Does Socialism Produce Success Stories?

by Rocket Finance

I was reading the November issue of Money Magazine today and happened on a page that reviewed the latest financial books. I was struck by the fact that we have thousands and thousands of books in this country that detail individual success stories. In fact, an Amazon search comes up with over 40,000 books about the subject of becoming a millionaire. Stories about people who took a chance and made millions or others who made a nice living, but consistently saved or invested so that they could retire wealthy. I enjoy these stories and I often watch Donnie Deutsch show The Big Idea on CNBC, especially when he intereviews people who had an idea for a product or developed a new way of doing things and became wealthy.

My thought is – and I really don’t know the answer – but do such stories exist in socialist countries? In the US, under capitalism, we can all list a hundred people off the top of our head who started out very poor or disadvantaged, but became extremely wealthy through hard work or great ideas. Edison, Walton, Gates, Buffet and many others.

Are stories such as this more or less common in countries where the central government controls most of the economy? I think I know the answer, but I wonder if someone out there has any real knowledge on the subject?

  1. 14 Responses to “Does Socialism Produce Success Stories?”

  2. By ninimum wage on Oct 28, 2007 | Reply

    I would argue that zoning is socialist insofar as it socializes property rights for the so-called common good, and is a socialist success story in the sense that it has the enthusiastic support of a majority of property owners, and has facilitated their wealth-building by protecting their property values from undesirable land uses.

    Having said that, I object to the upward redistributional effects of zoning which make property owners wealthier and non-owners poorer.

  3. By No One Special on Oct 28, 2007 | Reply

    Since the goal of socialism isn’t to create rich individuals but rich societies, perhaps you’re asking the wrong question. The heroes of socialism aren’t individuals who become wealthy themselves but who enrich their society through science, the arts, culture, sport, health and a host of ways in addition to financially. Are there people who become rich in socialist nations? Of course; look at comparisons on lists like Forbes’ Global 500. Is upward social mobility greater in the U.S. than in so-called socialist countries? Not really. Are the super-rich as esteemed as many Americans feel about Sam Walton or Bill Gates? Not generally, but then Americans don’t esteem their greatest poets the way many Europeans do. Can you “list a hundred people off the top of [y]our head” that are American painters or champions of the poor?

  4. By rocketc on Oct 29, 2007 | Reply

    NOS,

    Sam Walton and Bill Gates are champions of the poor. Do you believe that Bill Gates has not enriched society – and thousands of his fellow Americans in the process?

    Socialist leaders always play themselves as champions of the poor, but so they really help the poor of their nations?

    So you subscribe to “greater good” theory. I need to make personal sacrifices for the benefit of everyone else. Who then is looking out for me and my family? Who decides what choice represents the “greater good”?

  5. By rocketc on Oct 29, 2007 | Reply

    Minimum Wage or Ninimum Wage, as you seem to be calling yourself lately, I actually agree with you. Especially when considering the recent rulings by the Supreme Court that allowed the property of a private citizen to be siezed by a local government because the property would generate more tax revenue for the municipality as a store or shopping mall.

    That was definitely a socialist act.

  6. By rocketc on Oct 29, 2007 | Reply

    One more thing: Who pays the bills in a socialist society? If there were no Waltons or Gates, where would the money to support the arts or poetry come from?

  7. By plonkee on Oct 29, 2007 | Reply

    Define a socialist society.

    I too think you are asking the wrong question. In a socialist society, it is less likely that people will be esteemed for making money than for their contribution to society.

    I can think of several Europeans that have made great fortunes (for example the founders of Ikea, Tetrapak, Dyson) but are they as esteemed as Tim Berners-Lee, Stephen Hawking, Primo Levi, Picasso,… Not in my book they’re not. But then I’m British, and boasting about making a lot of money is still considered ever so slightly vulgar.

  8. By rocketc on Oct 29, 2007 | Reply

    I guess the point I was making in the post was not who receives the most esteem, but whether or not “rags to riches” success stories are common in socialism. In the US, virtually all of our our self-made millionaires and billionaires are also great philanthropists.

    As to whether or not artistic types like Samuel Clemens or Frank Lloyd Wright are more “esteemed” than Rockefeller or Carnegie -it is kind of a wash. An oranges to apples comparison.

    It is not really a matter of lifting up the rich, but has more to do with how they achieved success. aka: Paris Hilton and the Kennedy’s are not respected entrepreneurs because their wealth is inherited.

  9. By No One Special on Oct 29, 2007 | Reply

    rocketc,

    My response wasn’t an attempt to defend socialism, but to help answer your initial question about the trans-societial nature of the “rags to immense riches” story meme. “Horatio Alger” stories do seem to be more common in America, but Horatio Alger was an American, neh? I was only trying to speculate why such stories would be less popular under Socialism. Don’t Capitalists hold that Market demand dictates cultural products? I was trying to guess why Capitalist and Socialist Markets might have different preferences for their cultural heroes. Aren’t Consumers (directly or indirectly) the source of “the money to support the arts or poetry” in both Capitalist and Socialist societies? Aren’t they the ones who “pay the bills”?

