Is Capitalism or Socialism a better system for society? (Quiz)
Few people are on the fence about whether capitalism or socialism is the superior economic system. And this quiz isn’t really designed to change anyone’s mind.
It’s plainly obvious in reading most commentary that whilst both capitalism and socialism are demonised for their flaws, what people actually mean when they refer to either system can be vastly different. What’s more, the understanding about the root causes of our troubles— and especially the labels given to those causes — get caught up in the abstract, while ideologues perpetuate (dated) theoretical perspectives that don’t match humanity’s lived experience. By taking the discussion back to the consequences of ‘the economy’ on real people’s lives, this quiz aims to highlight that proponents of each system may in fact share the same woes, and possibly even support the same solutions.
Either way, what is certainly true is neither capitalism nor socialism are perfect systems, because the humans living in the economy aren’t perfect. No matter what the rules, some people won’t need them to live ethically, and some people will game them to get ahead. Ultimately our goal ought to be finding the better system; one that achieves the best outcomes for the kind of society we wish to live in, regardless of what we name it.
*See below for quiz answers & analysis
1. Do you think this woman:
a. is lazy and indolent
b. is exploited by this man (who has more power in her culture)
c. deserves to be able to meet her basic needs for food and shelter
d. is paid fairly for her unskilled labour
2. Compare two working people; one is well educated and highly skilled, and the other has a standard education and average skills. Thinking about the value of each individual, how many times more worth is one human compared to the other?
a. 3 x
b. 10 x
c. 100 x
d. 500 x
3. Which of these statements is the most true. Homelessness:
a. is unfortunate but unavoidable (because there are not enough houses or jobs for 100% of the population)
b. is a consequence of someone’s poor life choices
c. can happen to anyone as a result of one major negative life event, followed by 2 or 3 subsequent, correlated events/bad luck
d. is unacceptable in a civilised society because everyone deserves shelter and safety
4. When it comes to medical care, I want:
a. to be able to go to the doctor when I am sick, get emergency care if I have an accident, and receive treatment if I am diagnosed with an illness, even if I can’t pay for these things myself
b. to pay insurance premiums to a private company that may (or may not) cover most of the cost of most problems I might have
c. to pay the full service costs directly for all my medical care including ambulances, screening tests, preventative treatments, educational resources, diagnostic tests etc (and pay no money at all if I never use these services)
d. to pay for my medical bills (as per C above) and also make personal donations to medical research for cures (because they don’t receive any other funding)
5. Rank these in order of importance from 1 (most important) to 9 (least important):
a. My education (and my kids’ education)
b. Police, Fire Brigade, Ambulance services
c. Security services such as ASIO, Airport Security etc
d. Military & Defence (Army, Navy, Air Force)
e. Roads and Rail infrastructure
f. Water & Sewerage network
g. Electricity & Gas network
h. Garbage collection (from bins on the street)
i. Telephone & Internet infrastructure/technology
Now, considering your own annual income (before tax), how much you could personally afford to pay for each? Allocate an amount for your top 5.
6. Watch this video and give a score out of 5 for how much you agree with the following statements: (1 = completely disagree, 5 = completely agree)
a. The kids at the back deserve to be there
b. The kids at the front earned their place, and are ultimately better people
c. The kids in the middle are less lucky than the kids at the front, and more fortunate than the ones at the back
d. All these kids could be equally successful in future with the same amount of personal effort
e. It is unfair, but life is unfair and it would be wrong/impossible to change
7. Is this fair? Yes or No
You live just a short walk to the beach, but not close enough that you can see it from your house. Like all beaches nearby, it is privately owned by the people with houses on the beach front, and you’re not allowed to access it. Only the wealthiest people can possibly afford to buy these houses.
8. Consider the following scenarios. Choose which action you would take:
a. There is a major disaster in a nearby town. Do you 1) Give away food, clothing and blankets to the victims or 2) Do nothing?
b. You’re at the beach and you overhear a child saying wishing she could go snorkelling but doesn’t have equipment. You brought a set for your own kids but they aren’t interested. Do you 1) Offer to loan the child your snorkel set or 2) Do nothing?
c. It’s Boxing Day and you have too much leftover food. Your fridge and pantry are overflowing and you’ll never be able to eat it before it spoils. The family next door are struggling financially and this year they weren’t able to afford a nice spread. Do you 1) Offer them your excess food before it goes to waste or 2) Do nothing?
