[Rhodes22-list] The Real Story of Thanksgiving - Economics 101

[Brad Haslett]

Good read, Rummy.  Now here's the economic side of the story.  Brad

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November 21, 2007 The Tragedy of the Commons *By* *John
Stossel*<http://www.realclearpolitics.com/articles/author/john_stossel/>

Every year around this time, schoolchildren are taught about that wonderful
day when Pilgrims and Native Americans shared the fruits of the harvest.
"Isn't sharing wonderful?" say the teachers.

They miss the point.

Because of sharing, the first Thanksgiving in 1623 almost didn't happen.

The failure of Soviet communism is only the latest demonstration that
freedom and property rights, not sharing, are essential to prosperity. The
earliest European settlers in America had a dramatic demonstration of that
lesson, but few people today know it.

When the Pilgrims first settled the Plymouth Colony, they organized their
farm economy along communal lines. The goal was to share everything equally,
work and produce.

They nearly all starved.

Why? When people can get the same return with a small amount of effort as
with a large amount, most people will make little effort. Plymouth settlers
faked illness rather than working the common property. Some even
stole<http://tinyurl.com/yr9d8b>,
despite their Puritan convictions. Total production was too meager to
support the population, and famine resulted. Some ate rats, dogs, horses and
cats. This went on for two years.

"So as it well appeared that famine must still ensue the next year also, if
not some way prevented," wrote Gov. William Bradford in his diary. The
colonists, he said, "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. At length after much debate of things, [I]
(with the advice of the chiefest among 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."

The people of Plymouth moved from socialism to private farming. The results
were dramatic.

"This had very good success," Bradford wrote, "for it made all hands very
industrious, so as much more corn was planted than otherwise would have
been. ... By this time harvest was come, and instead of famine, now God gave
them plenty, and the face of things was changed, to the rejoicing of the
hearts of many. ... "

Because of the change, the first Thanksgiving could be held in November
1623.

What Plymouth suffered under communalism was what economists today
call the tragedy
of the commons <http://tinyurl.com/4xobe>. But the problem has been known
since ancient Greece. As Aristotle noted, "That which is common to the
greatest number has the least care bestowed upon it."

When action is divorced from consequences, no one is happy with the ultimate
outcome. If individuals can take from a common pot regardless of how much
they put in it, each person has an incentive to be a free rider, to do as
little as possible and take as much as possible because what one fails to
take will be taken by someone else. Soon, the pot is empty and will not be
refilled -- a bad situation even for the earlier takers.

What private property does -- as the Pilgrims discovered -- is connect
effort to reward, creating an incentive for people to produce far more.
Then, if there's a free market, people will trade their surpluses to others
for the things they lack. Mutual exchange for mutual benefit makes the
community richer.

Secure property rights are the key. When producers know that their future
products are safe from confiscation, they will take risks and invest. But
when they fear they will be deprived of the fruits of their labor, they will
do as little as possible.

That's the lost lesson of Thanksgiving.