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Economic Liberty in America

The Failure of Socialism

Due to the historic revision of many of our history texts at all levels of education, few Americans are acquainted with the near starvation of the early explorers that settled in America. They all nearly starved to death because they instituted socialism as their economic system. As a group, they were to equally share the food and supplies that sustained their lives in the wilderness.

This proved to be a fatal decision. There was no incentive for anyone to work and help to grow and harvest crops since everyone was equally entitled to the foods that were produced. As a result, little work was done in preparation for the approaching winter and the settlers found themselves in a starvation situation. The lesson they learned from experimenting with socialism was that it does not work. This system destroys the motivation for people to work and little gets produced as a result.

We would do well to learn from these settlers and steer away from a socialist state. The Roman Empire, the Soviet Union, Nazi Germany and modern day Europe are all examples of nations that fell apart because they adopted this form of economy. When the wealth gets redistributed, the non-workers realize they can freeload off the backs of the people that work for a living. History shows that this type of economy has never worked.

The following article gives a historic overview of the failed efforts by the early settlers to use socialism in order to survive their early days in the American wilderness and how it led to a complete failure.

Economic Liberty in America: A Legacy of the Pilgrims

By Dr. Paul Jehle

 

The Pilgrims, in their quest to be stepping-stones for freedom, had almost everything go wrong as they attempted to plant a colony in the new world. By the time they reached the shores of New England, they were poor, had barely enough provisions for the first winter, and began to die at an alarming rate. With such beginnings, it is no wonder we don't associate economic prosperity with them.

Dr. Charles Wolfe, historian on the Pilgrims, makes the observation that there were no less than six steps of freedom taken by the Pilgrims. At the time, they were developed out of necessity, but with the advantage of hindsight and providential insight, they are the consequences of their commitment to practice the simple truths of the Bible. Dr. Wolfe put it this way:

[I]t occurred to me that they (the Pilgrims) had taken six bold steps to liberty, that these are steps which each generation of Americans must continue to take ... that together these six aspects of liberty, result from the application of ... Christian self-government.1

The steps Dr. Wolfe identifies begin with spiritual liberty, the recognition of personal sin and conversion to the Christian faith. The second step is religious liberty, where they withdrew from the state supported church and formed their own church covenant. The third is political liberty in writing the Mayflower Compact. Fourth, the defense of liberty was seen in their willingness to protect their lives by building a palisade wall around the plantation.2 Dr. Wolfe highlights theireconomic liberty as the fifth step. The sixth, constitutional liberty (1636), was the writing of their Constitution, securing protection for the freedoms they had begun to practice.

The Council of New England, the joint-stock company, represented businessmen willing to invest in planting a colony (called Adventurers). The Planters were those willing to go, including members of the Pilgrim Church of Leyden. The economic contract was a bit one sided. It recognized the right to a profit by the Adventurers but did not recognize such a right by the Planters.

The agreement between the Adventurers and Planters required the sharing of profits, but the Pilgrims insisted on privately owning their homes, gardens and lands they would develop.3 However, this agreement was changed at the last minute by Thomas Weston and Robert Cushman, the Pilgrim agent. William Bradford describes this in Of Plimoth Plantation:

 

"[T]he chief and principal differences between these and the former conditions, stood in those two points; that the houses, and lands improved, especially gardens and home lots, should remain undivided wholly to the planters at the seven years' end. Secondly, that they should have had two days in a week for their own private employment, for the more comfort of themselves and their families, especially such as had families."4

 

They were now being forced to share their homes, gardens, and land in a communal arrangement as well as their labor. In essence, the redistribution of labor and wealth was forced upon them. Though they did not like it, due to the time and their condition, they had to accept it. Lands and labor had to now remain in a common storehouse until 1627, and instead of having two days for their private employment (and profit), six days a week was to be devoted to the common store.

The Pilgrims knew by the experience of Jamestown (planted in 1607) as well as their experience in England that unless private property and labor were respected, there would be little incentive to work. The prevailing notion in England was that all use of land and labor was government-granted because the profit-motive was sinful. When the Pilgrims arrived in 1620,there was no trust in a free market.

