I recently saw the following facebook post:

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, "OK, we will have an experiment in this class on Obama's plan". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little..
The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F. As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else. To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. It could not be any simpler than that.
Remember, there IS a test coming up. The 2012 elections.

These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:
1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

by: Ed Will

I thought it needed a 2nd chapter:

This is a lovely story, but there is a 2^nd chapter.

The next semester the students decided they wanted their grades to be decided in a neo-liberal capitalist fashion. After all, that would mean everyone got what they deserved. The students all had different abilities, interests and work ethic, so they were all allowed to choose what they wanted to study.

Two students were twins, and the sons of another professor. ‘As your father is so clever’ the professor told them ‘you two will get an A grade without having to turn up to any class.’ One twin thought this was fantastic and spent the entire semester partying before receiving his ‘A’ at the end of term. The other though had more motivation and attended all classes hoping to achieve a 2^nd grade A – which due to his ability, plus effort, he did.

One student decided to study nursing, he was told he had to attend 60 hours of classes a week, which he did. He worked hard, staying up till midnight every night and making sure he knew everything he needed. At the end of term he received his test result and was delighted to see he had achieved 100%! He was less pleased to see that it had been graded a ‘D’ though. He queried this with the professor who told him that nursing was not as hard as other subjects so he could not receive a higher grade, no matter how hard he worked.

There was also a student who decided to study football. He was told he had to attend 1 hour of classes a week. He studied on and off in his spare time, and was surprised after only one week to receive his test – which he had thought would be at the end of term. He passed the test with 55% and received a grade ‘A’. The professor told him that he could sit the test every week, and if he kept his score above 50% he would receive an ‘A’ every week. This student ended the term with 12 grade A’s.

The music student also worked hard, but did not mind as she loved her studies. Half way through the term she received a test paper. She achieved 90% but no grade. When she asked the professor about this he told her that he had flipped 10 coins after marking her paper. As they had not all come down ‘heads’ she would receive nothing for her work, which was a shame as it deserved an ‘A’. Surprisingly this did not deter her however as she reasoned that eventually, she would get 10 ‘heads’ in a row and receive the ‘A’ she deserved. She was right, two years later she received her A.

Another student realised that as the papers were not done in sight of the professor, he could get other students to take his paper for him. He recruited a group of students from another college which could only afford to give very low grades. These students were just as clever, but only the top students were even able to achieve a grade ‘G’. A group of them agreed to take the paper. When the results came back, the paper was graded ‘A’. The student gave one of the grades to the students from the other college, who were happy to share it, and he kept the resulting ‘B’ for himself.

One student had to skip classes now and then to care for her sick mother, she tried hard to catch up with the work missed but found it impossible. She lived next door to the student who had received their ‘A’ at the start of term without having to do any work. She asked him to help out to enable her to attend class, but he declined, reasoning that it would only encourage her to become lazy, and that she had to learn the value of hard work if she wanted to achieve anything in life. She finished the semester with an ‘E’.

At the end of semester party, the students reflected on what they had learnt. They decided that not everyone who had been rewarded had worked hard, and that not everyone who had worked hard had been rewarded. Their class had fragmented and the experiment had caused discord and unhappiness. They realised that there was more to life than just ‘grades’ and that grades alone were not a measure of success or worth. One tenth of the people had got the idea that that they didn’t need to work because they already had what they wanted, and nine tenths had realised that hard work didn’t matter because someone else was going to get what they had worked for.

The professor told them that neo-liberalism would ultimately fail because for 99% of the population, the reward is not great, and for 1% the reward is astronomical, but can only stay astronomical on the backs of the work of the 99%. Despite the fact that the 1% held vastly disproportionate amounts of power in politics, either personally or through the influence of lobbying backed by millions of dollars, the 99% were starting to realise that the American Dream of everyone being able to be wealthy was actually an American Lie, as well as being a statistical impossibility due to the fact that the notion of wealth is relative and not absolute.

The professor told them that a system that only values acquisition of wealth was a system that had no morals as it did not question where that wealth came from and what the actual cost was to society and to the planet. It was doomed to fail because after a time, the only way to keep increasing profit was to exploit people and natural resources beyond breaking point. Instead we needed a system that rewarded those who added value to society, and penalised those who damaged it.

Being a European professor he also needed medical attention from laughing so hard at his students thinking that Obama was a socialist.