Capitalism, Socialism, and Morality

You may know, perhaps from personal experience, that if you put a bumper sticker on your car that reveals or even suggests that you are a conservative your car may be keyed.  Liberal bumper stickers don’t elicit keying.  Conservatives, as a general rule, just don’t think that criminal property destruction is a way to deal with liberals.  We just think they are wrong, even misguided.  We don’t hate them. They hate us, though. Fiercely.  Enough to cause us thousands of dollars of damage just to make the point that they disagree with our bumper sticker.

Then they preach endlessly on tolerance.

A new report, in The Economist of all places, finds that the more people are exposed to socialism, the worse they behave.  Germany would seem a perfect laboratory for an experiment with half of its people living under Soviet-style Communism for over 40 years.  The other half lived the same period under capitalism, or at least an economic model as close to capitalism as Europe could manage.  Pure free market capitalism existed in the 20th Century only in British Hong Kong.  It exists in its pure form nowhere today, having been largely displaced by crony capitalism which is a polite term for fascism.

The authors of the study reported in the Economist are researchers from the University of Munich and Duke University in the U.S.  They conducted an experiment on 250 Berliners in which their honesty in self reporting their scores in a game in which they could win some money was tested.  They were asked to roll a die 40 times and self report their score after each roll.  Each participant was to be paid up to €6 ($8), based upon their overall score.  The higher the score, the higher the payoff.  They were allowed to take either the top or bottom number on a roll of the die.  Thus, if after a roll the top number is 2, the bottom number will be 5, or vice versa.  Before each roll they were to commit to whether they would count the top or bottom number as the score on that roll.

Their choice of either top or bottom number in advance of each roll was the honesty test because they were not required to tell anyone which they had chosen. Thus, a opportunity to cheat without detection was introduced into the experiment.  Since a higher overall score meant higher winnings, the experiment tested their willingness to lie for personal gain.

Assuming this group of Berliners included participants who where old enough to have lived either in the capitalist half of Germany or the Communist half, this might be called an experiment that tested the relative sense of morality one would develop living under each system.  It might provide some sort of answer to the perennial question which system inculcates morality the best, the socialist system of sharing the wealth or the capitalist system of every dog for himself.  An old joke in the Soviet Union, told in the Economist article, is that capitalism is where man exploits man, and socialism is just the opposite.

The researchers relied on statistical analysis to test the honesty of the participants. Forty rolls of a die is enough to expect that an honest participant would report nearly an equal number of ones, twos, and threes, as of fours, fives, and sixes.  Predictably, there were many cheaters in the test group who reported a statistically unlikely disproportionate number of fours, fives and sixes.

The Economist article commented that growing up under socialism seemed to affect one’s willingness to lie for personal gain:

After finishing the game, the players had to fill in a form that asked their age and the part of Germany where they had lived in different decades. The authors found that, on average, those who had East German roots cheated twice as much as those who had grown up in West Germany under capitalism. They also looked at how much time people had spent in East Germany before the fall of the Berlin Wall. The longer the participants had been exposed to socialism, the greater the likelihood that they would claim improbable numbers of high rolls.

This was bit too much for the left leaning Economist editors I imagine, and perhaps for the University researchers as well, because the Economist then they tried to undermine the results of the study:

The study reveals nothing about the nature of the link between socialism and dishonesty. It might be a function of the relative poverty of East Germans, for example.

Right.  If the study reveals nothing about the nature of the link between socialism and dishonesty then just was the purpose of the study? Why did they even bother to determine the age of the participants and in what part of Germany they had lived in different decades? Well anyway, their liberal consciousness assuaged, or the perhaps the liberal consciousness of the Economist editors, they walked that back as well:

All the same, when it comes to ethics, a capitalist upbringing appears to trump a socialist one.

The study relies on inductive reasoning, from the specific to the general. Deduction, reasoning from the general to the specific, can also shed light on the question of whether socialism or capitalism breeds dishonesty and unethical behavior. All one need do is consider the incentives that prevail under capitalism and compare those to the incentives under socialism. Under capitalism, since it is based upon voluntary exchange, a reputation for honesty and fair dealing is a valuable asset for anyone trying to make his way in a free market capitalist society. Under socialism there is little need for honesty and little reward for it. In fact, to borrow the punch line of the old Soviet joke, it is just the opposite under socialism. Lying about your personal situation can get you more benefits under socialism, and since government benefits are about the only source for improvement in one’s financial situation, there is a powerful incentive to lie for personal gain.

The movie, The Lives of Others, is available on blue ray and dramatically explores this subject.  The special features on the blue ray wherein the director gives his comments are invaluable.

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