Understanding Socialism – Lesson 3: Diamonds and Coal

This lesson begins with a math problem.  A quick stop at the website for the Energy Information Administration reveals that the current price of Appalachia coal is around $45.50 per short ton.  Basically, you can get a ton of coal for about $50.  Now a quick glance at the website for Tiffany & Co. show’s they have a 1 karat diamond engagement ring costing $8,500.  Now, as many of you may know, coal and diamonds are the same substance chemically.  A diamond is a lump of coal that has been compacted in the earth for so long that it has changed form (I’m not a geologist so I’ll stop there before I sound stupid).

So, if you take the $8,500 that one karat diamond costs and divide it by the price of a ton of coal, you will find that a one karat diamond is worth roughly 187 tons of coal!  WOW!  That’s quite a change in value, don’t you think?  I mean, it’s the SAME THING, isn’t it?  Why is one tiny karat of diamond worth 187 tons of regular coal?  The answer is quite simple and you probably already know it.

A diamond is harder to find than a lump of coal.

How does this apply to today’s lesson?  It’s simple.  The Constitution of the United States declares that “all men are created equal.”  Now, that statement has been grossly misinterpreted by many people (mostly on the left) for quite some time now.  The problem comes from a simple misplacement of word emphasis.  Most people have always read it like this; “All men are created EQUAL.”  The correct way to look at that sentence is like this; “All men are CREATED equal.”

Think about that for a few seconds.  Just that one minor adjustment really does drastically change the meaning of that statement.  In the former method, it implies that, as human beings, we are all equal to one another with no one standing out or being more special than the rest.  The latter implies that we are all created on the same level, but our status can change during the course of our lives.

A capitalist holds to the latter version, a socialist, to the former.

Let’s get back to the coal and diamonds.  Just how DOES a diamond come from a lump of coal?  Well, it takes time and energy and lots of each!  Think about all those pieces of coal sitting in those 187 dump trucks (assuming each one holds 1 ton).  Each and every one of them COULD have been a diamond!  That’s staggering to think about, isn’t it?

Okay, it’s time I started applying this coal/diamond crap to the lesson.  We are all CREATED equal, like coal.  We all start as that lump of coal.  Now from the time of our creation onward, we make choices.  Those choices affect the outcome of the rest of our lives and one of the biggest choices we make every day is what we do with our time.  This choice, more than any other, affects our futures.  It is the daily choice that shapes what our lives will be like on down the road.  Remember, EVERY choice you make has a consequence.  You, and only you, are responsible for the consequences of your choices.

Okay, so we all start off as coal.  There’s nothing wrong with coal.  Coal produces energy; it heats and powers homes and many other things.  Coal has usefulness.  Because of that, we, as coal, don’t really NEED any more time or energy to become useful.  As a person, you have strength, problem solving skills, dexterous hands and a desire to earn a living.  You have everything you need to get at least SOME kind of job.

For this reason, many people go straight into the work force as early as possible.  They will probably finish high school, some will even get a four year degree, but sooner rather than later, they are out in the job market trying to sell themselves.  When I say sell yourself, that’s EXACTLY what you do; you are a product, an employer is a buyer.  The employer seeks an employee to purchase for a job they need doing and they have a set price (or wage) they are willing to pay for that job getting done.

Let’s say he hires you out of the coal bin of all the other people to do his job (Always remember, your job is never YOUR job.  It is your employer’s job.  If you leave, the job will still be there.  It’s not yours, you’re just doing it.)  The job is lifting boxes from one pallet to another in his warehouse.  An employer wants you to work in the warehouse and he is willing to pay you $5.75 an hour to do it.  (At this point, some of you might be shouting, THAT’S BELOW MINIMUM WAGE!  Well, minimum wage needs to be axed.  The entire program needs to go away, but more on that in a later lesson.)

So here’s the offer, you move boxes for $5.75 an hour for this company.  What would happen if you demanded more money?  The answer is obvious; you don’t get the job.  What position are you in to demand a higher wage?  There are MILLIONS of people in the country that can do this job.  If you won’t do it for that price, you employer knows there is someone out there that will.  You have no leverage to use.

So, what of the diamond?  The diamond doesn’t go straight into the work force like the rest.  The diamond spends time in the ground (a representation of school in this scenario).  The longer they stay in the ground and the more pressure applied (an example of effort made), the more beautiful a diamond they become.  Pretty soon, the diamond emerges as a truly rare wonder.

Let’s apply this to people again.  Instead of going straight into the work force, let’s say you stay in school for, oh, eight years.  That’s enough to get at least a master’s degree.  Suddenly, you have special skills all the other people (or lumps of coal, if you will) don’t!  You’re a harder to find commodity than they are!  You can do special jobs because you took the time to have the training.

We’ll say you got a master’s in psychology.  (This is for you, little brother!  I’m very proud of you!)  You graduate and go out into the job market looking for a job as a psychologist (assuming you don’t open a private practice).  Now, a big hospital is looking for a staff psychologist.  You apply for the job.  Let’s be loony and say they offer you that same $5.75 an hour do to it.

