Saturday, April 17, 2010

Communism vs. Free Markets at Plymouth Rock

I just learned from an article entitled  Our Forefather’s Failure (at LibertyUnbound.com) that the colonies at Plymouth Rock and Jamestown tried both free market and communist systems – long before Karl Marx was born.

The Pilgrims landed at Plymouth Rock in December 1620, and in spite of help from the Native Americans, half of them died the first year. The second year, more of them died.

The Pilgrims simply weren’t producing enough food, so their first solution was to institute beatings for those who did not work hard enough. This had little effect on productivity, and it increased discontent.

The colonists astutely observed that their system tended to retard productivity while breeding confusion and discontent. We know this because they wrote about it in their journals. Clearly, their initial system was incompatible with human nature.

By the spring of 1623 the Pilgrims feared they would not survive another winter, so in desperation, they adopted a radically different system, and it saved their lives. Productivity increased, and in 1623, they held their first Thanksgiving.

Which system failed the colonists initially, and which radically different system saved them? Which system was so incompatible with human nature, and which system was so compatible with human nature? Which system was so ugly, and which system was so beautiful?

According to their original governing document, the Mayflower Compact, they shared everything produced by any one of them – from each according to his ability – to each according to his need. The result was that only a small percentage of them worked hard, and the rest were freeloaders to varying degrees.

Then, in the spring of 1623, the surviving colonists decided to let each person keep the fruits of his labor, and the colony’s total output increased so much that they were never hungry again.

Communism was killing the colonists at Plymouth Rock, and by switching to a free market system, they became more productive and saved themselves – in a single growing season.

The transition from communism to free markets still lacked full property rights however. Whereas, each individual owned the fruits of his labor, he did not own the land he worked, and thus he did not own any improvements he made to that land.

In 1623, the colonists were still growing food on parcels of land that were reassigned by random lots each year, which they astutely observed was a disincentive for each farmer to make permanent improvements to his parcel of land because in the following year, someone else would inherit the fruits of any labor he devoted to improvements. Therefore, in 1624, they adopted full property rights where everyone owned the land he worked, and the result was another productivity boost. Whereas, the first step toward property rights and the free market increased productivity enough to feed everyone, the move to full property rights produced enough extra food to export and trade for furs and other goods.

The article goes on to explain the similar experience in Jamestown:

Jamestown, the first permanent English colony in America, established in Virginia in 1607, had an experience similar to the Pilgrims at Plymouth. Early years of starvation were followed by converting to a system of property rights and a free market, which brought abundance. Under collectivism, less than half of every shipload of settlers survived the first 12 months at Jamestown. Most of the work was done by only one-fifth of the men, to whom the socialist system gave the same rations as to the others. During the winter of 1609–10, called “The Starving Time,” the population fell from 500 to 60.

But when Jamestown converted to a free market, there was “plenty of food, which every man by his own industry may easily and doth procure,” wrote the colony secretary Ralph Hamor in 1614. Under the previous system, he said, “we reaped not so much corn from the labors of thirty men as three men have done for themselves now.”

The article didn’t mention the Roanoke colony, which just disappeared without a trace, but I now have good reason to suspect they were killed by communism.

Although both my first hand experience and observations as well as my research and analysis have long since led me to conclude that the free market and property rights are superior to communism, I would have believed that communism could have worked in the case of the first American colonies because they had every advantage one could give communism. They had already unanimously agreed to communism. They all shared the same race, nationality, religion, political views and economic views. Failure meant starvation, and slackers were beaten, but in spite of every advantage possible, communism was a catastrophic systemic failure in the first American colonies.

Consider that the colonists at Plymouth Rock had no historical precedent on which to evaluate communism vs. the free market, and yet when communism failed them, they invented and adopted a complete free market system with full property rights in just two years.

In just four years, the colonists proved that that communism was a very unnatural and ugly thing, and that free-market and property rights were a very natural and beautiful thing.

Our ancestors’ understanding of the superiority of the free market and property rights made us the dominant nation on earth; whereas, today we are rapidly losing that status. Could it be that  Americans have forgotten the hard won knowledge of our ancestors?

