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.
You should be very eager to know which system failed them initially, and which radically different system saved them.
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 is superior to communism, I would have believed that communism could have worked in the case of the first American colonies. I would have thought that the homogeneity of each colony (same race, nationality, and religion) would have removed any resentment caused by the fear within each faction that other factions were freeloading. Also, consider that the consequences of failure meant starvation, that manydid starve, and that slackers were beaten. Given the unusual incentives and unusual lack of one big disincentive, I would have thought that even communism could have worked, and yet 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.
Now 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 still thinks that spreading the wealth around is good for everybody. He still thinks the government can make everybody free from want.
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 cling to their guns and religion.