The story goes that when the Pilgrims landed at Plymouth, they set up a socialist economic system that quickly failed, whereupon they embraced capitalism and began to thrive.
But that narrative is incomplete. What they really did was try to infuse socialism onto a capitalist model—or what we might call the Bernie Sanders economic plan. After just a few years of Bernie-nomics, the colonists—those who survived, anyway—recognized their mistake and changed course.
Before they left for the New World, the Pilgrims formed a partnership with London-based merchants, a joint-stock company. As economist Murray Rothbard explains, “In this alliance, each adult settler was granted a share in the joint-stock company, and each investment of 10 pounds also received a share. At the end of seven years, the accumulated earnings were to be divided among the shareholders.”
But the Pilgrims also embraced a type of “from each according to his ability, to each according to his needs” socialism that would make Sanders proud.
As Governor William Bradford explained in his diary of events, which is published under the title “Of Plymouth Plantation,” the “adveneturers & planters” over the age of 16 agreed “that all such persons as are of this colony, are to have their meat, drink, apparel, and all provision out of ye common stock & goods.”
Fortunately for them, and for us, the Pilgrims realized after a few years of socialism that there would be no capital and profits. Even worse, there might not be any people. Writes Bradford:
The failure of that experiment of communal service, which was tried for several years, and by good and honest men, proves the emptiness of the theory of Plato and other ancients, applauded by some of later times, that the taking away of private property, and the possession of it in community, by a commonwealth, would make a state happy and flourishing; as if they were wiser than God.
The inability to profit within a reasonable time, rather than seven years in the future, meant that a number of those on Plymouth Plantation became slackers and didn’t carry their shares of the workload. As a result, the whole group began to starve and many died.
Bradford explains that their solution was to dump socialism and embrace a more individualistic form of capitalism:
So they began to consider how to raise more corn, and obtain a better crop than they had done, so that they might not continue to endure the misery of want. …
At length after much debate, the Governor, with the advice of the chief among them, allowed each man to plant corn for his own household. …
So every family was assigned a parcel of land, according to the proportion of their number. …
This was very successful. It made all hands very industrious, so that much more corn was planted than otherwise would have been by any means the Governor or any other could devise, and saved him a great deal of trouble, and gave far better satisfaction.
So the Pilgrims weren’t true socialists; they were hoping to reap profits from their labors. What they tried was to infuse socialism onto a capitalist model. But they realized in just a few years that their hybrid system wouldn’t work. They starved under Bernie-nomics.
If modern Americans make that same mistake in 2016, we’ll have to wait at least four years before we can change the system.