An interesting dialogue with several SHTF Plan readers and contributors took place in response to the article Job Creation: The Spy Behind Enemy Lines.

The original discussion began with commentor shogunole. We suggest to our readers that they start at the origin of the dialogue with the first comment and then return for the follow-up below.

Here is an excerpt from user shogunole discussing individual rights and how they relate to the community structure:

“I too believe in individual liberty and property rights, but we as human beings do not live and die as solitary creatures.  We live and die as a community.  I am not speaking of communism either.  What I mean by this is that we survive by helping each other out because we are ultimately dependent on one another.  Health care is just one problem that can only be solved using a systemic solution.  It may mean that you may have to sacrifice for me or I may have to sacrifice for you, but in the end we both benefit.  In ” technical” terms, a bunch of all-stars does not a championship team make(see 2004 US Olympic Basketball team for a good example). “

“By the way life is one of those inalienable rights isn’t it?  Last I knew, we need health,  food, clothing and water in order to live.  We can do better than standing idly by while people are suffering and chalking it up to the law of the jungle.”

Response – The Island:

To be quite honest, this conversation should be taking a back seat in Washington right now anyway…

Two things should happen before we (i.e., the people of the United States) even talk about substantive issues:

1.  Get rid of the corruption in government – on BOTH sides of the aisle.
2.  Stop spending like drunken idiots (BOTH sides of the aisle) and balance the budget.

That being said, you said that you agree with individual liberty and property rights.  Well, I’m not sure you really do…

First, I agree that a “systemic solution” to health care is needed and I am fully in favor of some sort of health care reform (e.g., allowing policies to be purchased acrossed state lines), but having a “right” to the work, money, or property of another person is some form of communism, or socialism, which depending on who you ask, are just different degrees of the same thing – taking from one person, and giving it to another.  It makes no difference if you are talking about health care or wealth in general.

OK, so what exactly is it that I think is wrong with such a system?

Well, an attempt at such a system is ignoring the reality of human nature.  Period.  I wish that wasn’t the case, but that’s just the way it is.

In a comment I wrote to a different entry earlier this year, I provided a hypothetical example that I friend of mine thought of a few years ago:
– – – –
“The Island”

Say ten people are stranded on an island, and they know that they are going to be stuck there for quite some time.  So, they try to start their own little civilization.  They divide the work that has to be done to survive into say ten categories or jobs:  gathering food/hunting, building shelter, making clothes, etc., etc.

What happens if at some point one or more of the people are not able to perform, or “underperform,” their task…for whatever reason (physical impairment, laziness, etc.)?  Well, if it’s really only 10 people, and say they are friends/family, sure, the other people might pitch in extra to help the “underperformers” get by…

BUT what if the group is 100 people who didn’t know each other at all before being stranded? or 1000 people?

Most/many of the people MAY be willing to take up the slack for a FEW of the “underperformers.”  However, this situation quickly snowballs in two ways.

First, as the “underperformers” are “given” what they need, with little or nothing in return, SOME people will realize that there is little or no need for them to work as hard, if at all, because other people will pick up the slack.  So, the “underperformers” have no incentive to improve their performance, and from this you might even see the number of “underperformers” mysteriously increase.

Second (and similar to the first), as the “performers” see an increasing portion of their work product going to more and more “underperformers,” at some point, they are going to refuse to have their work product go to the “underperformers” and/or they will work less (or not at all).  Why?  Simple – their incentive to remain “performers” is being increasingly diminished.  Thus, they too become “underperformers.”

NOTE that I am NOT saying all people on some sort of welfare are lazy or something.

What I am saying is that such a system is doomed for failure.  In the long run, MOST people will only work when they are rewarded for it and the amount of work product they produce is somewhat proportional to the amount of reward they receive.

Likewise, those who are provided for by others will not work because there is no need for them to work.

I realize my example is quite simplified…and I know what I’m saying sounds cruel…but that’s just the way it is.  It is human nature.

– – – –

In all sincerity, feel free to tell me in what way(s) you think the above example is off base.

Please note that I don’t think that the “snowball” effect I describe above happens overnight…it might take years.  However, it is inevitable.

(Also note that I am not necessarily saying that we (the United States) are at the point where we have completely lost our incentive to be productive – BUT we are definitely riding that slipperly slope…)

With that example in mind, I’m not opposed to a BASIC, EMERGENCY social net…even though, technically, that contradicts what I wrote above.  However, that social net should be an ABSOLUTE last resort.  Support should come from family and friends LONG before the government gets involved.

Second, regarding your comment:

“In “technical” terms, a bunch of all-stars does not a championship team make (see 2004 US Olympic Basketball team for a good example).”