9. A company is facing bankruptcy due to poor management decisions rather than low productivity or an inefficient workforce. The 14 senior executives and board members get paid a combined total of $12 million annually, and the 500 full time staff get a total of $55 million in wages (4.5 x the wage costs for 36 x the number of people). Nobody wants the company to close so cuts must be made. What should the company do?
a. Sack 100 workers and save roughly $5.5 million
b. Halve the salaries of 3 executives and save roughly $6 million
c. Shave 10% off the salaries of all 514 workers and executives, saving $6.7 million
d. Sack the CEO and save $5 million
10. You’re at a beautiful camping spot in the countryside with only a few other tents dotted around, and one nearby neighbour. A large group of people show up the following day with 2 big campervans. They like the spot you’re camped because it has flat terrain and enough space to park their vehicles side-by-side, whereas you don’t need much room. They ask you and your neighbour to move but you’re all set up and it’s a hassle. It’s a free public area, and there’s a park ranger who seems friendly with the group. How is this best resolved?
a. The group finds a different camp spot down the highway and you stay where you are
b. The group pay you and your neighbour each a small amount for the inconvenience to move to a different part of the site
c. The group pay your neighbour a fair amount for their inconvenience, then the group and your neighbour pressure you to move too
d. The group pays the ranger a large sum to get involved and demand you and your neighbour move
ANSWERS & ANALYSIS
OK, so this quiz is a little loaded, but by distilling some complex economic and social principles into everyday scenarios or personally relatable situations we can see with fresh eyes the ways our world works.
So let’s review the quiz, and your answers, and examine what lessons each question highlights, the thinking (or the madness) in each, and gain an understanding of how the things we do in our lives can be extrapolated to create a more fair, just and equitable world.
1.It is said that if everyone were compensated for ‘hard work’ then every woman in Africa would be a millionaire. Question #1 is examining our belief that a person’s station in life is exclusively a result of their effort and talents, and challenges the myth that if you work hard you will be rewarded.
ANSWERS: A: Dystopia B: Capitalism C: Socialism D: Capitalism
a. is lazy and indolent: If you answered (a), you are divorced from reality. I’d love to know how you earn a living!
b. is exploited by this man: The fact is that social systems impact our economic system in ways not usually articulated. Often they’re grossly unfair and limit the ability of certain members in society to improve their lot in life. This is the basis of inequality. The man’s privilege is taken for granted and never questioned (within his community). This is ‘just the way it is’.
c. deserves to be able to meet her basic needs: We have this pernicious belief that having enough food to eat and having shelter should be restricted to those who ‘work hard’, which in effect suggests the man should starve and be homeless. I’d argue everybody has the right to meet their basic needs, whether lazy or not.
d. is paid fairly for her unskilled labour: Nobody should believe that fairytale. The truth is this woman performs these tasks because she must, and probably isn’t compensated at all. If she were, likely it would not be a fair day’s pay for a fair day’s work, regardless of the perceived ‘skill’ level.
So, what was your answer? Perhaps you see a correlation with your own society and the ways that some people are not paid fairly for their labour, while others benefit unduly from the labour of others due to their status. Someone’s recompense is not necessarily tied to how hard they work, or whether they work at all. This is manifestly unfair, whilst recognising that whether someone works hard or not doesn’t mean their basic survival needs should be denied.
2. Education and skills are highly rated in our modern society, as they should be; the ideas and talents of our fellow humans is what has progressed our species from cave dwellers to space travellers. We are not all born equal — physically, intellectually etc — and it is true that some people contribute more to society than do others by virtue of these differences, or through their subsequent efforts. In an employment market then it also follows that some people will command more compensation than others…. despite the fact that without every single worker at every level performing the role they do, the business could not function.
