Individualism Versus Collectivism

“What I am referring to is the rise of what might be termed individualism over collectivism. This is the idea that our world view has shifted from the need to play a minor part in a bigger society to the view society, and pretty much everything else, should revolve around us.”

In an op-ed for the Australian newspaper two months ago, Bernard Salt, a partner at KPMG – an auditing, taxation and financial advisory firm – argued that people have become self-centred. That people worry more about themselves than they do about the wider society.

He backs his view saying:

“If you are not claiming every thing you are entitled to, and more, then you are seen as a bit of a loser. And I suspect this is because today we believe we are entitled to a standard of living that is more or less disconnected to any notion of how hard we work.”

That paragraph proves Mr. Salt doesn’t understand individualism. In fact, we’ll explain how individualism is the most important ingredient for economic prosperity and progress.

But first, back to Mr. Salt…

Individualists Don’t Sponge Off the State

The mentality he rails against is actually the mentality of collectivism, and not individualism.

People who are individually minded, those who rightly act in their own interests, have no desire to sponge off the state. Simply because they prefer to keep what they earn and would like others to keep what they earn.

Collectivism is where you get the entitlement mentality.

You know the saying, “What’s mine is mine and what’s yours is mine”!

In a collective economy… an idea always needs approval from an “Ideas Tsar”… a central planner who decides on behalf of the market which ideas live and die.

Now, that’s not to say collectivist societies can’t develop new ideas. The difference is, the State decides which ideas will be successful, not the market.

The 1960s “Space Race” is a good example. How was the Soviet Union able to put the first man in space when it was a communist nation? And why was the capitalist United States second?

For the answer you just need to consider the cost of the “Space Race”. Sure, the Soviets got there first… but look at the cost… millions of people living in abject poverty… an economy that could barely produce a workable car… queues for even basic food items… no medicines – except drugs for athletes… and so on.

By contrast, the individualistic United States had plenty… 40 car firms of various sizes (by the way, 680 auto firms came and went between 1900 and 1930. That’s creative destruction for you!)… little poverty… supermarkets crammed with food… the best healthcare system in the world… and so on.

The difference was entrepreneurs could flourish. The government didn’t dictate what companies could produce.

But in order to be the first nation into space, the Soviets had to devote all their resources to it, and subject their citizens to decades of poverty, violence and oppression.

In contrast, the Americans got a man into space by only devoting a fraction of its resources.

Free Markets, Not Governments Fund Essential Services

In short, individualism and free markets provide society with the things governments take the credit for – health, education, public buildings, etc. If it wasn’t for the actions of the market, like the Soviet Union, none of these services would be possible.

But it all relies on an economic environment that allows creative destruction. Where new ideas can spontaneously break through to succeed or fail.


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13 responses to “Individualism Versus Collectivism

  1. What an extraordinary statement from Mr Salt. Next he will be wanting legislation to ensure that silly little small-player auditors and accountants won’t be able to corrupt the purity of the auditing and accounting world by their selfish motivation for profit rather than the common good. SEC and Lehman, KPMG and Fannie, NINJAs and ‘Community Reinvestment’, Fred, it’s all the same game, really.

  2. Excellent work Mr Sayce, a piece collectively describing individualists. “individuals dont sponge off the state” How would you know? they are all individual ie. different!

    As for the fact that millions of Russians had to starve so that the Russians could be first into space……drivel.
    The statement that the US had little poverty is also drivel.

  3. Well said, Drood! I think poor old Bernard has been hugely misunderstood by Kris – Bernard always writes with his tongue in cheek, but in this case he offers a critique of our apparent individualism which is really nothing more than sponging, and not collectivism either. Collectivists work together for the good of society and forego much, including a standard of living in order to achieve their (unattainable) earthly nirvana.

  4. Kris – interesting view. On balance you have a good point.

    Wiz – just who in your opinion or understanding wants to forego a certain standard of living for the greater good.

    Other than our social contract to be taxed to support each other what group really wants to not better themselves?

    Qantas workers don’t want smaller pay rises so that they could 1) keep jobs in Australia 2) have a sustainable engineering industry in Australia and 3) keep Australians flying more frequently (a higher standard of living)

    What’s wrong with a society that caters for a minimum standard of living? From there we should be free to reach a higher std of living while not denying a basic minimum std of living (what ever that might be – but would include much of what were used to).

  5. M&M@4……..Wiz – just who in your opinion or understanding wants to forego a certain standard of living for the greater good.

    Drood does

  6. Drood – honorable. There are sections of the community that go without and work for each other. You might like what the Amish have to offer.

  7. There are thousands of individuals who sponge off the state. They don’t act in concert, they make individual decisions.

    Perhaps they can be pidgeon holed and classified for an easy description, but they act individually, not collectively.

    I think it is the ready acceptance of personal responsibility for their own actions and welfare that makes people fend for themselves with little or no reliance on others.

  8. “”There are thousands of individuals who sponge off the state.””

    Every Govt employee, from Federal down to Local, all the Depts and Govt-owned businesses.. probably 30% of Australian live off the rest of us working in the private sector.

    I don’t see any evidence that collectivism promotes an economy faster than individualism, and charity by individuals kept those without the necessities alive before the Govt took over that industry from the churches.

    ..and I don’t remember signing any contract with the Govt to pay tax! They are just the biggest gang of thieves with guns who will kill me if I don’t. If any of their ideas were worth a dime at all they wouldn’t need compulsory tax to implement them. But they are completely bereft of any idea of freedom and enforce slavery with thugs.

  9. “..and I don’t remember signing any contract with the Govt to pay tax! They are just the biggest gang of thieves with guns who will kill me if I don’t. If any of their ideas were worth a dime at all they wouldn’t need compulsory tax to implement them.”

    While I agree that governments don’t always spend money wisely and are in fact often very wasteful, there are some things that I just can’t imagine an individualistic entrepeneur creating with their own money. e.g. Department of Child Protection. Clearly this is something that only a government could run, because the parents of the children in question aren’t capable of showing due care. And of course, no individualistic entrepeneur is going to invest in the common good, because that would just be a downright abomination of their inalienable right to pay no taxes and think only of themselves.

    And what about the police force? Do you think many individuals would think to pay an annual subscription to Law and Order Corporation until their house is actually broken into? What about people that cannot justify the cost of paying for such services, or have no money at all? Do we just allow such people to be raped and murdered because they were silly enough not to have Law and Order cover?

    I understand that people have a problem with government, but the suggestion that we could be living in some free market utopia where everyone has an excellent quality of life just because taxes don’t exist seems completely ludicrous to me. Individualism sounds like a great idea until you’re the one in need (often through no fault of your own).

  10. This text itself sounds like a piece of Soviet propaganda only written by American fanatic. If individualism is such a superior ideology why American space programs ended up in firing all the staff instead of space shuttle and the country is bankrupt while Russians are still flying high in their space station laughing at the American superiority? All major religions say that the father of individualism is Satan and I think they have a point – it ends up in flames and riots that look like Hell.

  11. Jack – are you saying that religion suppress and limits individual and independent thought?

    Surely we are allowed freedom to decide and chose our own path.

    As for soviets. Well I recall a svetlanababe on this site. If russian maybe she can tell us if the russians are laughing.

    I reckon they’re merry from vodka to get relief from russian mafia.

    Don’t communist societies show the greatest disparity between rich and poor. Americas disparity has only become a recent phenomena relatively recently.

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