribe on your favorite device through Apple, or Stitcher, or any place where you enjoy your podcasts.

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Will Luden, coming to you from 7,200’ in Colorado Springs.

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2 Responses

  1. Charles Cabral Reply

    I have already voted, for neither of the major party presidential candidates, but at this point I believe that Biden presents less of a clear and present danger to America than The Twit. I don’t think it is possible to implement any significant form of socialism in our country today. One thing I see is that the “social democrats” have largely walked away from Biden/Harris. They may vote for them, but I suspect that their influence post-election will be marginal.
    The left long ago gave up trying to enact their agenda through the court system. That is why they are weeping and gnashing their teeth over the ACB nomination and have been trying to “Bork” every Republican judicial nominee since the Reagan administration.
    The problem as I see it is the assumption that every social and economic problem in the country must be solved by the national government. Since the federal government is the only entity with the ability to print money, state and local officials, rather than leveling with their constituents on the real cost of services and programs, look for federal handouts (which always come with federal rules), and the national politicos gladly take on the increase in power.
    Since we have raised a couple of generations of entitled folks who pay extra for holes in their jeans instead of working for them, I don’t see things getting better soon.
    The Twit blew the opportunity to lead the country out of the pandemic into a new paradigm of patriotic values balanced with individual freedom. The horse is out of the barn.

    • Will Luden Reply

      Charlie, I hope that you’re right about socialism. My fear is that if the Dems run the table next month, we will quickly see fair imitation of it right here. Cheers, Will

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