One of the themes that comes up often in debates between socialists and capitalists is the idea of ‘punishing success’.
‘When someone, a genius, a person of distinctive intelligence, comes up with a brilliant idea that makes huge savings and improves people’s lives, and in consequence becomes very rich, why do socialists want to punish them, by depriving them of their rewards? Such people are doing great services for humanity – why does socialism hate them?’
To this the simple response is that there are two personalities here: the big capitalist, who has skillfully accumulated a lot of capital, or otherwise come by it, and the innovator, someone who performs or has performed a particular productive sort of intellectual labour. Sometimes the two overlap – often they don’t. Socialists are hostile to the former, but not the latter.
Indeed, the argument is perhaps analogous to something like following, from a defender of an Classical (i.e. not racialised) form of slavery:
‘When a slave of distinctive intelligence, a genius, comes up with a brilliant idea that makes huge savings and improves people’s lives, and in consequence gains their freedom and enough money to buy themselves many slaves, why do anti-slavery advocates want to punish them, by depriving them of their rewards? Such people are doing great services for humanity – why does anti-slavery hate them?’
The fact that these two roles are distinct is also why socialism aims not to attack them both but to separate them. That is – let us grant, for the sake of argument, that in practice measures that attack big capitalists will sometimes have the consequence of disparaging innovators (except, of course, the ones who either don’t pursue wealth and content themselves with a nobel prize or two, or who never get rich because some company snaps up the rights to their innovation).
If such an unfortunate disparagement happens, then it is a goal of socialism to undo it, by ensuring that there are no big capitalists around to make innovators look bad. Under collective ownership, would such productive people be disparaged or distrusted? Of course not: they’d be rewarded as fully as possible.
The form of the reward would depend on the specifics of the system – obviously, the more fully communistic is the economy, the less scope is there for economic rewards, but certainly there would be no stinting, I imagine, on the awards ceremonies, fame and statues. (Indeed, a non-hierarchical and non-militarist society would probably need a lot more statues of inventors and innovators, to fill the spaces where the statues of politicians and generals used to be).
Even if there were economic rewards, they’d likely be something moderate – 2 or 5 times the average income, for whatever period of time, etc., rather than hundreds of times higher. After all, what good does someone receive from the extra millions? There’s only so much actual consumption you can indulge in – really high levels of wealth are primarily about status and respect anyway (or, of course, about extending that wealth further through creating an ‘empire’).
A related tack that’s sometimes taken though is to talk about entrepreneurial wealth as a compensation for entrepreneurial risk: the idea shifts to the value of capitalism in allowing anyone with an idea to test it, as long as they can get a loan and access to markets – but requiring them to take the risk if it goes wrong. This, supposedly, produces more innovation and more ‘dynamism’ than would a system that didn’t give individuals that freedom.
This is a pretty shaky argument, though, when you think about it. Its essential claim is that it is easier to get someone to bear personal risks (and, of course, to persuade investors or banks as well…), than to get society to bear the same risks more collectively. But the same risk that would be terrifying for an individual (bankruptcy, perhaps homelessness, general personal failure) are fairly minor for society as a whole (a diminution of resources).
So it’s not at all clear that this isn’t actually an argument for socialism: that socialism, by socialising risk, will be able to support a higher level of innovation and technological dynamism than capitalism. It simply demands that just as risk is socialised, so too must be the benefits.
Added to this, of course, is the argument that socialism will be able to get more innovation by expanding the number of people with the personal and social resources to innovate – making it easier for people who are neither well-off nor heroic boot-strap-puller-uppers-by to contribute to progress.
EDIT: A third argument that I forgot, for the same conclusion, is that one of the best things about innovation is that once established, it can be spread and extended very easily – when I tell you the new idea, you gain and I don’t lose anything. But capitalism is unhappy with this, so it wraps up every new idea in secrecy and concealment, or lets the knowledge get out, but prevents people from making use of it. Conversely, socialism can allow the most complete publicity and sharing of information.
Of course, as a final note, a possibly-valid argument may be swept up in the invalid ones here. The claim that science and technology will advance faster in a liberal capitalist society than in a totalitarian society may well be true – because totalitarianism stifles creativity and criticism. But it does that at a political level, not an economic one.