Bradford speaks frankly when he says he retells these problems, "that their children may see with what difficulties their fathers wrestled in going through these things in their first beginnings; and how God brought them along, notwithstanding all their weaknesses and infirmities."5 They purchased a ship called the Speedwell, but had to sell it for much less than it was worth when it proved to be un-seaworthy (due to being over-masted.)  Several returned, and extra people and supplies had to be crammed aboard the Mayflower, causing a loss of both time and money.6

After arriving at Cape Cod, they wrote the Mayflower Compact to govern themselves and preserve unity due to the fact that they were off course from their original Patent. Then half the company died the first winter. The growing season became one of survival, and without the providential help of Squanto, who could speak English, and who taught them how to fertilize the corn in the sandy soil of New England, the small Pilgrim band would not have survived.7 The Peace Treaty with the Natives was essential in protecting the relationships with the local inhabitants, and it was enacted by the Pilgrims as an extension of the principles of covenanting they had practiced in both their church (Scrooby-1606) and civil (Mayflower-1620) covenants.

Even without much of a first harvest, the Pilgrims celebrated the first Thanksgiving in 1621 with ninety of their Native neighbors. The Natives brought most of the food. During the next year, 1622, Mr. Weston proved to be unfaithful in his promises or business priorities. When the Fortune arrived in the fall of 1621, it had thirty-six individuals with not enough food to sustain them, let alone the others who were already there. Bradford summarizes: "[T]hey never had any supply of victuals more afterwards (but what the Lord gave them otherwise), for all that the company sent at any time was always too short for those people that came with it."8

Bradford relates their condition of near starvation when he says of the second harvest "[I]t arose but to a little ... partly because they were not yet well acquainted with Indian corn (and they had no other), also their many other employments; but chiefly their weakness for want of food, to tend it as they should have done ... so as it well appeared that famine must still ensue, the next year also if not some way prevented, or supply should fail, to which they durst not trust."9

The Pilgrims Embrace a Free Economy

In the Spring of 1623, Bradford, as Governor, and others with him, realized that unless something was done to make them productive and self-sustaining, they would starve. Bradford's analysis, in counsel with others, demonstrates Biblical reasoning and the application of Scripture.

"So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery ... the Governor (with the advice of the chiefest amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves ... And so assigned to every family a parcel of land, according to the proportion of their number ... This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise might have been by any means the Governor or any other could use ...  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; whom to have compelled would have been thought great tyranny and oppression.

"The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men ... that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labor and service, did repine that they should spend their time and strength to work for other men's wives and children without any recompense. The strong, or man of parts, had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labors and victuals, clothes, etc., with the meaner and younger sort, thought it some indignity and disrespect unto them. And for men's wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it.

"Upon the point all being to have alike, and all to do alike, they thought themselves in the like condition, and one as good as another; and so, if it did not cut off those relations that God hath set amongst men, yet it did at least much diminish and take off the mutual respects that should be preserved amongst them. And would have been worse if they had been men of another condition. Let none object this is men's corruption, and nothing to the course itself. I answer, seeing all men have this corruption in them, God in His wisdom saw another course fitter for them."10

Bradford's "Ingredients" for a Free Economy

Bradford identifies several reasons why socialism (common ownership of labor) and elementary communism (common ownership of land) did not work, even among the most godly people. We can deduce at least the following from his discourse describing their 1623 decision.

1. In a common ownership of labor and land, people tend to become lazy, not wanting to work, thus private property must undergird a free and productive economy.

2. Under socialism, people tend to make up excuses why they can't work, thus private profit is a key ingredient in a free economy as well.

3. Communal living breeds discontent, for all tend to want what others have, but refuse to work for it; thuswelfare must be voluntary (private charity) rather than forced (government charity).

4. Socialism is built on pride and a presumed external equality in an open or ignorant refusal of God's plan in the Bible so that differences between the young, adult, or aged are not respected. A free economy is built, in contrast, on the respect and dignity of individual differences.

5. Though some look at the profit motive as corrupt, it is imperative to see that it is man's nature that is corrupt, including those who hold office in government. The free market, in contrast, is built on personal incentive and self-interest in order to overcome one's naturally corrupt nature.

6. Ultimately, God's design for the economy rests on voluntary choice, which is far more productive than government force and the redistribution of wealth.

Prayer: Key to the Success of a Free Economy

Bradford adds a seventh characteristic necessary for the success of a free economy. He states the Pilgrims had to "rest on God's providence ...  (the) need to pray that God would give them their daily bread ..."11 In other words, without prayer even a good economic system will fail. Why did he make prayer a key ingredient?