ANSWERS: A: Socialism B: Socialism C: Capitalism D: Neoliberalism
a. 3x: As an executive of a company, do you have 3 x more responsibility, did you put 3 x more dedication into your studies and early work life, do you single-handedly bring 3 x more money into the business? Yes, that’s possibly a fair claim.
b. 10x: Mondragon is a large and highly successful company in Spain which has been operating as a federation of worker cooperatives since 1956. It employs some 75,000 people however the thing that stands out is its wage ratios. As democratically decided by its worker-owners, executives earn a maximum of 9x minimum wage earners, and often less. This minimising of pay disparity has seen Mondragon survive as a resilient force when other corporations haven’t, and proves that there is no positive correlation between business performance and excessive, imbalanced salaries.
c. 100x: It is commonplace and totally ordinary that a CEO in this country will earn 100x an average worker’s salary. In fact, when Telstra CEO, Andy Penn, copped a pay cut to just under 100x the median salary it was deemed so shocking as to be newsworthy. Whether these people are paid in line with their worth is disputable.
d. 500x: Indeed we live in a time of greed and obscene inequality. Domino’s Pizza CEO, Don Meij, earns well over 500 x his lowest paid employees, despite the fact that in 2017 the company was accused of wage theft and a business model that was unprofitable for franchisees. Many reasonable people would argue that no matter how many hours a week you work, what genius ideas you have, or how many business degrees you’ve accrued, nobody is 500x more valuable than another human being.
In an employment market, your wage is supposedly an indicator of your worth. I’d assert that these CEO’s salaries are not in fact tied to their personal contributions to their respective companies, but rather to the combined productivity of their entire workforce which collectively creates value (and thus, profit). It therefore follows that the overflow of that profit should be distributed equitably (though not equally) to everyone involved in the value creation so that every worker may be rewarded their worth and fairly share in the fruits of their collective efforts.
3. Homelessness is epidemic and rising, despite our wealth as a nation. Most people have empathy, or at least pity, for the poor souls who call the streets home. Nevertheless, our misunderstanding of contributing factors, as well as our beliefs about the causes of homelessness allows us to disconnect from the problem, ensuring people continue to suffer while we stand idly by and permit unjust systems to persist.
ANSWERS: A: Capitalism B: Neoliberalism C: Reality D: Socialism
a. is unfortunate but unavoidable: Whilst it is true that 100% employment is an impossible goal, it is most certainly practicable for every person to be housed. Roughly 120,000 people are homeless today in Australia whilst there are more than 67,000 vacant properties (the lowest in years), and we can assume many have more than one bedroom. Logistics isn’t the problem. Our addiction to property as an asset class (rather than a home being the basic right of every human being) on the other hand is the fundamental reason you have a place to lay your head tonight and 120,000 other men, women and children do not.
b. is a consequence of someone’s poor life choices: The idea that people are poor because they are stupid and lazy is pervasive in our society. It’s irrational thinking that enables us to completely discount everything from the effects of mental illness, to bad luck, to variability in access to opportunities, through to the devastating consequences of other people’s actions in determining life outcomes. But most pernicious is that it allows some people to believe that the homeless deserve their circumstances (or even prefer it!) which alleviates their guilt or any sense of responsibility to their fellow humans.
c. can happen to anyone: The fact is that women over 65 years are the most significant group contributing to homelessness growth. The reasons for this include relationship breakdowns, fleeing domestic violence, and insufficient retirement savings (due to years out of the workforce as mothers, for example) leaving them unable to afford a place to live in the private rental market, and too few public housing places. Another fact: Australia’s household debt to income ratio is almost 200%. That means that most people are living well beyond their means, and if they suddenly lost their ‘means’ (eg: their job) due to no fault of their own, the downward slide would be rapid. Let’s say as a result of losing your job you could no longer pay your mortgage and the bank foreclosed while you were looking for another one. Without a job no-one will rent to you. Then your marriage ended due to the strain, and because you had moved to another city for work/family you didn’t have a large social safety net. Boom! You’ve got nowhere to live. Hello homelessness. Meeting your ‘mutual obligations’ when you don’t even have somewhere to cook or shower is a challenge, so your Centrelink payments get cut off. The scary reality is we’re all just a few unfortunate events away from living on the streets.
d. is unacceptable in a civilised society: We are a wealthy nation, blessed with abundance on every front. Not only are shelter and safety at the very bottom of Maslow’s Hierarchy of Needs, but adequate housing was recognised as part of the 1948 Universal Declaration of Human Rights. Anything less in our first world country is a disgrace. Public housing and a social safety net is the least we deserve and ought to demand of our governments.