In light of the progress capitalism has shown the world, I’m not even sure exactly how to respond, as I’m not sure what you mean exactly.  I think you are suggesting that the individual’s pursuit for “greatness” is not the best way to advance our society.  Is that what you are saying?

If so, let’s consider one common, everyday group of products that has drastically changed the world over the last thirty years: computers.

Do you honestly believe that without the competition among “individuals” to become “all-stars” we would have had all of the advances in the computing industry that we’ve seen over the last couple of decades?

…and I’m not just talking about playing Doom.

The benefits that every single person in this country (really the entire world) has received from the advances in computers are countless.  Automobiles, health care, personal computers, TVs, appliances, national defense, cell phones – the performance of the various products in all of these categories has been drastically improved while the relative cost-for-performance ratio has fallen.  These benefits have been received and enjoyed by EVERYONE…and that argument can even be extended to homeless people.  Yes, I mean it.

…all just because some selfish people were trying to make a lot of money…for themselves…as individuals.

That drive – to become an “all-star” – and the competition that arises from it do in fact benefit the “community,” as people are pushed to make better and better products at competitive prices.

Third, I agree that life IS an inalienable right.

HOWEVER, that right only extends so far.  As an example, take me.  I am 33 years old.  I have an undergrad degree in physics and a law degree.  I’m about 6 feet tall, weigh about 180 lbs, and work out 5 times a week.  I am clearly capable of being a productive member of society – and I’d like to think I am…most of the time (note that I don’t chase ambulances or anything – I write patents).

…but what if one day I decided that I am never going to work again.  I just don’t feel like it anymore.  Sure, I’d lose my house eventually…and my car…default on my students loans…and eventually be homeless.

Well, do I have an ABSOLUTE RIGHT to life?  Should I still be housed, fed, and clothed from the efforts of other people, even though I have actively decided to be a bum? (see “The Island” above)

I know what you are going to say – “Rick, you shouldn’t do that.  If you are capable of working, you should.” (BTW, I agree – I should not do that…and never will.)

HOWEVER, we are now just a hop, skip, and jump away from “from each according to his ability; to each according to his need,” aren’t we?

So, in the end, is life REALLY an INALIENABLE right in THAT sense?

Let me rephrase that so I don’t sound like such an anarchist – Is life an INALIENABLE right to that extent that you have a RIGHT to others’ work and property?  By RIGHT, I mean should other’s work and property be “forcibly” TAKEN from them, regardless of the circumstances?

Perhaps the Founding Fathers didn’t mean that.  Maybe they only meant that you have an inalienable right NOT to have your life taken from you by the OVERT acts of others (e.g., murder, etc.).  More specifically, perhaps the word “inalienable” was not meant to imply “without bounds.”  Maybe it simply refers to the idea that such a right can not be taken away.

Fourth, regarding your comment:

“We can do better than standing idly by while people are suffering and chalking it up to the law of the jungle.”

I agree with you here too.  Well, at least I think it sounds nice.  The problem is that when people are FORCED to do more than stand idly by, things spiral out of control.  At some point, it boils down to taking from some and giving to others (back to “The Island”).  Eventually, the number of those receiving will increase, and the number of those giving will decrease – both due to lack of incentive.

Next, regarding your comment:

“Trickle down economics does not work.  Shareholder dividends get put in shareholders pockets.  They don’t get spent.”

I agree with you in that not all shareholder dividends get spent.

However, they don’t get stuffed in mattresses either.  They get invested in businesses or put in banks (where they are often invested).

How exactly do you think companies get started?  Does the Money Fairy give Joe the Plumber $100,000 so he can start his new plumbing company…which CREATES JOBS?

(Don’t get me wrong, I fully understand that the “financial” industry helped get us into this current mess…and then some…I have no problem with regulations that prevent institutions from doing insane things like getting leveraged 80:1).

Finally, regarding outsourcing – I agree we’ve got a problem there…

…and that problem is obviously that businesses do not have enough incentive to keep those jobs here in the states.

How exactly do you think we should fix that?  Raise taxes?  Unionize every single industry in the country in order to raise salaries and benefits?

Sorry to be a smart alec, I just don’t know see how your comments above relate to a solution for this.

Overall, everything you said sounds great.  It would be great if everyone, both in this country and others, could have a house, a car, free health care, etc.  And perhaps one day, we’ll have the ability to do that.  Maybe someone will invent/discover an infinite source of energy…and some sort of gizmo that can create everything people need out of thin air (like in Star Trek or something).  After some period of time, such technology may become so inexpensive that everyone in the world could enjoy the benefits of it.

However, we have to ask ourselves this question – “What is the fastest and most efficient way to get our society to that point?”