Immediately after they reapportioned the land and labor according to private family units, a drought ensued, threatening the very crop they now planted under a free and voluntary system! "I may not omit how, notwithstanding all their great pains and industry, and the great hopes of a large crop, the Lord seemed to blast, and take away the same, and to threaten further and more sore famine unto them. By a great drought which continued from the third week in May, till about the middle of July, without any rain and with great heat for the most part, insomuch as the corn began to wither away though it was set with fish ... Upon which they set apart a solemn day of humiliation, to seek the Lord by humble and fervent prayer, in this great distress."12

This day of prayer was conducted on a Wednesday. Bradford relates that God "was pleased to give them a gracious and speedy answer, both to their own and the Indians' admiration that lived amongst them. For all the morning, and greatest part of the day, it was clear weather and very hot, and not a cloud or any sign of rain to be seen; yet toward evening it began to overcast, and shortly after to rain with such sweet and gentle shower as gave them cause of rejoicing and blessing God. It came without either wind or thunder or any violence, and by degrees in that abundance as that the earth was thoroughly wet and soaked and therewith. Which did so apparently revive and quicken the decayed corn and other fruits, as was wonderful to see, and made the Indians astonished to behold. And afterwards the Lord sent them such seasonable showers, with interchange of fair warm weather as, through His blessing, caused a fruitful and liberal harvest, to their no small comfort and rejoicing. For which mercy, in time convenient, they also set apart a day of thanksgiving."13

The conversion of Hobbomock, a Native who lived near the Plantation, occurred after this day of prayer.14 Both Pilgrims and Puritans, by 1694, had traditional spring days of humiliation, fasting, and prayer, followed by days of thanksgiving for answered prayer in the fall. The topics of these annual proclamations included a humble petition to God for economic prosperity of private businesses and as a consequence, the community as a whole. This annual practice did not stop until 1894.

As Dr. Wolfe so ably points out, the evidence of prayer is in its fruit."Each family was free at last to own its own land, and keep its own production. The result, a tripling of the best previous output! Look at how much they planted year by year: in 1621, 26 acres; in 1622, 60 acres; in 1623, 184 acres!"15 This exponential production continued and they were virtually without want, becoming a community that lent to others in need rather than one being in need of borrowing new supplies on a regular basis, just as God promises in Holy Scripture.16

A Trading Post and Grist Mill as Examples of Economic Liberty

By 1627, when the original contract under which the Pilgrims operated was renegotiated, the Pilgrims had opened up trade with the Natives and Dutch at Aptucxet. Bradford states "that they might better take all convenient opportunity to follow their trade, both to maintain themselves and to disengage them of those great sums which they stood charged with and bond for, they resolved to build a small pinnace at Manomet, a place 20 miles from the Plantation, standing on the sea to the southward of them ... all which took good effect and turned to their profit."17 This Aptucxet Trading Post has now been recreated and serves as a demonstration of the free enterprise economy which used wampum (from the coahog shell) as a medium of exchange (money).18

Then, in 1636, John Jenney of Plimoth Plantation built a Grist Mill outside the palisade walls of the town, where he could enjoy the fruit of his labors. Bradford relates this fact in his work "how they did pound their corn in mortars; as these people were forced to do many years before they could get a mill."19 Not only did John Jenney construct a mill to grind corn and receive payment for his work, but he had a virtual natural monopoly on the production of corn. He became a wealthy businessman.20

Experiments with the "Just Price" and "Wage Ceiling"

To appreciate the bold decision by the Governor and his Council within the Plymouth Colony to allow each family to produce "for itself," we must examine the government-controlled economy that was initially practiced by the Puritans (and the Pilgrims to some degree). The Puritans did not tend to separate from the practices of England. As Gary North observes, "[T]he question of what constituted a truly godly economic system did not immediately disturb them ... what little economics their leaders brought with them was basically the economics of the medieval schoolman ... Thus, it is not surprising that the first two generations of leaders in New England should have fallen back upon ‘tried and true' medieval economic concepts."21

