Pilgrims Beat 'Communism' With Free Market

By Michael Franc

Recalling the story of the Pilgrims is a Thanksgiving tradition, but do you know the real story behind their triumph over hunger and poverty at Plymouth Colony nearly four centuries ago? Their salvation stemmed not so much from the charitable gestures of local Indians, but from their courageous decision to embrace the free-market principle of private property ownership a century and a half before Adam Smith wrote The Wealth of Nations.

Writing in his diary of the dire economic straits and self-destructive behavior that consumed his fellow Puritans shortly after their arrival, Governor William Bradford painted a picture of destitute settlers selling their clothes and bed coverings for food while others "became servants to the Indians," cutting wood and fetching water in exchange for "a capful of corn." The most desperate among them starved, with Bradford recounting how one settler, in gathering shellfish along the shore, "was so weak … he stuck fast in the mud and was found dead in the place."

The colony's leaders identified the source of their problem as a particularly vile form of what Bradford called "communism." Property in Plymouth Colony, he observed, was communally owned and cultivated. This system ("taking away of property and bringing [it] into a commonwealth") bred "confusion and discontent" and "retarded much employment that would have been to [the settlers'] benefit and comfort."

Brink of Extermination

The most able and fit young men in Plymouth thought it an "injustice" that they were paid the same as those "not able to do a quarter the other could." Women, meanwhile, viewed the communal chores they were required to perform for others as a form of "slavery."

On the brink of extermination, the Colony's leaders changed course and allotted a parcel of land to each settler, hoping the private ownership of farmland would encourage self-sufficiency and lead to the cultivation of more corn and other foodstuffs.

As Adam Smith would have predicted, this new system worked famously. "This had very good success," Bradford reported, "for it made all hands very industrious." In fact, "much more corn was planted than otherwise would have been" and productivity increased. "Women," for example, "went willingly into the field, and took their little ones with them to set corn."

The famine that nearly wiped out the Pilgrims in 1623 gave way to a period of agricultural abundance that enabled the Massachusetts settlers to set down permanent roots in the New World, prosper, and play an indispensable role in the ultimate success of the American experiment.

A profoundly religious man, Bradford saw the hand of God in the Pilgrims' economic recovery. Their success, he observed, "may well evince the vanity of that conceit...that the taking away of property... would make [men] happy and flourishing; as if they were wiser than God." Bradford surmised, "God in his wisdom saw another course fitter for them."

Amen to that.

Thanksgiving Story: 2005

Plymouth's Pilgrims may have survived that near-fatal brush with socialism but, sadly, many political leaders remain transfixed by a blind faith in the ability of government to shape and set the course of human behavior.

Case in point: the tenacious liberal belief that no connection exists between the tax burden we place on capital formation and the economic behavior of those who must shoulder that burden.

The liberal creed holds that investors will take economic risks and create jobs no matter how punitive the tax regime. To liberals, lowering that burden through reductions in the rate of taxation simply bestows an unwarranted windfall on the "rich" and deprives the government of much-needed tax revenue.

Of course, incentives matter every bit as much today as they did four centuries ago. The latest proof comes from figures released by the Treasury Department for the fiscal year that ended on Sept. 30. They vindicate the predictions of conservative economists that the 2003 law, which included a number of pro-growth provisions such as cutting the top tax rate on capital gains and dividends to 15 percent, would be a raging success.

Compared to the previous year:

• Total federal revenues grew by an astonishing 14.6%.
  
• Corporate receipts exploded, increasing by 47%.
  
•  Payroll tax receipts, an indicator of employment growth, increased by a respectable 8%.

We have much to be thankful for this Thanksgiving season.

Mike Franc, who has held a number of positions on Capitol Hill, is vice president of Government Relations at The Heritage Foundation.