Understanding why Modern Socialism is Flawed and how to fix it
Part of the problem with the modern socialism expressed in the policies of progressive liberals is a failure to embrace all aspects of socialism, when it comes to helping people. Socialism’s ideology not only provides for the needs of people, but it demands they contribute to the best of their ability in exchange for those things.
Taken at face value, socialism redistributes income, but it increases societal output and productivity by demanding “work” for that income. Like capitalism, socialism depends on work to function. The more people collectively produce the more there is available to distribute to those in need. But while advanced societies have figured out how to “tax” and then distribute through entitlements, they have not efficiently figured out how to evaluate how to employ those receiving entitlements to their fullest.
Workers’ Compensation Insurance
I am going to provide an example which while not exactly the same… does illustrate the issue. Workers’ compensation insurance is a “socialist” program designed to insure that those who can’t work (due to a job injury) receive adequate income. While employers largely pay the workers’ compensation premiums, employees should make no mistake that the cost of workers’ compensation is factored into an employer’s labor cost and pricing and so it does impact their compensation and cost as consumers.
There are people who have made collecting workers’ compensation an “art form”, they undermine the system. In California with its loose workers’ compensation criteria, workers compensation costs for a healthcare staffing company like one I ran can run as high as 18–19% of payroll! Compare that to workers’ compensation costs in other states that typically ran around 10% and some as low as 5%. Workers rarely realize that the cost of workers’ compensation is “socialized” by lowering the hourly rate employers pay or raising the hourly rate employers charge consumers… since workers are consumers… they do pay the higher workers’ compensation… and so one way or the other, these costs are “socialized” or “redistributed”.
One way to avoid high workers’ compensation is to reduce “on the job” injuries (which we were constantly addressing) and another is to employ “injured” workers on less physically demanding tasks (light duty). Another technique is to screen for people that have a history of frequent workers’ compensation claims with respect to physical conditions that are difficult to diagnose and thus easy to claim (like stress). We used all of these techniques, but the one that seemed to work best was insuring all workers claiming workers compensation would be required to show up for light duty even if it involved sorting, scanning, or filing documents or answering phones and making sure the word got around that we did that. As a result, we experienced a dramatic drop in workers’ compensation claims, almost 50%!
In other words, the workers’ compensation system was working for those that it needed to be there for and those that were “gaming” the system either were kept working or eventually avoided applying for work at our company. Viewing this from a socialism perspective by avoiding the cost of people who “gamed” the system, the system remained economically viable for those that really needed it. And this is an important concept lacking in progressive socialism’s entitlement ideology… while lip service is paid to “system abuse”, it is usually accepted as a “cost of doing” business.
I am a capitalist with socialistic tendencies. I believe a market based economy works best, but I am prepared to share the income and wealth with those that truly need it, but I want a system that insures only those that truly need it are getting it so that the cost of socialistic entitlements are minimized for those paying it and available for those needing it. We have come to think that if the government pays something, the cost to us is minimal and perhaps given that many government entitlements are funded with debt, that may be partially true in the short term. But for socialism to work, it needs to focus on the “work” component as much as the “needs” component and I see that sadly lacking in today’s political ideology.
