MythBusters Case#21b: Puritan Economics – Things To Avoid When Starting A Nation

Posted: October 10, 2012 in Church & State
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Once upon a time our Pilgrim forefathers sailed on the Mayflower and established a tiny village on the shores of Cape Cod.  Because their charter required all produce be kept in a common storehouse, a lot of them didn’t work very hard and half the colony starved to death in the winter.

The next summer everybody grew their own food in their own garden and they all had plenty to eat.  And that was how the Pilgrims learned the bitter lesson of socialism and free enterprise flourished in America happily ever after.

That little story has become a favorite of American Christians as they gather around their annual Thanksgiving tables.  Unfortunately, while the story is true the moral of the story is not.

The Puritan refugees, who settled 10 years later just up the coast in Boston learned little about economics from their Pilgrim brethren.  In fact, Puritan experiments with economic control and price fixing during their first half century in the New World were a primary factor contributing to the Declension of the Holy Commonwealth.

Ironically, these experiments drove the more worldly grandchildren of the pioneers to embrace a more Christian, capitalistic system of economics, but divorced from its Biblical base.  Thus, the Holy Commonwealth became associated with an unpopular system of social and economic control.  To the modern Christian mind, this unfortunate development has been obscured by the popular myth.

Myth:   After the disastrous winter of 1621, and the Pilgrims’ experiment with the common storehouse, the New England colonists abandoned socialism.

The story of the Puritan’s 50-year dalliance with a controlled economy was documented by Dr. Gary North in his doctoral dissertation in the early 1970s.  The work appeared originally as a number of short articles and then in book form in 1988.   MythBusters relied heavily on this research for purposes of the investigation of the Puritan economic experiments.

The Puritan end or goal was a Shining City Set on A Hill, a model of statesmanship to which all the world would look.  Concerning the laws of God, they sought to “keep and do them, for that is your wisdom and your understanding in the sight of the peoples who will hear all these statutes and say, ‘Surely this great nation is a wise and understanding people'” (Dt. 4:6).  This is the law as a tool of evangelism.

Unfortunately, their means did not match their ends.  Their application of the law was faulty.  Nowhere was this more apparent than in the realm of economics, in particular common ownership of land and price fixing.

Common Ownership

To secure their goal the Puritans tried to structure their new society so as to maintain maximum oversight by the church.  This extended to the physical layout of their towns and fields.  This was challenging because most were obviously farmers.

In order to keep everybody as close to possible to the church, all of the homesteads were located in town, with fields extending out in long narrow parcels.  Some of these extended out as far as two or three miles, often in a wedge or cone-shape.

This arrangement enabled the clergy and neighbors to hold one another accountable, but it was very inconvenient for farmers who had to waste a lot of time traveling to the farthest reaches of their fields.

Moreover, the legitimate desire for profit, led inevitably to animal husbandry in addition to simple agronomy.  Raising of crops was sufficient for little more than subsistent agriculture.  It was more profitable for farmers to increase their planting and utilize the grain to feed the livestock.

It was initially deemed more efficient to run all the livestock in a common pasture.  Less fencing would be required to keep the cattle out of the crops in a commons than in individual plots.  The unforeseen drawback was that individual cost-benefit analysis associated with private property was eliminated.

Thus there was strong incentive for individuals to take advantage of the benefits and shirk the costs.  Illicit benefits included midnight tree cutting and overgrazing.  Shirked costs were associated with keeping the fences repaired and compensating the herdsman.

All of this led to unenforceable regulation and bureaucratic wrangling that went on for half a century until the commons was distributed to private owners.  This inefficient use of public property has been called “the tragedy of the commons.”

Price Fixing

Puritan economic control went even further in attempting to establish the “just price” of various products by law.  This concept stemmed from the tension in Puritan social theory between a strong sense of diligence in one’s calling and unscrupulous exploitation.

Magistrates sought to regulate the tendency of men to slip over the fine line between devotion to their calling and avarice or greed.  The latter was said to find expression in price gouging or charging an “unjust price” for one’s produce.

The problem of course lies in defining exactly what is the just price.  It is the arrogance of the bureaucrat that tells him he is capable of such knowledge. The price fixing regulations took the form of caps on wages that could be charged by artisans and laborers and a 33% profit margin for businessmen.  This was America’s first excess profits law.

The immediate effect of this price fixing was suppression of productivity and an increase of demand over supply.  When officials deemed that citizens had learned their lesson the controls were relaxed, only to be imposed again later.  The cycle of economic disruption by price fixing  repeated itself endlessly until King Phillips War in 1675-76.

When the Puritans finally abandoned their heavy-handed control and price fixing, the economy boomed.  The unfortunate by-product was the self-sufficient Yankee of the third generation who now regarded the Holy Commonwealth of his grandparents as quaint, but impractical.

Case Closed:  MythBusters concluded that Puritan economics failed because it was not based on Biblical law.  Rather it was based on the early scholasticism and natural law reasoning of Thomas Aquinas.  Had the Puritans been more cognizant of Biblical law, their experiment would have succeeded because “all Scripture is given by inspiration of God…that the man of God may be perfect, thoroughly furnished for every good work” (II Tim. 3:16).

If the Puritans had paid attention to a few basic Biblical principles of economic theory they could have saved half century of grief.  As seen in the case of Ananias and Sapphira, God gives property to individuals to manage on His behalf (Acts 5:4).  In one of His parables Jesus established the principle that the private land owner has the right to set the wages for his laborers.

 

 

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