The other day I had a conversation about Socialist systems, and their ability to make people “happy.” The main contention was that people can do what makes them happy via the socialist model, and not care about compensation (let’s make the simple/cliché assumption of near total equality) . I agree; people would be happier. But that would be terrible.

Imagine a world where people really did follow their “interests” into career paths regardless of compensation. Here’s an illustrative example of why it is a bad idea:

R is a cook. He hates cooking with a passion. He also is very dull-witted. Ironically, he happens to be the best baker in the country. He quits to get a medical degree, his self-selected “calling.”

Z is a doctor. She hates being a doctor more than anything else in the world. The stress is killing her, ripping her marriage apart, and neglecting her kids. BUT, she is the leading oncologist on planet earth. She quits to go into cooking, her true “passion.”

The moral of the story: in a capitalist system, people may truly despise their life’s work, but the best are retained through varying levels of compensation. Socialism (or something like it) can lead to inefficient outcomes of “interest” following…while capitalism strives for what you are the “best” at (think specialization), despite whether or not you dislike it.  Like or dislike is a foolish way to allocate labor resources.

Capitalism doesn’t care if you are happy or sad. Just that you are the best…which is the most societally efficient outcome for all.  And, in addition, it just may be that what you excel at, you like!

The award-winning scene below would never happen in the USSA…

Capitalist Compensation Scheme