Economic significance of observing Thanksgiving

Christopher Lingle, Ubud, Bali

As a native-born American who has lived or lived in many parts of the world, I know there is much to be thankful for. Perhaps this year, as never before, there are reasons to reflect upon the bountiful blessings Americans share during annual celebrations of Thanksgiving.

While most Christians consider Thanksgiving to be a religious holiday, others recognize the day for its broad secular appeal that unites all Americans. In all events, that divine intervention may not have been at work on the first occasion for this celebration.

As it turns out, the abundant harvest that gave cause for worshipful praise apparently had more worldly causes. Indeed, the first Day of Thanksgiving associated with the Pilgrims was made possible by changes in the economic system that had guided activities in their colony.

To fully understand this assertion, one has to consider an accurate account of the Pilgrim's progress. In the first instance, some historical misperceptions need to be cleared up.

Every American school child knows that in November 1620 a band of 103 Pilgrims landed in Massachusetts and founded New Plymouth. Many Americans seem to recollect, or were taught incorrectly, that the Pilgrims celebrated the first Thanksgiving with their Indian friends.

While there was a three-day feast that took place after a shooting party in the fall of 1621, it was not the first Thanksgiving Day. Although many Pilgrims owed thanks to local Indians who taught them indigenous practices, like fertilizing corn with fish, the original Thanksgiving did not include their aboriginal friends.

The harvest that was celebrated at the first Thanksgiving occurred later, after the Pilgrims abandoned a form of agricultural socialism they had implemented upon their arrival. In large part, the first Thanksgiving was a celebration of the bounty arising from the pursuit of individualism and incentives associated with free markets.

Background for understanding Thanksgiving Day is found in records kept by the governor of the colony, William Bradford. He informs us that the Pilgrim's English sponsors arranged for all crops and trade goods to be held "in the common stock" from which they would be supplied, reflecting the religious beliefs of the colony.

As with many other recorded applications of communalism, there were disastrous results. Governor Bradford wrote that this experiment reflected a belief that common ownership of property would allow the colony to flourish. Instead, it was soon found that communal sharing resulted in unintended consequences. The Pilgrims, as the Soviets were to discover several centuries later, found that individuals work harder under an incentive system that allows them to maintain and enjoy the direct fruits of their labor.

The Pilgrim's initial experience mirrored the unfortunate experiment in Jamestown, where half the original settlers either starved or fell victim to disease. With the Pilgrims facing the prospects of a famine in the early months of 1623, they called a meeting to look into ways to escape near-certain death by starvation.

Their decision was to abandon their communist arrangement for the distribution of goods on the basis of "from each according to their means, to each according to their needs." Instead, according to Bradford, from then on, "they should set corn every man for his own particular need."

These new arrangements provided only a limited form of property rights, since land continued to be held commonly. Nonetheless, each family had a parcel of land to cultivate, and they could keep what they grew, even if they could not deed the land to their heirs. (Similar agricultural reforms were initiated in China in 1978 under the direction of Deng Xiaoping. After centuries of cycles of famine, China now self-sufficient in many foods and is a net exporter in others.)

Although it was recorded that the American colonists exhibited a dramatic increase in their industriousness, these were offset following summer by the effects of a drought. Following the convictions of their religious beliefs, they offered appropriate contrition for their sins. Then the drought broke and their harvest was saved.

And so it was that the Pilgrims set about to celebrate a "day of thanksgiving," that Americans continue to celebrate to this day. Their new economic system that relied upon individual efforts insured that they would be able to produce enough food for the future. This system continues to thrive within the system of freedoms enshrined in America's national heritage.

Thanksgiving, as celebrated today, should not be limited to a remembrance of the Pilgrim's offering of thanks to their God for the rain that saved their crops. It is also an opportunity to remember the institutions of individualism and private property and liberty that made America great and provide Americans with the means for this greatness to continue into the future.

The writer is a professor of economics at Universidad Francisco Marroqumn and Global Strategist for eConoLytics.com.