Thanksgiving’s economics lesson » Business » The Edmond Sun
11/19/12 9:38 AM
November 18, 2011
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Thanksgiving’s economics lesson
(http://www.edmondsun.com/business/x1265051657/Thanksgivings-economics-lesson)
Special to The Sun (http://www.edmondsun.com)
EDMOND — The following is a repeat of a Thanksgiving column I ran several years ago, but the message is
still fresh and relevant today.
Thanksgiving is a wonderful holiday that brings friends and families together. Food and football are often the
order of the day, as well as catching up on the all the latest. It also gives us an opportunity to take a break
from our busy lives to contemplate the things we are thankful for.
But there is an economics lesson from Thanksgiving that many are not aware of. Most of us learned the
origins of Thanksgiving in elementary school and we probably all participated in some type of play telling the
story of the Pilgrimsʼ first bountiful harvest. But what most people donʼt know is how the Pilgrims actually
solved their chronic food shortage problem.
The common story is that after suffering through a severe winter, the Pilgrimsʼ food shortages were resolved
the following spring when the Native Americans taught them how to plant corn. The result was a great
harvest and a Thanksgiving celebration. The real story is that the Pilgrims continued to face chronic food
shortages for three years until the harvest of 1623. It was not bad weather or lack of farming skills that
caused the food shortages. Poor economic incentives did.
Plymouth Plantation was founded in 1620 with a system of communal property rights, not traditional
property rights. Perhaps this was our first socialist society. Food and supplies were held in common by the
community and then distributed based on equality and need as determined by plantation officials. Everyone
received the same rations whether or not they contributed to producing the food, and residents were not
allowed to produce their own food.
In his 1647 history “Of Plymouth Plantation,” Gov. William Bradford wrote “that this system was found to
breed much confusion and discontent and retard much employment that would have been to their benefit
and comfort. The problem was that young men, that were most able and fit for labor, did repine that they
should spend their time and strength to work for other menʼs wives and children without any recompense.
Because of the poor incentives, little food was produced.” In more modern language, people got tired of
working hard to support others who did not contribute or do their fair share of the work. Sound familiar?
Faced with potential starvation in the spring of 1623, the colony decided to start a new economic system.
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Thanksgiving’s economics lesson » Business » The Edmond Sun
11/19/12 9:38 AM
Every family was assigned a private parcel of land. They could keep everything they grew for themselves
but now they alone were responsible for feeding themselves. While it was not a complete private property
system, the move away from communal ownership had dramatic results.
Bradford wrote, “This change had very good success, for it made all hands very industrious, so as much
more corn was planted than otherwise would have been. Giving people economic incentives changed their
behavior. Once the new system of property rights was in place, 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.”
Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted
one with greater individual property rights and incentives, they never again faced the starvation and food
shortages of the first three years. It was only after allowing greater property rights that they could eat without
worrying that famine was just around the corner.
You could say that today we are all beneficiaries of the economics lesson the Pilgrims learned in 1623. Our
free market economic system of today offers incentives for us individually as well as for the mutual benefit of
all.
As we give thanks for our Thanksgiving meals this year, perhaps we also should be thankful for the millions
of other hands that helped get the dinner to the table. They all contributed to our Thanksgiving dinner
because our economic system rewards them. As you think of the Pilgrims and the first Thanksgiving, now
you have one more reason to be thankful. The economic incentives provided by free market economics and
private competitive markets where people are left free to make their own choices make bountiful feasts
possible. Happy Thanksgiving and thanks for reading.
NICK MASSEY is a financial adviser and owner of Householder Group Financial Advisors in Edmond.
Massey can be reached at www.nickmassey.com (http://www.nickmassey.com) . Securities offered through
Securities Service Network Inc., member FINRA/SIPC.
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Thanksgiving’s economics lesson » Business » The Edmond Sun
11/19/12 9:38 AM
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