    Your comments on the appropriateness of the esteem of various peoples, the contributions of the ultrawealthy to the poor, the disdain you express for Socialism, and even the neglect of economic and philanthropic contributions of everyone but the ultrawealthy all seem off topic. Unless you don’t care if your thread of posts is diverted from your original question, you might want to drop them or else do another post. I don’t want to be the one to hijack this thread, but I will be snarky enough to suggest that lack of respect for Paris Hilton has little to do with her wealth being inherited.

  10. By plonkee on Oct 29, 2007 | Reply

    In a communist society, no I can’t think of any entrepreneurs.

    In Scandinavian countries, there are quite a few and they are relatively socialist (e.g. Ikea guy whose name I can’t remember).

    In the UK (which is only socialist compared to the US) I can think of quite a few Richard Branson, Anita Roddick, Alan Sugar, JK Rowling.

    Don’t forget your own cultural bias. There are lots of American success stories that are not well known outside of the States – I’ve no idea who ‘Walton’ is, Edison is famous for lightbulbs alone, and although I know who Warren Buffett is, I don’t think he’s even remotely famous over here. Everyone has their own heroes.

  11. By rocketc on Oct 29, 2007 | Reply

    Plonkee, you are correct about my cultural bias. My original post exposed my lack of knowledge about entrepreneurs in other countries. I only used them as examples because I don’t can’t think of examples from across the pond. Walton built the Walmart empire and was at the top of Forbe’s “riches” list when he died. Edison pioneered virtually every modern convenience that we enjoy. The batteries, motion pictures, music records, generators, etc.

    Also, my wife loves IKEA. Whenever we go there, I know I am in for a long night. IKEA is owned by Scandinavians, but were their first stores based there.

    NOS, I don’t want the topic to be hijacked. I think plonkee has stayed on topic. No one has said anything to change my personal conclusion that capitalism stimulates creativity, independence and risk-taking. While socialism generally keeps people at the same class level in which they were born.

  12. By plonkee on Oct 29, 2007 | Reply

    Ikea is Swedish through and through, first store in 1958. The founder is Ingvar Kamprad. The Rausing family founded Tetrapak – very successful packaging company, also Swedish. Assar Gabrielsson founded Volvo. All these people are extremely wealthy.

    I disagree completely that socialism keeps people at the same class level in which they were born btw. The greatest social mobility in the UK was in the 1950s and 1960s – which coincided with the most socialist political era. For all its faults, many individuals had opportunities under the Soviet Union that they wouldn’t have got otherwise.

    I think capitalism encourages individuality. That may be beneficial and it may not, it depends a lot on the person concerned. I think socialism is less restrictive than you might think. After all, it is a lot easier to start your own business, if you don’t have to worry about losing access to affordable healthcare.

  13. By No One Special on Oct 29, 2007 | Reply

    Oh, is that what you’re concerned with! Since you juxtapose “creativity, independence and risk-taking” with keeping “people at the same class level in which they were born”, I’m going to address class mobility as a proxy for “creativity, independence and risk-taking”. (Upward social mobility is something which can be measured so much more easily.)

    One often sited statistic is from the Center for American Progress [I'm unable to quickly find a web citation.] which found that children from the lowest quintile of parental family income in America in the last generation had only a 1% chance of reacing the top 5% of the income distribution vs. a 22% chance for those born to the highest quintile. (Those born in the middle quintile had less than a 2% chance by the way.)

    Bhash Mazumder’s “Analyzing Income Mobility Over Generations” [ http://www.chicagofed.org/publications/fedletter/2002/cflsept2002_181.pdf ] notes a persistance of American income inequality at least half again as high in 2000 as it was a generation earlier in 1980. Wealth inequality has become even more persistant. This paints a Capitalist America with class lines become increasingly more rigid.

    Furthermore, Jo Blanden, Paul Gregg & Stephen Machin, “Intergenerational Mobility in Europe and North America” [ http://www.suttontrust.com/reports/IntergenerationalMobility.pdf ] shows that the United States actually now has less upward social mobility than Norway, Denmark, Sweden, Finland, Germany and Canada. (I assume that at least one of those will strike you as Socialist.)

    There is actually a huge body of studies on this topic if you’d like to consult a good university library, but these papers are a good starting point and are readily available on the internet.

  14. By rocketc on Oct 29, 2007 | Reply

    NOS, in answer to your first paragraph: that seems reasonable. Captitalism, with all it’s flaws, seeks to allow equality of opportunity, not equality of outcome. 1% of the lowest eventually making their way into the top 5% of wage earners seems like a fairly good percentage. Not many people have the “creativity, independence and willingness to take risks” that it takes to be that successful.

    I believe that the US is becoming more and more socialistic and that Europe (esp. Sweden, France, Ireland and others) is becoming more and more capitalistic. Therefore, your assertion that wealth inequality is becoming more persistant in the US is one that I accept.

  15. By plonkee on Oct 30, 2007 | Reply

    But still, if capitalism was correlated with social mobility in the way that you expect then you’d think that the US would have more social mobility than Norway and the gap would be closing, not that Norway (still more socialist than the US) would be ahead.

    Capitalism doesn’t really seek anything, it is what happens when everyone tries to gain the most out of each transaction. It certainly has interesting and useful consequences, but almost by definition it does nothing by design.

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