It's an interesting problem to grapple with: can you have a dynamic economy with a vibrant entrepreneurial sector, that encourages innovation and growth, and yet have a social floor below which no citizen will fall, therefore avoiding extreme inequality with people living in poverty?
"...when you damp oscillations, you lose the high points as well as the low" [2]
For the most part, successful entrepreneurs are those who had the luxury of experiencing the failure of a business and then still had enough left over to try again. If the worst that can happen is that you hit the socialist rock bottom of only being able to house and feed your family and provide them with last year's models of smartphone, you are more apt to take risks, like starting businesses, or even quitting exploitative labor arrangements.
It's an interesting problem to grapple with: can you have a dynamic economy with a vibrant entrepreneurial sector, that encourages innovation and growth, and yet have a social floor below which no citizen will fall, therefore avoiding extreme inequality with people living in poverty?
"...when you damp oscillations, you lose the high points as well as the low" [2]
[1] http://rationalwiki.org/wiki/Social_democracy
[2] PG in his essay Hackers and Painters, referring to big companies being conservative in designing products http://www.paulgraham.com/hp.html