The Pilgrims’ Real Thanksgiving Lesson

ThanksgivingWith Thanksgiving upon us once again, we offer a reminder of the economic lesson that made our first Thanksgiving possible:

The Pilgrims’ Real Thanksgiving Lesson
by Benjamin Powell

Feast and football. That’s what many of us think about at Thanksgiving. Most people identify the origin of the holiday with the Pilgrims’ first bountiful harvest. But few understand how the Pilgrims actually solved their chronic food shortages.

Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did.

In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on “equality” and “need” as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, 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 labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense.” Because of the poor incentives, little food was produced.

Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.

This change, Bradford wrote, “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, 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 feast without worrying that famine was just around the corner.

We are direct beneficiaries of the economics lesson the Pilgrims learned in 1623. Today we have a much better developed and well-defined set of property rights. Our economic system offers incentives for us—in the form of prices and profits—to coordinate our individual behavior for the mutual benefit of all; even those we may not personally know.

It is customary in many families to “give thanks to the hands that prepared this feast” during the Thanksgiving dinner blessing. Perhaps we should also be thankful for the millions of other hands that helped get the dinner to the table: the grocer who sold us the turkey, the truck driver who delivered it to the store, and the farmer who raised it all contributed to our Thanksgiving dinner because our economic system rewards them. That’s the real lesson of Thanksgiving. The economic incentives provided by private competitive markets where people are left free to make their own choices make bountiful feasts possible.

Giving Thanks for Stores that Open on Thanksgiving

thanksgivingIt’s that time of year again. Thanksgiving is upon us. Tomorrow, millions of us will join together with friends and family to celebrate the Holiday. The day after, “Black Friday,” kicks off the holiday shopping season with a variety of sales.

Once again, these sales are bringing controversy with them. It’s not the fact that these sales are taking place, but when.

Every year we see the same uproar surrounding Thanksgiving and Black Friday sales. That is, many stores are opening on Thanksgiving Day as part of their holiday promotions. Many individuals take issue with these policies, arguing that opening stores on Thanksgiving corrupts a holiday that’s all about spending time with family and friends.

In particular, we see that many people claim its wrong for retailers to “force” workers to come in on the holiday. Last year, I discussed how some lawmakers have even suggested a ban on retail sales Thanksgiving Day, claiming such laws would protect workers from their profit-hungry employers.

While it’s understandable that many people want to spend their holiday with loved ones, banning stores from operating on Thanksgiving is a bad idea for employers and employees alike.

First, it’s important to understand why retailers choose to operate on Thanksgiving Day. They do so because their consumers demand it. By catering to what consumers desire, companies look to profit.

But what about our poor worker? Many people don’t really care about the wellbeing of the individuals who run companies. They claim to be worker advocates. Certainly, those working on Thanksgiving are being exploited by their cruel employers?

While working on Thanksgiving may not be a worker’s first choice, it’s hardly akin to Bob Cratchit working for Ebenezer Scrooge. Not only are workers paid for their time, but many will earn extra wages because they are working on a federal holiday (when I worked retail it was 1.5x).

For some people, working on Thanksgiving may be an absolute blessing. The chance to earn extra money for holiday shopping or bills provides many people with much needed income. Taking away the opportunity to work on Thanksgiving is like pulling money out of people’s pockets. If someone is unable to be with family or friends for the holiday, working may be strongly preferred to a day at home on the couch. Everyone knows at least one person who thinks of spending time with his or her extended family as a special layer of Hell. For these people, having the option to work can be a saving grace. “Sorry, Uncle Lester, I’d love to hear about your trip to the lake for the 900th time, but I have to work.”

Many of us choose to use Thanksgiving for spending quality time with friends and family. Without a doubt, there are some people who will work tomorrow that may prefer to be at home. But banning retailers from opening on Thanksgiving may do more harm than good. Workers, stores, and consumers all lose.

There is another important point to consider for those of us who value liberty. That is, forcing stores to close on Thanksgiving (or any other day for that matter), is nothing more than imposing our preferences on other people. Forcing stores to close on Thanksgiving because it cuts against some peoples’ ideals of “family time” is no different than laws that currently prohibit selling alcohol on Sundays in a variety of states. We’d say such laws infringe upon our rights as consumers and the rights of sellers and we’d be right. Complaining about stores opening on Thanksgiving is fundamentally the same.