Two such concepts brought by the Puritans to New England and subsequently implemented by the Colonial government was the just price and wage ceiling. In such an economic system, personal profit is viewed as sinful, and thus to curb the corrupt sinful nature of man, the government, a presumed objective institution, was to set both the "just price" as well as the "wage ceiling" for various vocations. In essence, the wages of various vocations (through licensing and inspections), along with the proper price of a commodity (profits could not exceed 33%), were set by, as well as regulated (with punishments), by the Colonial government.22

The Failed Example of the Saugus Iron Works

The failed result of this socialistic system, inherited from medieval times, can be seen in an analysis of the Saugus Iron Works, begun in 1644 south of Boston. Government incentives for private investors were used to make it work. But a government control of supply and demand will put even the best business into extinction. The conclusion as to why the Saugus Iron Works was finally abandoned, after nearly four decades of trying to make it work, were chronicled by historian E. N. Hartley.

In the total mass of data on the ironworks, it is a shortage of operating capital that stands out above all else. The Undertakers, and those who followed them, all decided in time that they would not or could not continue to advance money or supplies ... For this, two key factors seem to have been responsible. One was the high cost of production ... In a normal situation high costs could have been absorbed in higher prices for the goods which were sold. This, however, was ruled out by the ceiling price imposed by the General Court. The second factor was the import of iron from England. Between the one and the other the proprietors were literally squeezed.23

Suffice it to say, that the "experiment" of the Pilgrims and especially the Puritans with socialism, only enhanced the decision of the Pilgrims early on to abandon it to survive. The Puritan "failure" of economic socialism was on a much larger scale. The only reason the Pilgrim colony implemented such radical measures as a free economy earlier was because they followed their "separatist" tradition, "reforming without tarrying for any." By the eighteenth century, the practice of socialism was all but abandoned by everyone due to its dismal failure.

In Conclusion

In modern terminology, within the first century of our nation's existence, the Pilgrims, followed by the Puritans, experimented with the forced common ownership of property, price controls, and minimum wage laws. The result was a documented, dismal failure of such practices. The Pilgrims and then their larger Puritan neighbors discovered by experience that the free market, taught in the Scriptures, was the best system, only to have it threatened again by the mercantile trade laws of George III beginning in 1760-the result of which was our War for Independence.

Though always small, and often only a footnote to the history of America, our Pilgrim forefathers had the wisdom as well as the fortitude and courage to boldly go where no one was going either in England or in the wilderness. As a result, they opened up trade with each other and the Natives which made all more wealthy. The increase of capital (wealth) was of greater importance than immediate profit (riches). This resulted in a legacy and inheritance that eventually led to full independence and freedom, secured under the law of the Constitution of the United States.

 

Notes:

1. Charles Hull Wolfe, Pilgrim Paradigm for the New Millennium, Letter from Plymouth Rock, Vol. 23, Issue 1, January/February, 2000, 2, Plymouth Rock Foundation, Plymouth, Massachusetts-www.plymrock.org.

2. Ibid., 2-4.

3. Gary North, Puritan Economic Experiments (Tyler, TX: Institute for Christian Economics, 1988), 8.

4. William Bradford, Of Plimoth Plantation, edited by Samuel Eliot Morison (New York:  Alfred A. Knopf, 1991), 41.

5. Ibid., 46.

6. Ibid., 52-54.

7. Ibid., 81, 85.

8. Ibid., 102.

9. Ibid., 112.

10. Ibid., 120-121.

11. Ibid., 121-122.

12. Ibid., 131.

13. Ibid., 131-132.

14. Nathaniel Morton, New England Memorial (Boston, MA:  Congregational Board of Publication, 1855), 64-65.

15. Wolfe, Paradigm, 4.

16. See Deuteronomy 28:12.

17. Bradford, 193.

18. See Percival Hall Lombard, The Aptucxet Trading Post (Bourne, MA: Bourne Historical Society, 1968). See also www.bournehistoricalsociety.org/aptucxettradingpost.html where the recreated Post can be visited.

19. Bradford, 145.

20. The recreated Grist Mill, along with the John Jenney House in Plymouth can be visited, see www.jenneygristmill.org.

21. Gary North, Puritan Economic Experiments, 23.

22. Ibid., 24-40.

23. E. N. Hartley, Ironworks on the Saugus (Norman, OK: University of Oklahoma Press, 1957), 270.

 

http://chalcedon.edu/faith-for-all-of-life/liberty-from-abuse-3/economic-liberty-in-america-a-legacy-of-the-pilgrims/


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