A Turkey of an Economic System

by Don Boudreaux on November 26, 2009

in History, Property Rights

Suffolk University’s Ben Powell — a GMU economics PhD — reminds us why the pilgrims had reason to be thankful: they got rid of a turkey of an economic arrangement.  Here’s a selection from Ben’s short essay:

In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. The problem was that young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. Because of the poor incentives, little food was produced.

Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.

This change, Bradford wrote, had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. Giving people economic incentives changed their behavior. Once the new system of property rights was in place, the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.

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  • martinbrock
    Entitling farmers to fruits of their labor on a parcel, including a market in any surplus (beyond a farmer's own consumption), is a very admirable system, but the rationale given here is less admirable.

    "... young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense."

    With parcels granted, do these young men later complain when other men's children pay rents to them? These rents are not simply yields of the parcels, much less a yield of the owner's labor. The rents are also yields of the fathers' (and mothers') investment in the labor of their children, insofar as the parents' parcels lack sufficient marginal value to employ their children's (and grandchildrens') labor and parcel grants are exhausted, an inevitable outcome ultimately.

    The childless landlords invest nothing for this yield. They're simply entitled to it by forcible propriety, but rather than acknowledge this forcible entitlement, they construct some bastard, royalist theory of "natural rights" conflating the marginal value of their labor (Lockean propriety) with other values.
  • There is also a book entitled, Puritan Economic Experiments, by Gary North. From the back cover: "When the Puritans got off the Arabella and waded ashore to Massachusetts in 1630, they carried a heavy intellectual burden with them: five hundred years of accumulated unsound economic doctrines. This system of thought is today called scholastic economics. Actually, the later Spanish scholastic economists who were contemporaries of the Puritans had adopted free market views, but he Puritans had never heard of them. So, a series of disastrous economic experiments began in New England.
    "The Pilgrims had been compelled by prior contract to set up a basically socialist system in 1620 - the common storehouse - and had come very close to starving as a result. They dropped this practice within two years, long before the arrival of their neighbors, the Puritans. The Puritans did not make the same mistake. But they made others: extensive publicly owned lands for grazing, controls on who was allowed to buy and sell land, price and wage controls, quality controls, public guilds and monopolies, and controls on people's fashions. They learned first-hand what government controls produce: conflict and shortages.
    "For almost half a century, the Puritans ran the experiment. They served as willing guinea pigs. Eventually, they learned. Anyway, their children learned. In 1675, the great Indian war broke out - King Philip's War. The politicians tightened controls on the economy, and it began to break down. By the time the war was over a year later, the Puritans had learned their lesson. They abolished economic controls for good, and the economy boomed.
    "This is the story of nearly half a century of Puritan experiments with government controls, all in the name of Christian ethics, and why those experiments were finally abandoned as a failure. The Puritans learned from experience. Not until the American Revolution broke out a century later did American colonists again attempt to impose a comparable system of economic controls, and the result of those controls was the near-starvation of Washington's army at Valley Forge in 1777. Similar experiment - similar result."
  • "Give a Man a Fish, Feed Him For a Day. Teach a Man to Fish, Feed Him For a Lifetime"
  • Can anyone in the Government teach fishing? Oh well, nevermind.
  • LowcountryJoe
    Redistribute the fish and feed him from breadline...maybe.
  • Food and supplies were held in common and then distributed based on equality and need as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food.

    In essence, the same incentives as under communism.
    Collectivism in either case.
  • Gil
    Why I do get the feeling this story has the moral of "if you're not a freedom-loving, gun toting,= anarcho-Capitalist then you're a filthy baby-eating Commie &*#@?"
  • LowcountryJoe
    Why do I get this feeling that you have access to one hell-of-a grotesque community recipe book. How often do you people moa on baby, anyhow?
  • MWG
    Gil, only you, muir, and in many cases, daniel could find a way to turn the professor's above post into a debate.
  • danielkuehn
    Although the joint ownership was a private arrangement as well - Plymouth Colony was organized in Leyden in 1620 as a joint stock company. It was just a bad a private arrangement. To throw this back to Oliver Williamson, this is more an example of privately determined hierarchies, rather than the communism that many people try to associate with the early years at Plymouth.
  • Randy
    Re; "privately determined hierarchies"