Consider that the President of the United States has 400 years of additional historical precedent as well as a Harvard education, and yet he still doesn’t understand how the free market is superior to communism. He says that that when the government forcibly takes the fruits of your labor and gives it to others to “spread the wealth around”, then that’s “good for everybody”.

Those colonists at Plymouth Rock, who seem so much more in touch with reality than the President of the United States, remind me of small town Americans today. Of course, the President says that small town Americans today are basically racists who have “antipathy toward those who are different” and who “cling to their guns and religion”.

12 comments:

  1. President does things close to what most of voters want him to do.
    Unfortunately still too many people like socialism.

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  2. You had me until then last two paragraphs. You fail to address abuse of the "free market" that occurs when too much influence is concentrated in the hands of a few (wealthy/powerful) who become motivated more by greed and avarice than simple self-interest. It is at such times that (at least in the US) the electorate may rise up with the only power they posess (their vote) in an attempt to realign power and priorities of the government and society.

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    1. The government and socialism is the tool they most readily use to concentrate influence and wealth into the hands of the few. You are right. It is a serious problem. The power to resist is the power to refuse to do business with them. One can not refuse to do business with the government whether they vote or not. Refusal to participate is illegal. That must be stopped.

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    2. You cannot always refuse to do business with entities. There are frequently no viable alternatives. This takes away our power to resist entirely. This is bad.

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    3. I agree that a monopoly over a life saving product is a big problem if the owner demands more than a reasonable profit; however, a big rights-violating tyranny of the majority government is the worst possible solution - as we are seeing around the world. Consider that a well armed and well informed people would never be the kind of victims you imagine. How is it that the party that says it wants to empower the little guy is the party that wants to disarm the little guy?

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    4. One of the most effective solutions to a monopoly on a life saving product is that the kind of society empowered by a free-market would quickly develop a copy or an alternative; whereas, the kind of solution provided by a government requires the kind of government power that is more likely to restrict such new competition, either intentionally or accidentally - just like we have today.

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  3. The previous poster, Infrated, says he agrees with me until the last two paragraphs because apparently he thinks the President is protecting us from "abuses by the free market", and he is disappointed that I did not address such abuses in this article.

    My last two paragraphs are about how statements by the President demonstrate that he doesn't possess the hard won knowledge of our ancestors, and that he arrogantly dismisses those who do.

    But Infrated is right. The President is an economic genius and a master of American history. He even won a Nobel Prize! That PROVES he is right.

    The "abuses of the free market" would have to be a different article in which I would explain that there has never been an abuse because of the free market. Any abuse Infrated may imagine is the result of governmnet interference in the free market. If he is disappointed that I did not include such a large general topic in this small focused article, then I suspect he is disappointed a lot.

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  4. Excellent Post - Stumbled on you via ZeroHedge - Bravo Sir.

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  5. Great article. We also have two closed experiments from the 20th century: West Germany vs East Germany and South Korea vs North Korea.

    From the current century we have Colombia vs Venezuela and Chile vs Argentina.

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  6. Very well written and researched article, I thoroughly enjoyed it.

    I learned this story some years ago and repeat it, in not so great of detail, to those who espouse some version of socialism. They're always shocked to learn that America was, on two occasions, communist.

    Sometimes it seems to make them think. It must be that those who believe in socialism/communism are just optimists. They don't truly understand that taking from one person and giving to another is unproductive and unsustainable, and the only way make it work, temporarily, is with force and death. See: Soviet Union, Cuba, North Korea, China, Laos, et al.

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  7. What exactly is 'obvious' about this experiment that indicates it is 'incompatible with human nature'?

    I assert it is NOT obvious, jumping to this conclusion invalidates your entire article.

    Explain for those of us for whom its not obvious exactly what is known about 'human nature' and why this particular characteristic of humanity is chosen as the sole explanation for the failure.

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    1. In addition to common sense, our common experiences, and the the examples I already cited, consider the well known failure of subsequent experiments with communism, and consider the well known evolutionary forces. You do believe in evolution don't you?.

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