Bastiat’s Bastions

            Most Americans know the story of the first Thanksgiving and think about the Pilgrims and Indians and the feast.  Most Americans, we suspect, forget that when our forefathers landed on the shores of the Plymouth Bay Colony they established a communist economic system.  Out of a common product and storage, the settlers set up a rationing system.  During this time, many settlers starved to death, leaving the rest too weak to tend the crops.  To get out of this famine, a better system had to be found.  “And so assigned to every family a parcel of land…”

            This system had much better success because people were forced to work in order to survive.  Before, they were given food regardless of the time and energy they spent in the fields.  When people can see a direct result between their efforts and their rewards, when incentives are much higher, they work harder.  Pilgrims who had been practicing “farming in common” claimed illness or old age as excuses for not working began to farm eagerly on their own land. Soon, the Pilgrims grew such abundant amounts of food that they began bartering their excess with the Indians for pelts and furs.

            In China, we have seen the same thing happen.  Chairman Mao thought it wrong for one farmer to get richer than another just because he was able to work harder.  Mao set up a system of communal farms where food was shared among the farmers.  Few worked hard and little was grown.  Mao thought that this was as it should be.  In 1957, Mao said: “People say that poverty is bad, but in fact poverty is good.  The poorer people are, the more revolutionary they are.  It is dreadful to imagine a time when everyone will be rich.”  Of course, by maintaining a large number of “revolutionaries,” Mao maintained his power.  Mao also thought poverty was good for everyone but him, as he lived more luxuriously than Bill Gates does today.

            Well, in 1978 the peasants in Xiaogang village did not have nearly enough food to survive, which seemed odd because they had very rich farm land.  Mao’s policies, not the weather or anything else, created famine conditions by robbing them of incentives to work.  Mao was right that poverty would create revolutionaries, as these farmers clandestinely agreed to disobey Mao’s orders and each family was given its own plot of land.  They doubled the amount of land planted in rice and worked much harder, noting, “You can’t be lazy when you work for your family and yourself.”  Other villages soon copied the great success of Xiaogang.  Luckily for the people of China, Mao had died in 1976—had he been alive, he would have massacred these villagers.  The new leaders of China were more compassionate than Mao and ordered the end to communal farming.    The lesson here is that making everyone share reduces the amount to be shared, making us all equal, perhaps, but all equally poor.

            Have a Great Thanksgiving!  But remember when you go back for seconds, it was private property rights that makes both seconds and firsts possible. 

Reference: Sartell Prentice, Jr., “Our First Thanksgiving,” Foundation for Economic Education (November 23, 2005) at URL:  http://www.fee.org/in_brief/default.asp?id=106

Amanda Walker (4T Economics 211) and Morris Coats

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