The Tragedy of the Commons
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, 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 aftermuch 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.