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Author Topic: The Economic Lesson of the Pilgrims
Charles
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This was circulated recently by Scott Anderson of the Platinum Lending Group, Platinum Properties International, Irvine, California.

It's an interesting description of how the economic system of North America evolved from the English settlers at the colony at Plymouth in what later became the State of Massachusetts. The Pilgrims who started the holiday we celebrate in November in the US.

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## The Economic Lesson of the Pilgrims ##

WE KNOW HOW they suffered, that first year in the place they called Plymouth. We know about the bitter winter of 1620-21, when food and shelter were so inadequate that most of the small company grew sick and half - 50 out of 101 - never recovered. We know how the survivors struggled to get the seeds they had brought to grow in the stony Massachusetts soil and how they might have starved if friendly Indians hadn't taught them to plant corn. And we know how grateful they were for the first small harvest they managed in the summer of 1621, and for the abundance of fish and game with which they were able to supplement it.

It was to celebrate that initial harvest that Governor William Bradford authorized a community feast and invited the neighboring Indians - Chief Massasoit and about 90 of his warriors - to "rejoice together" over venison and wild fowl. "All had their hungry bellies filled," Bradford would later write in his magisterial history, "Of Plymouth Plantation." Today we look back to that harvest feast of 1621 as the first American
Thanksgiving.

But 1621 wasn't a turning point, and the celebrants at that "first Thanksgiving" didn't celebrate for long. Bellies were soon hungry again. The fact is, Plymouth Plantation was failing - and not because of bad weather or stony soil.

It was human nature, not Mother Nature, that threatened the settlers with destitution. Plymouth had been established as a commune, and the terms of the agreement, signed before the Mayflower sailed, were strict: "All profits and benefits that are got by trade, traffic, trucking, working, fishing, or any other means" were to become part of "the common stock." Further, "all such persons as are of this colony are to have their meat, drink, apparel, and all provisions out of the common stock and goods of the colony."

In other words, there was to be no private ownership. No one would be laboring to benefit himself or his family; no one would have any incentive to work harder. Whatever any individual produced would belong to all, and he would be entitled to get back only what he and his family needed. As Karl Marx would put it 255 years later, "From each according to his abilities, to each according to his need." Communism failed in 20th-century Europe and China. It fared no better in 17th-century Massachusetts.

The system "was found to breed much confusion and discontent and retard much employment," Bradford recorded. "For the young men that were most 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 ... had no more in division of victuals and clothes than he that was weak and not able to do a quarter [of what] the othecould; this was thought injustice.... 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."

Bad attitude led to bad crops - and worse. "Much was stolen both by night and day," Bradford wrote of the 1622 harvest. "And although many were well whipped ... yet hunger made others, whom conscience did not restrain, to venture." It became clear that unless something changed, "famine must still ensue the next year also."

To their credit, the settlers recognized that their problems resulted from the lack of private property, which was stifling productivity and bringing out the worst in their characters. And so in the spring of 1623, communism was replaced with capitalism.

"At length, after much debate of things, the governor" - Bradford meant himself - "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.... This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise.... The women now went willingly into the field and took their little ones with them to set corn."

The results were striking. In 1621, the colony had planted just 26 acres. In 1622, it planted 60. But in 1623, with families now working for themselves, 184 acres were planted. (The figures come from economist Judd W. Patton of Bellevue University, whose fine essay on the Pilgrims' progress is on the Web site of Bellevue's economics department.)

When the harvest season came, Bradford later wrote, "instead of famine, now God gave them plenty, and the face of things was changed to the rejoicing of the hearts of many, for which they blessed God." The effect of switching from communal to private property "was well seen," Bradford noted - so much so that "any general want or famine hath not been amongst them since to this day." Before long, Plymouth was exporting corn.

The great lesson of Plymouth's early years is that the key to prosperity is private property and a free market. It was a crucial insight, whose blessings we continue to reap to this day. Let us be thankful.


## "...and now for the rest of the story" ##

This article is reprinted from The Boston Globe of November 28, 2002. A very similar version reporting the same quotations appeared in the Orange County Register on November 24, 1994.

The story of the Thanksgiving feast is woven into the historical fabric of our country. While we focus on and reenact that feast it is equally if not more important that we remember to celebrate the profound insight and unique lesson of the Thanksgiving feast—that property rights and free markets make America "the shinning light on the hill" that it is to the world.

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Scott Anderson is a CERTIFIED FINANCIAL PLANNER
practitioner specializing in financial planning and real estate. Scott Anderson is a loan officer in the Private Client Group at Platinum Properties in Newport Beach and Irvine, CA and has been elected to the Board of Directors of the Orange County Chapter of the Financial Planning Association.