    That's an interesting point. My experience with problem organizations, though, is often the communitarian instincts of the boss, not the existance of a hierarchy. A typical example, and one I've seen quite often, is the boss who calls for "teamwork", which boils down to an ineffective leader who hasn't got the guts to hold people responsible for doing the jobs they were hired to do. The result, much as in the Plymouth example, is an organization full of people who specialize in creating plausible excuses for avoiding responsibility.
  • danielkuehn
    Thank you - I thought it was pretty interesting too. My use of the word "hierarchy" was just borrowing the language of Oliver Williamson.

    In the case of Plymouth, the immediate boss - Bradford - actually recognized the problem and helped move them to a system of private plots. But I think your experience still rings true for Plymouth - it was the ultimate bosses of the joint stock company in London that kept sending over non-shareholding colonists, putting so much pressure on the organization at Plymouth.

    I don't know how far we can take causality here. The first several years of a colony's existence were always very hard. I'm personally sure that moving to private plots helped considerably, but I'm not sure the corporate structure that existed before the private plots was so damaging that we can attribute all their hardships to it (and all their thriving to it's end). It's not always the best form of organization, but it often is. The point is, these colonists were always freely contracting, private individuals - from the beginning. And they did what freely contracting private individuals do best - they voluntarily tried several forms of social organization, they innovated, and they found what works best for them.
  • Congratulations to Daniel and Gil for your extraordinary ability to miss a simple point.
  • indianajim
    You seem to have missed the point: Sharply shifting control of food production & allocation away from communal control toward individual control incentivized "industriousness."

    The results bolster the argument generally for shifting control of production and allocation away from communal control.

    In the former USSR, "private" food plots were crucial to feeding the masses because socialist agriculture was so inadequate in what it produced. The inadequacy of socialism there was not limited to food production; the inadequacies of the Soviet's socialist system led to its collapse.
  • danielkuehn
    Far from missing that point, I actually MADE that point ("It was just a bad a private arrangement. "). I just wanted to additionally make the point that Plymouth Colony was more akin to IBM and General Electric than it was to your Soviet Union example. But of course, the inclination to compare everything to the Soviet Union still holds true.
  • MWG
    Mental masturbation. You should move to Mexico and sell tickets.
  • danielkuehn
    If you don't find it interesting, why comment?

    Some of us do.
  • indianajim
    You "MADE" exactly my point? No.

    My allusion to food production in the former USSR was inappropriate? No.

    The point, again, is that communal control of food production and allocation in Plymouth and the former USSR reduced "industriousness" relative to circumstances in each case where greater individual control of food production and allocation occurred. You are smart enough to see the point, but for some reason you seem to want to blur it with talk of "good private" vs "bad private" and suggestions that the USSR's experience is a tired old example that all should ignore.
  • Methinks1776
    Please refrain from picking fights with Danny. He can't understand why you would disagree with him since he made a completely innocuous and clearly pointless observation. Also, no more and dragging out tired old Soviet examples. Like...Dude...how OLD are you? OMG LOL LMAO
  • indianajim
    I'm not as old as Methuselah, but I'm working on it.
  • danielkuehn
    I've never disputed the fact that individual food production was more efficient - I'm not sure what your obsession about my point is, indianajim. You always seem to want to invent a disagreement with me. The fact is Plymouth Colony was a joint stock company - it recognized private property rights from the very beginning. Somehow over the years, that joint stock company has been morphed into a commune set up. I'm not sure how that distortion happened.
  • true_liberal
    Bradford's account is no doubt redacted from most 21st century schoolbooks.
  • We have to have ideological pure educators right?

    http://www.startribune.com/opinion/commentary/7...
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