Disclaimer: There is no such thing as "socialism". What follows are my own ideas about socialism.
The outrage against children receiving "participation trophies" and related practices such as not keeping score in sportsball, is a common enough trope. But why? I'm no expert in childhood education (I'm in adult education), so why should I or any other non-expert have strong feelings about how teachers teach children? The answer is that people who object to these practices see them as breaking an important moral norm, exactly as if educators were encouraging children to fight or lie. The objection is not to a method but to an outcome, which is a legitimate concern of non-experts. The outcome, the moral norm, is that invidious norms are of considerable importance.
Invidious norms draw distinctions within society. Contrast invidious norms with universal norms, such as the norm against killing. People who violate the universal norm against killing are cut off from ordinary society, either in prison or criminal gangs, or in the insulated and alienated communities of soldiers and police. The distinction is not really between "good" and "bad": people who kill others are not so much "bad" as alien, and people who don't kill others are not really "good", they are just ordinary.
In contrast, invidious norms really do divide people into superior and inferior, without alienating the inferior from society. For example, I consider generosity morally superior to selfishness. I think generous people are morally better than selfish people. But selfish people are still part of society; they are not cut off in the same sense that those who kill are cut off. There's nothing wrong with invidious norms per se, but as with any other element of society, we should think clearly and deeply about them.
Capitalism establishes an invidious norm: the superior should be economically rewarded, and the inferior should be not just not rewarded but economically deprived. This norm, however, is circular: there is no judgment of superior and inferior independent to economic reward: those who are economically rewarded are superior just by virtue of their reward; those who are deprived are inferior just by virtue of their deprivation. Thus, any attempts to reward the deprived is immoral, just as it is immoral to give the gold medal, indeed any medal at all, to the last-place athlete.
Of course, capitalist apologists deny circularity: poor people are inferior not because they are poor; they are poor because they are inferior, i.e. lazy, improvident, and impatient. Rich people are rich because they are superior, i.e. industrious, thrifty, and patient. But ask the apologist how they know that poor people are lazy, and they will answer that if the poor were industrious, they wouldn't be poor. And even if we could independently determine laziness, we cannot be sure that poor people are lazy because they are poor. (See especially recent criticism of the "marshmallow" test.) Just that Donald Trump, for example, is both rich (well, richer than me) and President of the United States is evidence enough that the connection in our capitalist society between merit and reward is completely broken.
A related norm that precedes capitalism is the norm that people do not want to be virtuous; they must be forced to be virtuous. It is the moral duty of the superior to force the inferior to be good. (See Corey Robin's The Reactionary Mind and Bob Altemeyer's The Authoritarians.) It is not the virtue of the superior that makes them superior, it is their power to force the inferior to virtue. Hence we routinely forgive the powerful for their sins, so long as they retain the power to force the powerless to virtue. That no one has the power to force the powerful to be virtuous is a regrettable consequence, but if it were true that virtue must be forced, that consequence would be inescapable.
Hence the inferior must, as mentioned above, be deprived. Partly just because of simple human perversity — it is not enough that I succeed, others must fail — but there's more. It is not sufficient that the superior have more if the inferior still have enough. Only conditions of deprivation place the inferior under the power of the superior. The superior must have that which the inferior desperately need. The subordination of the inferior to the superior is constant across social systems; capitalism is unique in that the mode of this subordination is wage labor.
The moral progress of previous generations has been to refine and distill relations of subordination; hence Marx speaks of society coalescing into two classes: bourgeoisie and proletariat. Capitalism strips the relations of subordination of previous eras of superstition and ignorance. If we commit ourselves to the project of separating the superior from the inferior and placing the inferior in the power of the superior, I can think of no better way of doing so than capitalism. Simply trying to change who is superior and who is inferior must be a step backward into superstition and bullshit.
We have reached the pinnacle of relations of subordination. The only way forward, then, is to eliminate relations of subordination. We must directly acknowledge and confront the underlying idea that it is a moral good to divide people into the superior and inferior, and that it is a moral wrong to reward the inferior at the expense of the superior. No small task, and a task, I think, that no would-be socialist society has successfully confronted.
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