A professor of a pre-law class on political ideologies at Columbia University had only one grade on the entire course, the final exam. One particular year he returned the graded exams in the last class with these comments, “Class, this is really unusual this year. Exactly half the class got a score of 95, an excellent grade. The other half earned a 55, a failing grade. But since most of you believe that capitalism is unfair, I am going to take 20 points from those with 96 and give it to all those who have a 55. As a result the entire class will pass with a Fair grade of C.”
“No!” protested the better students, “You can’t do that. We can’t get into law school with a C.”
“Shut up!” He replied, “That’s the way they do things in the ‘dictatorship of the Proletariat’. They take from those “according to their ability” to give to those “according to their need.” He continued, “Now let me ask you. Those of you who earned a 95 but received a 55, are you going to work as hard in my classes in the future?”
“Are you kidding? We’ll never take your course again.” He continued, “Those of you who earned a 55 but got a 75, are you going to work harder in the future?” “We’ll try,” was their sheepish response. “You see,” the professor drove home his point, “any economic system that doesn’t realize the prime human value of self interest is doomed to fail.”
The entire Communist bloc collapsed when it became clear after 70 years that the citizens’ basic needs would never be met, while the politicians and party officials enjoyed a lifestyle beyond that the masses.” Compare the living standards and opportunities in the countries around the world and see the difference this one basic difference makes.
Whether it goes back to an act of primal rebellion in that ancient Garden in Eden or whether it’s a vestige of the struggle for survival from prehistoric times, it is clear. Every human motive is driven by self interest. Everyone is tuned in WIII-FM, “What’s In It For Me?” John Calvin said of human nature that man is non posse non pecare , “Not able not to seek his selfish interest.” We all know this as the Profit Motive. What gets rewarded gets done. For this reason people of all kinds work long and hard to excel as students, salesmen, athletes and inventors, “building a better mousetrap so the world will beat a path to their door. All of the society advances with their efforts. Conversely, when an economy fails to reward desired efforts and underwrites indolence with entitlements, in time the economy will decline in productivity.
Key to this whole understanding is the right to hold private property and to earn more, and to enter into transactions to better your situation through exchanging your property or currency for some thing from another in a free market. By the way, how did they use to count your wealth? By how many “head” of livestock you had? What is the Latin word for “head”? It’s capus, capitas, from which we get the word “Capitalism.” There you have it in three concepts: Profit Motive, Private Property, and Free Enterprise.