Apr 072008
 

Caroline Baum, the Bloomberg financial columnist who has written favorably about Ayn Rand, once wrote an interesting essay about economic incentives and the first Thanksgiving.

Here are some excerpts from Baum’s essay. (The material in quotes is from William Bradford, governor of the Plymouth Bay Colony for 30 years between 1621 and 1656):

…The Pilgrims’ first winters after they landed at Plymouth Rock in 1620 and established the Plymouth Bay Colony were harsh. The weather and crop yields were poor.

Half the Pilgrims died or returned to England in the first year. Those who remained went hungry. Despite their deep religious convictions, the Pilgrims took to stealing from one another.

…One of the traditions the Pilgrims had brought with them from England was a practice known as “farming in common.” Everything they produced was put into a common pool; the harvest was rationed according to need.

They had thought “that the taking away of property, and bringing in community into a common wealth, would make them happy and flourishing,” Bradford recounts.

They were wrong. “For this community (so far as it was) was found to breed much confusion and discontent, and retard much imployment that would have been to their benefite and comforte,” Bradford writes. Young, able-bodied men resented working for others without compensation. They thought it an “injuestice” to receive the same allotment of food and clothing as those who didn’t pull their weight.

…After the Pilgrims had endured near-starvation for three winters, Bradford decided to experiment when it came time to plant in the spring of 1623. He set aside a plot of land for each family, that “they should set corne every man for his owne perticuler, and in that regard trust to themselves.

The results were nothing short of miraculous.

Bradford writes: “This had very good success; for it made all hands very industrious, so as much more corne was planted than other waise would have bene by any means the Govr or any other could use, and saved him a great deall of trouble, and gave far better content.

The women now went willingly into the field, carrying their young children on their backs. Those who previously claimed they were too old or ill to work embraced the idea of private property and enjoyed the fruits of their labor, eventually producing enough to trade their excess corn for furs and other desired commodities.

…With proper incentives in place, the Pilgrims produced and enjoyed a bountiful harvest in the fall of 1623 and set aside “a day of thanksgiving” to thank God for their good fortune.

Any generall wante or famine hath not been amongst them since to this day,” Bradford writes in an entry from 1647, the last year covered by his history.

We now know the Pilgrims’ good fortune had nothing to do with luck. In 1623, they were responding to the same incentives that, almost four centuries later, have come to be regarded as necessary for a free, productive and prosperous society.

I don’t know if Ayn Rand was familiar with the Pilgrims’ story when she wrote her fictional history of the Twentieth Century Motor Company in Atlas Shrugged. (Of course, her direct personal experience growing up in the USSR undoubtedly provided her with ample evidence of the importance of property rights, without having to study the history of the Pilgrims!)

But the parallels are striking, because the principle is the same. Trying to live by the credo of “from each according to his ability; to each according to his need” leads only to misery and poverty, and turns decent people into criminals. On the other hand, respecting property rights results in happiness and prosperity.

If only more Americans had remembered the economic and moral lessons of 1623, then we might have avoided some of the painful mistakes of the 20th century.

   
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