The moral of this story is, before you get too smug ask yourself this: What is the largest unexpected financial shock you could sustain before things started to crumble? And once you’ve had this reality check, next time you see a homeless person on the street, consider yourself lucky because what separates you and them may be less than you’d ever imagined. Give them your spare change, unconditionally.
4. In Australia we have universal health care; a socialised and subsidised system rather than user-pays. It is extremely high quality and although it’s largely free for patients, it is extremely expensive. The costs for an unfortunate individual in a user-pays system are prohibitive, which is fine if you never get sick. Because nobody ever gets sick or has an accident, right?
ANSWERS: A: Socialism B: Socialised risk — for profit
C: Capitalism D: Dystopia
a. to be able to go to the doctor, even if I can’t pay: Total Medicare usage in 2017–18 was 414.3 million services. That is a lot of healthcare needs. Whilst not every person uses these services equally as often, or at every stage of life, it is inevitable at some point you or your family members will require care. If you don’t have to take out your wallet to get it, be grateful to Labor PM Gough Whitlam for his gumption, and never take it for granted!
b. to pay insurance premiums: Insurance premiums are anywhere from $50 — $650 per month. Depending who you’re insured with and which level of cover you take out (presumably in-line with your budget), you may or may not be covered for your particular ailment, and even if you are, research indicates that “a culture of claims denial is well entrenched in the insurance industry”. So good luck there.
c. to pay the full service costs directly: In the U.S (the most infamous example of non-socialised healthcare), a visit to a GP will set you back between $300 — $600, while a broken leg can be upwards of $20k. Got a more serious problem? 8 weeks of chemo: $30,000 thanks. And a year of dialysis, closer to $100 grand. You get the idea. Most of us do not have this kind of spare cash floating around.
d. to pay for my medical bills and donations to medical research: The government’s Medical Research Future Fund (MRFF) is $20 billion. In addition, there are about 70 independent medical research institutes in Australia. About 80% of Australians gave to charity in 2015–16, and health was only #3. Even so, all our philanthropy combined only adds up to 8.3% of all charity funding. That’s a pretty massive shortfall! So, what I want to know is how you imagine you’re going to sustainably fund medical research, and which disease are you planning to get (so you know which charity to pour your disposable income into)?
Let’s get real. Some things just shouldn’t be for-profit, and the health and wellbeing of a nation’s citizens is definitely one of those things. This requires a socialised response.
5. Some aspects of our economy are natural monopolies. It simply doesn’t make sense to have competing entities vying for your ‘business’, especially where less than 100% service coverage could literally mean death or destruction. Similarly to healthcare, this question aims to highlight the fact that though you may not use all the things all the time, it serves everyone in roughly equal measure to have the benefit of access to it, and as economically as possible. And that requires a socialised response, whether at local, state or federal level, whereby every member of the community pays a small amount each.
ANSWERS: (All): Socialism
a. Education: A primary teacher’s salary is $69,000/30 kids = $2,300 each, and that’s just for the teacher. It doesn’t include the cost of admin staff, buildings, equipment etc. If you think private school tuition fees are expensive, try paying for it without subsidies.
b. Police, Fire Brigade, Ambulance: These are the kinds of jobs that if the staff are not working it’s a good thing, but you probably want them there just in case.
c. Security: We’re always told that without security agencies we’d all be killed by terrorists immediately. Hope you’ve budgeted.
d. Military: The Department of Defense budget is $32.4 billion+. Better throw them a sizeable chunk so you don’t have to fight your own wars.
e. Roads & Rail: Are you planning to only pay for the roads you use on your commute or also the road/rail networks being used on your behalf to send food from the farms to the supermarket, for example?
f. Water & Sewerage: Potable running water and flushing toilets are totally over-rated. Maybe you can save a few bucks here.
g. Electricity & Gas: You think electricity is expensive now? Wait till you have to budget for the cost of your poles and wires too (and take on the accumulated debt for the infrastructure over the last century).
h. Garbage: You may suddenly care a lot more about compost and reusing household items if you had to cough up each time the garbo man comes.
i. Telephone & Internet: As crap as it is, the NBN will cost a cool $51 billion. Being a network it kinda relies on everyone being connected so what if your neighbour won’t pay his share? Could you live without wifi?