Police Take More Property from People than Burglars

PoliceMost readers of The Beacon are probably familiar with the rise in civil asset forfeiture, which gives police the power to seize property they claim was used in criminal activity, often without accusing the property owner of a crime. They don’t have to. It’s up to property owners to prove they are innocent to get their property back.

Martin Armstrong posts on his blog that in 2014 property taken through civil asset forfeiture exceeded the value of property taken by burglars. This article analyzes that claim in more detail, and it appears that the statistics Armstrong uses actually undercount the losses from civil asset forfeiture. For one thing, he only looks at civil asset forfeitures by the federal government.

It is unsettling to think that the property of Americans is more at risk from being confiscated by police than being stolen by burglars.

How Lord Acton Trumps George Orwell in The Hunger Games

Katniss Everdeen makes a choice in a pivotal scene in Mockingjay, the third book in The Hunger Games trilogy by Suzanne Collins, that had the potential to elevate her into the pantheon of pro-freedom heroines in contemporary fiction. Unfortunately, neither the book nor the movies leveraged this act to let Everdeen step onto that podium, much to the chagrin of libertarians (including myself) who had hoped for more. Indeed, in previous blog posts, I suggested that The Hunger Games might be the Millennial Generation’s version of George Orwell’s classic 1984 (see here, here, and here). After reading the trilogy and watching all four movies, I no longer think the series holds that promise.

In fact, the fourth installment of the movie series, The Hunger Games: Mockingjay, Part 2, does even more to dispel any notion that Katniss Everdeen is anything more than a survivor (albeit a heroic one) trapped in a world controlled by the State. She eschews any leadership role or place in the revolution for freedom, making her quest a personal one rather than a blow for a higher principle or value. She is fighting against tyranny, but she doesn’t have much of an alternative to offer. This takes her out of the running as a true leader able to galvanize others around a common idea (and reduces her value as a strong female character as well).

Nevertheless, the pivotal scene in Mockingjay (and the movie Part 2) is worth discussing because it reflects a critical plot point in Katniss Everdeen’s character arc and the decision she makes would likely have pleased Lord John Acton (1834-1902). On the surface, Katniss accepts a Faustian bargain for the privilege of executing the secular tyrant President Snow. Indeed, this is her goal since she recognizes that as long as Snow is alive the Capitol and its ideas never will be truly dead. She accepts, it seems, a deal with rebel president Alma Coin to hold one last Hunger Games featuring the children of the Capitol District. It’s a cynical effort by Coin to channel the bloodlust of the rebellion as a way to pave a road to peace, or at least that’s what Katniss and her peers are led to believe. 


U.S. Department Flunks Data Security...Again

computerEarlier this week the full House Committee on Oversight and Government Reform blasted the U.S. Department of Education for its lax security surrounding student data. But this isn’t the first time ED’s been taken to the woodshed.

The Government Accountability Office (GAO) reported in 2011 that ED still hadn’t implemented security controls recommend in 2009 by its own Education Office of the Inspector General (IG). And, just this week the GAO again documented ED’s numerous information security weaknesses and deficiencies.

As. Rep. Mark Meadows (R-NC) summed up, “You know, the headline should read: ‘Department of Education Gets an F’.” (Starting at 46:31, first video)


Rosa Parks Day: The Triumph of Colorblindness and Capitalism

jb_modern_parks_1_eSixty years ago, Rosa Parks refused to give up her bus seat to a white man and was arrested for disobeying Montgomery, Alabama’s segregation ordinance. The story is well-known, even today, as we celebrate “Rosa Parks Day” (December 1). Following her arrest, African Americans organized a boycott of the city’s privately-owned bus company. Martin Luther King, Jr. became spokesman for street protests and, ever since, the civil rights movement is remembered as a militant expression of civil disobedience and “taking it to the streets.” Within a year, the city ended desegregation, but not for the reasons you might think. The real heroes behind Rosa Parks were the NAACP lawyers who battered down the walls of institutional racism with the force of the constitution, color-blind law, and capitalist forces that worked against racism—hallmarks of the classical liberal tradition of civil rights.