What do you do?  Of course, YOU REFUSE!  What’s the employer going to do?  If he doesn’t give you the job, there aren’t exactly millions of other registered psychologists with master’s degrees just wondering around on the streets.  You demand more money!  “Hell no!” you say!  “I want at LEAST $30 an hour!”  And why not?!  You’re more valuable!  You’re a diamond; a rare commodity!  You’re worth $30 an hour and probably more because you worked hard to better yourself!  You’re no run-of-the-mill lump of coal!

In discussing socialistic agendas with friends and colleagues, I’ve been able to have some great conversations with people challenging the points I make.  One friend told me that my statement “hard work yields greater wealth” was fundamentally flawed.  Here was his example.  He said if you compare a ditch digger to a stock broker, the “work” levels are not compatible with the pay received.  After all, digging a ditch is pretty labor intensive stuff.  How much labor does a stock broker have to slave through at his job?  He said that if capitalism were REALLY a setup of more work = more pay then there would be a lot of poor stock brokers and rich ditch diggers in the world.

In this retrospect, he is right.  Digging a ditch out in the hot sun for hours on end takes a LOT more work than standing in a nice climate controlled building in New York running numbers.  I’m with you on that one.  The problem is not in the work, the problem is in the WORTH of the worker.

Here’s an experiment to prove my point.  Let’s take our ditch digger and our stock broker and flip them around for a day.  Make the stock broker dig the ditch and make the digger trade shares on the floor.  What would happen?  Well, I’d be willing to bet the home I live in that the ditch digger would have no CLUE what to do on Wall Street!  He hasn’t had the training that the broker has.  How could he possibly know what to do?  It takes TRAINING to do the stock broker’s job; training he chose to undergo in order to better himself, to make himself more valuable in the workplace.

So what of the broker at the construction site?  Well, I’m sure he’s not too thrilled about having to leave his nice comfy office to go play out in the dirt for a few hours.  I’m sure his hands are going to hurt and be covered in blisters by the time he finally gets to go home. But, when the day is done, you can go over to that construction sight, and I GUARANTEE there will be a hole dug in the ground.  It’s like the ditch digger never even left.

My friend’s argument is what was at the heart of Karl Marx’s fundamental reasoning.  Marx looked at the low wage workers laboring with great effort at life’s most straining jobs for far less pay than the “elite” businessmen were making in their cozy offices.  He found this system unfair.  He believed that the low-wage workers should be entitled to some of what the businessmen were making because theirs was the harder job.  After all, the vast majority of the population was made up of these workers.  Why should so few receive so much when that wealth could be evenly distributed between the masses?  This is the principle that socialism and communism are founded on.

But here’s the problem with that.  The businessman makes more because he, as a product, is WORTH MORE!  The digger couldn’t run the stock trades but the broker had no problem digging the hole.  Low income jobs are what they are because they are easy to fill.  Yes, they are labor intensive and require hard work to do, but ANYONE can do them!  You can’t say you’re worth more to an employer when you can be easily replaced by anyone that walks in the door.

Pretend you’re at an auction.  We’re not auctioning off priceless art or sports memorabilia here.  No, we’re auctioning people, people who want to work.  You are an employer for that construction company looking to buy some workers.

The next item up for bids is Mike (hey, didn’t you go to college with that guy?).  Mike’s skills are that he is able to withstand an eight hour day of hard manual labor and that’s about it.  He’s had four years of college but no outstanding accolades to show for it.  In fact, he barely graduated.  Well, you do need someone to dig those ditches, and at least a little bit of college could give him a leg up on problem solving skills.  Let’s bid on Mike, he could do that job pretty well.  You bid $5.75 an hour.

“I have five seventy five an hour from the gentleman in the front row.  Do I hear six; six dollars an hour for this hard working young man? ”

Nothing.

“Going once… going twice…SOLD to the gentleman in the front row for five seventy five an hour!”

Why didn’t anyone else bid on Mike?  They need a ditch digger too, don’t they?  Well they know as well as you do that there will be THOUSANDS of people just like Mike up on that stage all day!  Why be worried about not hiring Mike?  They can just bid on the next guy that comes up, or the next guy, or the next guy, or the…

Now, the NEXT item up for bids is a real wonder.  He’s got a PHD and is a licensed surgeon.  He graduated at the top of his class and helped to pioneer a new method of open heart surgery that has already saved over one thousand lives.

WOW!  That’s some incredible credentials!  You turn around in your seat to see all the hospital owners in the audience drooling on their lab coats.  The bidding begins and the paddles start flying!  Each bidder fights as hard as he can to have the winning bid.  What an addition to the staff this guy would make!  Having a doctor like him could make any hospital world famous!  Employers will be willing to pay whatever it takes to get him on their team!  They all know that the chances of another worker up for auction with these credentials are slim at best!  Better get this one while the getting’s good!

The point is that the hard work required to become rich in our nation is the hard work you put into YOU, not your job!  That’s the heart of capitalism; strengthening the individual!  The hard work, dedication and sacrifice necessary for achieving greatness in our system are what you put into yourself!  Remember, you are a product!  You need to make yourself the most valuable product possible if you want to rise above the endless sea of coal and shine like the diamond you always have the potential to become!

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