The point is we need all these things, and they’re just some examples of the stuff we collectively pay for as a society through taxes for mutual benefit. Taxes are a means for us to have access to things we couldn’t possibly pay for as individuals, so next EOFY instead of whingeing about your marginal rate, be grateful you obtain these things so cheaply. Sure there are loopholes in our system, but your tax dollars give you much more than you put in.
6. Privilege is largely invisible to those who have it. The way you answered this question says quite a lot about your ingrained belief systems, so what did you discover?
ANSWERS: (5 = completely agree) A: Capitalism B: Capitalism C: Reality D: Utopia E: Neoliberalism
a. The kids at the back deserve to be there: An enormous number of unseen factors determine our level of privilege, and almost none of it is within our control. Nobody should be a lifelong victim of circumstance.
b. The kids at the front earned their place: We routinely convince ourselves that we have personally and solely earned every advantage we have (and yet simultaneously blame any negative life events on bad luck or disadvantageous circumstances). Your good fortune doesn’t make you morally superior.
c. The kids in the middle are less lucky: Good and bad luck plays a huge role in our lives. Acknowledging that reality goes a long way towards having compassion for less fortunate people, as well as alleviating our nagging need to keep up with the Jones’.
d. All these kids could be equally successful in future with the same amount of personal effort: The kids who had a head start will have a higher likelihood to win at life, while the ones who have been dealt a bad hand have to work extra hard just to keep up. That’s disadvantage in a nutshell. The personal effort required of each group to do well is definitely not the same.
e. It is unfair: Whilst it is true that life is unfair and that we are not equal, we have a responsibility to level the playing field so everyone has the opportunity to thrive and contribute to their full potential.
If you’re interested to check your own privilege, try this quiz.
7. You may think this example of the beach is unrealistic, but if you’ve ever been to Thailand or Italy, you will have come across this notion of ownership of beach frontage where the best are reserved for those with money to pay, and the rest be damned. Private property rights is probably one of the most controversial topics. That’s not surprising given our culture. What’s more, it’s fundamental to capitalism. If you don’t personally own a thing you are not able to make money from it. On a social level, owning stuff gives us status as well as a feeling (real or imagined) of security. From a young age we’re taught to share (toys etc), but then somehow that is all forgotten and we become obsessed with things being ours exclusively.
YES: Capitalism N: Socialism — ‘the Commons’
Yes: At the extreme end, private property rights leads to corporations claiming rights over water supplies (water — that falls from the sky!), for example. Are you prepared to pay for what nature freely gives us because the highest bidder puts a fence around it and claims it is theirs to sell? Really? And did you know that there’s a Right to Repair movement because several global companies are trying to assert that things you’ve bought aren’t really yours to do with whatever you want (including fixing them when they break). This is private property rights writ large.
No: Nobody should ‘own’ what they didn’t have a hand in creating, producing or cultivating, and the privatised profit that could be made through the labour of extracting or improving it is also questionable. It is madness to believe that the gifts of nature could or should be privatised so somebody else can make money from it, or excluded from communal use. Minerals, trees/wood, soil, outdoor spaces, rivers etc….these are collectively owned by every living thing on earth.
Historically, colonisers have ventured across the globe, claimed land ownership through war and plunder, then charged the inhabitants to live there through rent, transfer or sale. Basically they stole what was not theirs to take, and the ‘property rights’ of the Crown were ill-gotten. Maybe you now own your very own piece of Australia — you know it’s yours because you have a title deed with your name on it issued by the government. But this land was never ceded. So ask yourself, who does your real estate really belong to? Don’t kid yourself about your ownership because of a piece of paper. Always was, always will be, Aboriginal land. You are simply sharing access, and paying the bank and government for the right to do so.
8. The concept of sharing resources (especially when we have more than we need) is the theme addressed in this question, highlighting the non-capitalist behaviours most of us readily undertake in extenuating circumstances. I ask you, why does it take hardship or tragedy for us to share, and why couldn’t we live this way in our every day lives?