Laws segregating the races created separate spaces for each: separate bathrooms, water fountains, schools, theaters, and even beaches. Trolley cars and buses posed a challenge because it was economically impracticable to run separate bus lines; one for whites, the other for blacks. Therefore, as virulent white racism swept the South in the 1890s, cities passed ordinances requiring private bus companies to create separate sections for blacks and whites. As I demonstrate in Race and Liberty in America: The Essential Reader, bus companies strongly opposed this interference with their business. Company drivers would have to identify who was black or white. Furthermore, the creation of white and “colored” sections forced the bus companies to eliminate a benign form of segregation that they had created in response to consumer demand: a section for nonsmokers (smokers, not blacks, were relegated to the back of the bus). First-class “ladies” cars also had to go. Eliminating the “ladies” section placed respectable women next to prostitutes and male patrons who were not always gentlemen.


The Hobgoblin of Separation of Ownership and Control

CorporateThe Great Recession heightened people’s search for scapegoats. One common target was corporate management, accused of harming shareholders and consumers, rather than advancing their interests, with more government regulation put forward as the necessary solution. We saw it when the self-styled 99% blamed the 1% for their frustrations, when Hillary Clinton blamed weak economic growth on “quarterly capitalism,” and in other manifestations.

However, this line of argument is far from new. Its pedigree traces at least as far back as the doctrine of “the separation of ownership and control,” in Adolf Berle and Gardiner Means’ 1933 The Modern Corporation and Private Property.

The “separation of ownership and control” story focused on the widely dispersed ownership of corporations. In a nutshell, it argued that because corporate shares were spread among many small holders, no one had enough at stake to keep close tabs on corporate managers. Since managers knew that was the case, they could take advantage of shareholders, rather than advancing their interests. Therefore they did.


K-12 Course Choice: The Next Evolution in School Choice?

school1A fundamental tenet of parental choice in education is that students’ learning opportunities should be personalized rather than limited based on where their parents can afford to live. Online (or virtual) learning takes this concept even further by removing both geographical and temporal constraints.

This month The Evergreen Education Group released its 11th annual Keeping Pace with K-12 Digital Learning report. Findings were presented at the iNACOL [International Association for K-12 Online Learning ] Blended and Online Learning Symposium in Orlando.

Online and blended learning (a combination of traditional in-classroom and online learning) are important and growing parental choice options. According to Keeping Pace approximately 315,000 students in 35 states are attending fully online schools, an increase of more than 6 percent since the 2012-13 school year (p. 5).


Health Prices Continue to Rise Faster Than Others

October’s Producer Price Index declined 0.4 percent, month on month, and dropped 1.6 percent, year on year. Mild deflation continues to take hold in the general economy. However, it is not so in health care. Of the 14 sub-indices for health-related goods and services, only three declined month on month. Only six declined year on year (see Table I).

Outside health care, producer prices for both final and intermediate demand goods have declined precipitously since September 2014. This makes the increases in producer prices of health-related goods especially disturbing. Pharmaceutical preparations increased in price by 8.4 percent year on year, versus a 4.8 percent decline in prices of final demand goods. That is, using final demand goods as a baseline, prices for pharmaceutical preparations increased 13.2 percent! Price increases for other health-related goods have not been so dramatic.

Producer prices for health services are broadly moving in line with prices for other services. As I noted last month, what is interesting is the difference in the rate of inflation for hospital inpatient versus outpatient services. Outpatient prices are declining, while inpatient prices are rising, resulting in a gap.


We Need to End, Not Mend, the ESEA

schoolToday a House and Senate conference committee met to reauthorize the Elementary and Secondary Education Act (ESEA), which was last reauthorized in 2002 as the No Child Left Behind Act (NCLB).

There are numerous problems with the proposed compromise being considered (see here, here and here, for example).

But the bigger question we should be asking of Congress is why reauthorize the ESEA in the first place?

We’ve endured 50 years of federal meddling in elementary and secondary education, and we have scant (if any) hard evidence that DC politicians—whether it’s members of Congress, presidents or their education secretaries–know what’s best for other people’s children.