He is also a member of the Financial Executives Institute, an associate member of the California Society of CPAs, and serves as an Adjunct Professor in Accounting in the MBA program at Pepperdine University.

The opinions of this newsletter are those of Scott Anderson who is solely responsible for its content. This newsletter is for educational purposes for financial, investment, and financial planning professionals only and should not be construed as providing advice to readers.

------------------------------------------------------------

Written and Edited By
Scott Anderson CFP
Providing Financing to
California Home Buyers

Platinum Lending Group
(Platinum Properties International)
3500 Barranca Pkwy #100
Irvine, Ca 92606
949-422-3484

© Copyright 2003-2004, The J. Hartman Company

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Twedzel
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I thought you weanted to stay away from political discussions...

Anyway I just listened to an amazing series on the nature of progress. Part of the Massey lecture series. Basically it was an discussion of the Western ideals of progress from an anthropological point of view. One point he made is that agriculture has been the single most profound system of progress for modern man. It has allowed us to reproduce and cover the globe. But he noted that the only factor that has allowed for agricultures exsistance has been the fact that the planets weather has been relatively stable for the past 10 or 20 thousand or so years (I forget the more exact time length involved but it matches exactly with the level of human progress). The theory being agriculture only advanced at the time when agriculture was allowed to advance itself climatically speaking. From what geologists have figured out by studying layers of rock and sediments that this climatic stability is highly unussual and allready unussually long. The planets climate in the past has had wide and eratic shifts that would make establishing crops nearly impossible, especially crops to feed the billions of us around today. Apparently these climate shifts can take as little as a decade to come about. What the lecturist pointed out is that man has a great ability to adapt, but culturally we are incapable of using far vision and insight. We are basically stone age people with alot of handy gadgets. It goes along way to explain why the world is so fuked up. So the climates shifting from pollutants or naturally or both. But either way sharpen those spears we may need them in our life time... Happy Thanksgiving.

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Twedzel
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Anouther interesting point in the continuation of the series.

All empires civilisations success and failure can be directly linked to the land they were set upon. The leacturer cited examples from the Egyptian, Roman, Mayan, Han dynasty in China, and Easter Island civilisations. Each at their height was a dynasty. But each also eventually destroyed the land they rellied upon. Just as we are doing now. With the exception of Easter Island (little is known of their civilisation) each of these dynasties did something odd as they came closer to crumbling. The concentration of the wealth grew disporportionatly upwards to the point where the rich poor divide was exceptional. No lie either, in each case the leadership became increasingly conservative to the point of extremism. While resources dwindled... the leadership actually expanded 'empirical' projects such as the building of monuments and engaging in foreign wars. The Egyptian dynasty lasted so incredibly long because their population growth was kept low by the unpredictable nature of their growing seasons (feast/famine) and the annual flooding of the Nile prevented them from developing their most fertile land. In the Roman case, they developed on their own farm lands and were consequently dependant on farther off sources of grain. Deforestation contributed to soil errosion in topsoil which was allready being harvested to its maximum potential. The subsequent failure of these farm lands eventually contributed to if not destroyed their empire. The crumbilng of their heartlands ability to provide Rome with grain exacerbated the rich poor divide and destabalised Romes ability to govern its empire. Another lesson we have not learned. We have developed some of our best farm land into suburbs and top soil degredation from our farming practises is happening at an alarming rate. You know what they say, 'if you don't learn from history you are doomed to repeat it'. We are intimately tied to the lands ability to support use.

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SpudLass
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Those who fail to learn from history are doomed to have it rewritten by CPAs.
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SNAKEBITE
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I lived in a farming community through high school. Moved in with my dad around that age.
Brentwood, Contra Costa County, central california area. population 4500 when i moved there. 17 years later, something like 100,000 with three high schools. Some of the best farms with the best peaches, cherries, white corn on the planet were plowed over for ugly ass track homes. Before I moved I saw them slowly coming over the hills like bacteria.was known as the fastest growing town in California for years...when I was there you could ride your bike to school...now theres no room to park your bike because of all the baby strollers.

yeah, privately owned land is great. I wish to have some one day...I hope to have other options besides ugly ass track homes, but yeah private is good...

one thing about this happy thanksgiving story is that these settlers where all farmers. made their own way of life...well, untill more people showed up and everyone needed more...then they just committed genocide to get some more private land...nothing is free is this life.


[Big Grin]

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