Thanksgiving and Land Redistribution

One of the nice things about the internet is simply that word gets around - there's a lot of information to acquire, of course, but information acquisition is cheaper. So I assume most readers are well aware that in 1623 William Bradford ended a system of collective ownership of the corn production of Plymouth Colony, of course to the great benefit of Plymouth. If you're not aware of why collectivism doesn't work, you need to read this blog (and other economics blogs) more closely! If you're not aware of this particular Plymouth Colony episode, let me know in the comments and I can dig up a few old links.

Assuming that's all common knowledge, I wanted to highlight one very specific element of Bradford's privatization effort: the land redistribution. In his book Of Plymouth Colony he writes:

"At length, after much debate of things, the Governor (with the advice of the chiefest amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other things to go on in the general way as before. And so assigned to every family a parcel of land, according to the proportion of their number, for that end, only for present use (but made no division for inheritance) and ranged all boys and youth under some family."

It's hard to overstate the centrality of land policy for the early United States, and for classical liberals in general. While this blog is obviously pro-private property, one of the recurrent criticisms of private property as a social convention is its artificiality and tendency to reproduce inequality and past power structures. What's especially problematic is that people often treat private property as a natural state of affairs, and so while the problems associated with it are easily remedied, people can be resistant. For the most part, the classical liberals and our founders weren't resistant to the point that initial conditions matter crucially for the welfare implications of a system of private property, and in the 17th and 18th century "initial conditions" mostly meant land distribution.

Jefferson writes about this at length to Madison in 1785 during his eye-opening visit to France:

"The property of this country is absolutely concentered in a very few hands, having revenues of from half a million of guineas a year downwards. These employ the flower of the country as servants, some of them having as many as 200 domestics, not labouring. They employ also a great number of manufacturers, and tradesmen, and lastly the class of labouring husbandmen. But after all these comes the most numerous of all the classes, that is, the poor who cannot find work. I asked myself what could be the reason that so many should be permitted to beg who are willing to work, in a country where there is a very considerable proportion of uncultivated lands? These lands are kept idle mostly for the aske of game. It should seem then that it must be because of the enormous wealth of the proprietors which places them above attention to the increase of their revenues by permitting these lands to be laboured. I am conscious that an equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree is a politic measure, and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on. If, for the encouragement of industry we allow it to be appropriated, we must take care that other employment be furnished to those excluded from the appropriation. If we do not the fundamental right to labour the earth returns to the unemployed. It is too soon yet in our country to say that every man who cannot find employment but who can find uncultivated land, shall be at liberty to cultivate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state."

Adam Smith made the point about the problems with intergenerational transmission of inequality and private land holdings more bluntly:

"When great landed estates were a sort of principalities, entails might not be unreasonable. Like what are called the fundamental laws of some monarchies, they might frequently hinder the security of thousands from being endangered by the caprice or extravagance of one man. But in the present state of Europe, when small as well as great estates derive their security from the laws of their country, nothing can be more completely absurd. They are founded upon the most absurd of all suppositions, the supposition that every successive generation of men have not an equal right to the earth, and to all that it possesses; but that the property of the present generation should be restrained and regulated according to the fancy of those who died perhaps five hundred years ago." (Smith goes on to make similar observations as Jefferson about how unemployment follows from land concentration).

Thomas Paine put in his two cents too, of course, and suggested in Agrarian Justice that owners of land owed society a "ground-rent" for precisely the reasons that Smith and Jefferson highlight. Paine, then, moved the discussion into more modern versions of redistribution - specifically lump-sum payments organized by the community out of a progressive tax structure. This classical liberal principle of land redistribution and transfer payments has been applied through the whole westward movement of the American people, and subsequently in places like Latin America.

You also see this with shock therapy in the 1990s - when price liberalization proceeded before institution-building and redistribution, inequality was aggravated and market democracy didn't take. This is something that Joseph Stiglitz has pointed out repeatedly. The fleecing of the Russian populace by former Soviet factory managers is a well documented example of this.

And finally, in modern neoclassical economics, Arrow and Debreu's work has highlighted how crucially important these initial conditions are - this is the second fundamental welfare theorem, that any Pareto-efficient equilibrium is possible given an initial set of endowments. Kenneth Arrow was my history of thought professor's advisor, and he's told us in class that Arrow would make this point repeatedly - that if you really wanted to pursue social justice the key was in the adjustment of initial conditions, not in pretending you could reproduce market allocation.

It's important that this element of the Thanksgiving story - of Bradford's land redistribution - isn't lost. Equality was a critical issue for our founders, for classical liberals, and for economists in the liberal tradition up to the present day (such as Stiglitz and Arrow). Private property is an essential institution, but we have to always keep in mind that there's nothing natural about property - it's a human invention. Uncritically approving of all private property arrangements often leads people into the mistake of reifying old injustices.