The First Americans
by Jim Davies, 4/1/2011
I refer to the first European settlers here, not strictly to the first of all. The latter had been nomads in the least hospitable climate on Earth for twenty or thirty thousand years, in Siberia; then in two waves in and soon after 15,000 years ago made their way across what was then the Bering land bridge into the Americas. They spread all the way South, some settling and others continuing. Aztecs, Incas and today's "native Americans" are their descendants.
Then a millenium ago came Leif Ericsson, briefly, to Canada - and back again to Iceland, eh? - until the better known Columbus landing and the European settlements. Prominent were the colonisations at Jamestown in 1607 and at Plymouth in 1620.
Both groups made the same, colossal blunder: they practised communism, and therefore very nearly starved to death. In his commendible How Capitalism Saved America, Thomas DiLorenzo remarks that of the first 104 to settle in the highly fertile land around Jamestown, 66 were dead within a year, for want of food. In a classic demonstration of lunacy (repeating an action already proven ineffective) the next wave of 500 settlers in 1609 did the same thing and 440 of them died within a year, from malnutrition and disease. But they were not Communists, as such; the modern use of the word had not been invented. They did however follow the socialist formula for disaster, "to each according to his need, from each according to his ability" and the result was as it always has been whether there, in Paris 180 years later or Moscow 320 years later or in North Korea today and numerous African examples during the last century (currently, Zimbabwe.)
Even though the "starving time" of the Jamestown catastrophe was well known in England, incredibly the Plymouth "pilgrims" followed the same pattern; those who could work, were supposed to work for the good of all - the "common wealth" - and not for their personal profit. They did not have personal property rights in the fields where they labored. So - surprise, surprise - they worked only when so inclined, even though most of the young men were skilled and experienced farmers. Result: half of the first 100 to settle there were dead within a year. Whenever producers are separated from the rewards of their work, they cease to produce. Atlas shrugs.
I'd long assumed that these absurd examples of social organization resulted from religious beliefs, but it wasn't so. Nor did they come from political ones, for doctrinaire socialism was a long time in the future. Rather, the reason is simple, though tragic: the settlers were financed by investors, who reasoned that they must be held by contract to produce for them primarily (eg the Virginia Company) and not for themselves; that if the settlers were allowed to have rights to their own property, the investors would never see a return for their money. Unhappily, they got it exactly upside down. They completely failed to see the relation between property ownership and production; they did not understand motivation. Consequence: they lost their RoI, and many of the settlers lost their lives.
It was turned right around, first in Virginia when in 1611 Sir Thomas Dale tried allocating land to individual families to farm, taking a fraction of what they produced to compensate the investors; the result was a spectacular success. The solution, so obvious to us, seems to have been a desperate measure undertaken because nothing else worked; if so, it might be said that American capitalism was found by accident. Certainly, news of it did not impress the investors funding the Plymouth colony, for the discovery had to be made all over again by Thomas Weston their representative, and William Bradford the governor; but after finding and implementing it, Americans in New England also never looked back.
The fact is that all the subsequent, dramatic success of Americans sprang from the simple principle that somebody working has the right to keep the product of his labor and to own outright the resources (of land, etc) used to produce them. Individuals were no longer servants, but proprietors. Those property rights are everywhere fundamental and are damaged at our peril.
They have, however, been severely and progressively damaged, especially during the last hundred years. Taxation has ravaged them increasingly; 100 years ago the total tax grab was of 9%; today it is over 45%. "Property tax" guts the whole meaning of ownership; nobody any longer owns any real estate, for occupation is contingent on the annual payment of a serf's tribute to local government. Almost half the product of our labor is stolen and handed to people who did not earn it, exactly as was done during the "starving time." The lessons so expensively learned in the early 17th Century are being tossed away as if they didn't matter. They do.
In the coming zero government society, they will be fully restored and therefore prosperity growth will proceed at a pace not matched even by the first Americans.