Was America once socialist? Surprisingly, yes. The early settlers who arrived at Plymouth and Jamestown in the early 1600s experimented with socialist communes. Did it work? History professor Larry Schweikart of the University of Dayton shares the fascinating story.
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Americans didn’t invent free market capitalism. But you might say they perfected it.
In doing so, they created more wealth for more people than any society in the history of the world. To begin to understand this fascinating and complex story, we have to travel back in time to the very first settlers of America.
But before we get to the history, let me define what I mean by capitalism. It’s not an easy term to pin down because it developed over thousands of years of human interaction. Adam Smith, the great English thinker, first described it in his famous 1776 treatise, The Wealth of Nations, but he didn’t invent it.
For our purposes here, I define capitalism as an economic system in which individuals freely decide what they will produce and who they will serve. Since both parties have to consent, it’s a system in which success demands that you serve the needs of others before you are rewarded for your work.
Now back to history:
When the first settlers arrived—at Jamestown in 1607 then Plymouth in 1620—they were operating under an economic system common to all European nations at that time, known as mercantilism. Under mercantilism businesses, especially in colonies, were operated for the benefit of the state. While governments permitted the companies to make profits, their primary purpose was to advance the national interest of England or Spain or France. The early American settlements were set up to be self-sufficient so that the English government didn’t have to support them. And they had to stake out territory. That was key to the colonial game: if England held the territory, Spain and France didn’t.
The early colonists began their adventure with what they thought was a beautiful idea. They set up a common storehouse of grain from which people were supposed to take what they needed and put back what they could. Lands were also held in common and were worked in common. The settlers owned no land of their own. Though there was no name for this system, it was an ideal socialist commune. And you can probably guess what happened. It began to fall apart almost immediately. As the colonists learned, when everyone is entitled to everything, no one’s responsible for anything. A colonist who started his workday early or stayed late received the same provision of food as a colonist who showed up late, went home early, or didn’t work at all.
After about two years, the settlement was reduced to eating shoelaces and rats. Half of them died of starvation. Captain John Smith (of Pocahontas fame) took control of the colony and scrapped the socialist model. Each colonist received his own parcel of land. Private property had come to the New World. “He who won’t work, won’t eat!” Smith told them, citing the Biblical admonition. Well they worked. And they ate. And the colony was saved.
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