Since Thanksgiving just passed us by, it might be worth talking a little about the historical roots and the economic lessons it affords us.
The usual interpretation for what the Thanksgiving holiday commemorates is that the Pilgrims, who came over from the England and settled the Plymouth colony, had a big celebration and a feast in the fall. They were grateful for the bountiful harvest that they had obtained and they set aside a day in which to thank their God and to share their bounty with the Native Americans, who had helped them get established.
While accurate as far as it goes, the truth of the matter, free from the sanitary influence of Madison Avenue, is much more complex and interesting. The majority of this information is available in William Bradford’s Of Plymouth Plantation. Bradford was the second governor of Plymouth Plantation and relates the course of its history from beginnings in Europe to the establishment and eventual prospering in the new world.
In order to set the stage, we need to examine the roots of what drove these people from England and made them think that the dangerous crossing of the Atlantic is was preferable to staying in Europe. The founders of Plymouth colony were separatists from the Church of England and regarded the Anglican Church as still having too many ways of the Church of Rome and being too ‘popeish’. Facing religious persecution in England, they first moved to the Netherlands in 1609. But the culture was foreign and the long reach of England was not so easy to escape.
After 10 years, they resolved to leave for the new world and, early in 1619, these separatists, now come to be known as Pilgrims, received a land patent that granted them permission to settle in the new world.
The next question was how to finance the expedition. They needed to get backing for the passage across the Atlantic, food for their members during the several months required to make the trip, and then supplies sufficient to build a whole new town for themselves and to sustain them until crops could be planted or some other sources of food be found. Given the technology of the day, their relocation from Europe to North America is akin to picking up a modern suburban community and moving it to Antarctica.
The Pilgrims did find backers in the form of the Company of Merchant Adventurers of London. The Merchant Adventurers were willing to provide the capital needed despite the very tangible risks. These included the fact that Atlantic crossings often ended in disaster, that the colony could fail and be unable to send back any profit from the New World, and that the Pilgrims, despite their god-fearing ways, may simply choose to not honor their word and refuse to pay back their debt.
The Merchant Adventurers required that the colonists work ‘on company time’, basically 6 days a week, and that at the end of seven years, half of all their property would be surrendered to the company. Thus from the beginning, Pilgrims were constrained to live under a communal arrangement of property. That is to say that all of their efforts arranged for the common good.
After surmounting a variety of stumbling blocks, they finally set sail in the late summer of 1620 on the Mayflower, accompanied by their families and servants as well as by some people associated with the Merchant Adventurers (traders and the like, who were called Strangers by the Pilgrims). The ship struck land on the 11th of November 1620, but the passengers found that they had sailed too far north from their original aim of Virginia and were near Cape Cod.
After some discussion, they resolved to settle in what is now known as Plymouth and to establish their colony. It was late in the year, roughly the middle of December, when they had built shelters and finally moved people and cargo to land. Many of them died during this time from what is thought to be maladies brought on by malnutrition (e.g., scurvy).
But surely, once they survived the winter, they would thrive. Unfortunately, that wasn’t to be the case. The year 1621 saw them barely meeting subsistence, and 1622 saw no better fortunes. William Bradford, governor of Plymouth from 1621 to 1657, had this to say about the harvest in 1622 (page numbers refer to the PDF version available online)
In the beginning of 1623 Bedford penned:
and also
Clearly the Pilgrims were having a hard time becoming economically viable. But why? Well, they had encountered the Free Rider problem. Since their fortunes were held in common (they all had to work to pay back their debts to the Merchant Adventurers), they had little incentive to take individual responsibility.
Given this economic arrangement, a Pilgrim could reason in the following way. ‘It is in the interest of my neighbor to make sure our debt is paid back regardless of whether I work to do so. Therefore, I will not work and my neighbor will cover for me.’ The problem with this logic is that each Pilgrim argued the same way, and no one worked industriously enough to make the colony prosper.
Finally, in 1623, the colony abandoned communal property and farming in favor of individual rights. Bradford writes:
Note in particular, the passage ‘for it made all hands very industrious’.
Bradford then goes on to analyze the societal roots of what the colony had been experiencing. Clearly, he laid the problem not at the foot of the debt, held in common by the colony to their backers, but in the colony itself. He identifies how working in common was ‘found to breed much confusion and discontent’. That the most able bodied young men complained [repined] that they had to ‘spend their time and strength to work for other men’s wives and children without any recompense’.
It is also amusing to note that Bradford takes time to mock the Utopian theory of common property found in Plato’s Republic as conceit. A more detailed discussion of the debate about Plato’s Republic in Bradford’s time can be found in the article entitled How Private Property Saved the Pilgrims.
Bradford had an opportunity to oversee one of the most profound economic experiments of all history – not from curiosity but necessity. What he found was that human beings function better and prosper when they are afforded private property rights and are allowed to keep the wealth they create.