ANSWERS: 1: Socialism 2 (Do nothing): Capitalism
a. Give away food, clothing and blankets: Australians are incredibly generous. Even if it left you without, it is not uncommon for us to give without charge or expectation to those who have lost everything in a disaster.
b. Offer to loan the child: We forgive a child for not coming prepared, but somewhere on their journey to adulthood we decide that everyone should fend for themselves, believing it’s not our problem, or our duty to share. We’d rather the whipper-snipper sit unused in the shed for 360 days of the year rather than offer it to the neighbours to borrow.
c. Offer them your excess food: The reality is most Australians have more than they need, even if it doesn’t always feel that way. But due to a nefarious belief that the ‘have-nots’ are without because of their character flaws, we refuse to share our surpluses as if doing so will reward them unfairly for their indolence, laziness and stupidity. Whether it’s money or stuff, you will unlikely be left empty-handed, however your un-needed surplus would likely fill a gaping need for somebody else.
It is only logical to put things to regular, good use. Access is the new ownership, and the only way for all 7 billion of us to get all of what we need, and for our finite planet to cope with our infinite wants.
9. It remains a mystery why in good times for a company the executives get bonuses, and in the bad times, the employees get made redundant. This question looks at the cost to a company of some of its workers compared with the cost of others, and asks who is really needed to keep a company operational, and therefore who we should be valuing more.
A: Capitalism B: Socialism C: Socialism D: Utopia
a. Sack 100 workers: The median income in 2018 is $55,000/year for a full time Australian worker. Losing 20% of an experienced workforce is clearly a poor business decision, and yet routinely they are the first to go.
b. Halve the salaries of 3 executives: Halving someone’s salary seems like a radical step, and perhaps it is, but they’re also the ones who got the company into trouble. On half pay, the CEO will still receive $6850 per day (or basically earns an average worker’s annual salary in 8 days). He can probably still afford his power bill and groceries.
c. Shave 10% off salaries: No ordinary employee in their right mind would accept a pay cut of 10% for the benefit of a private company on goodwill alone. However, if the workers were the owners (as in a co-operative business model) whereby everyone profits in the boom times, it would not be a big ask for each person to sacrifice 10% of their income in the lean times to see their company through. And that way, everybody gets to keep their job.
d. Sack the CEO: Clearly it’s the most efficient cost-saving strategy. As discussed above, the pay disparity of a CEO against the bulk of their workforce is not representative of his or her worth, only of his or her greed.
It begs the question, when you need to trim the fat, why would you start with the leanest gains? And when the people at the top don’t perform, in spite of their obscene salaries, why are they not the ones facing the music?
10. Sometimes in life, you have something somebody else wants or needs. Sometimes it’s yours to keep because you got in first, and sometimes they’re able to take it from you because they have more money, or powerful connections able to exert influence.
ANSWERS: A: Capitalism B: Profiteering C: Capitalism D: Neoliberalism
a. The group finds a different camp spot: ‘First come, best dressed’ is all good and well if you were first! It does have the effect of squeezing out the latecomers, whether or not their need is greater. Looking at you, best dressed baby boomers and latecomer millennials.
b. The group pay you and your neighbour: Reaching mutually agreed solutions seems like the fairest arrangement on the surface, but the public camp spot is supposed to be free for everybody, so you’re exploiting someone else’s disadvantage, and profiting from what’s not even yours.
c. The group pay your neighbour and pressure you: Suddenly you’re the only one not benefiting in this arrangement, and that doesn’t seem fair at all. You’ve been left powerless, and majority force has been used against you.
d. The group pays the ranger: Property developers and government authorities use this tactic all the time to get what they want. Some people get rich, while others get screwed.
Maybe the ideal solution here would be that you and your neighbour show some generosity of spirit, and move along to another part of the camp site, so the large group get what they need, and you’re accommodated too. Everybody’s happy! Money and power are blunt instruments to get what you want, and sometimes a little kindness towards others in society is the best strategy. Socialism for the win.
There are massive flaws in our current economic and social systems which remain unchanged either because they suit a powerful minority, are ingrained in our thinking because ‘it’s always been that way’, or because we’re not personally affected by it and therefore do not actively seek to make changes. Some people are just entirely unimaginative about the possibilities, and others are pessimists with limited understanding about the generosity of human nature. Which camp do you fall into?
How did you go? What did you learn? Is Capitalism or Socialism a better system for the kind of society you want to live in? Comment below!