There are three configurations of property rights: state, communal, and private property. Within a family, many goods are in effect communally owned. But when the number of communal members exceeds normal family size, as happens in tribes and communes, serious and intractable problems arise. It becomes costly to police the activities of the members, all of whom are entitled to their share of the total product of the community, whether they work or not. This is the free-rider problem, and it is the most important institutional reason tribes and communes cannot rise above subsistence level (except in special circumstances, such as monasteries).

State ownership, as we saw in the Soviet Union, has its own problems. For these reasons, private property is the only institutional arrangement that will permit a society to be productive, peaceful, free, and just. The free-rider problem was plainly demonstrated at Plymouth Colony in 1620, when the Mayflower arrived in the New World. Contrary to the Pilgrims’ wishes, their initial ownership arrangement was communal property.

Desiring to practice their religion as they wished, the Pilgrims emigrated in 1609 from England to Holland, then the only country in Europe that permitted freedom of worship. They found life in Holland to be in many respects satisfactory. But war with Spain was a constant threat, and the Pilgrims did not want their children to grow up Dutch. They longed to start afresh in “those vast and unpeopled countries of America,” as William Bradford would later write in his history, Of Plymouth Plantation. There, they could look forward to propagating and advancing “the gospel of the kingdom of Christ.”

Thirty years old when he arrived in the New World, Bradford became the second governor of Plymouth (the first died within weeks of the Mayflower’s arrival) and the most important figure in the early years of the colony. He recorded in his history the key passage on property relations in Plymouth and the way in which they were changed. His is the only surviving account of these matters.

DRIVING A HARD BARGAIN

The Pilgrims knew about the early disasters at Jamestown, but the more adventurous among them were willing to hazard the Atlantic anyway. First, however, they sent two emissaries, John Carver and Robert Cushman, from Leyden to London to seek permission to found a plantation. This was granted, but finding investors was a problem. Eventually Carver and Cushman found an investment syndicate headed by a London ironmonger named Thomas Weston. Weston and his fifty-odd investors were taking a big risk in putting up the equivalent of hundreds of thousands of dollars in today’s money. The big losses in Jamestown had scared off most “venture capital” in London.

Those waiting for news in Leyden were concerned that their agents in London would, in their eagerness to find investors, agree to unfavorable terms. Carver and Cushman were admonished “not to exceed the bounds of your commission.” They were particularly enjoined not to “entangle yourselves and us in any such unreasonable [conditions as that] the merchants should have the half of men’s houses and lands at the dividend.”

Eventually, however, Carver and Cushman did accept terms stipulating that at the end of seven years everything would be divided equally between investors and colonists. Some historians claim that those who came over on the Mayflower were exploited by capitalists. In a sense, they were. But of course they came voluntarily.

The colonists hoped that the houses they built would be exempt from the division of wealth at the end of seven years; in addition, they sought two days a week in which to work on their own “particular” plots (much as collective farmers later had their own private plots in the Soviet Union). The Pilgrims would thereby avoid servitude. But the investors refused to allow these loopholes, undoubtedly worried that if the Pilgrims—three thousand miles away and beyond the reach of supervision—owned their own houses and plots, the investors would find it difficult to collect their due. How could they be sure that the faraway colonists would spend their days working for the company if they were allowed to become private owners? With such an arrangement, rational colonists would work little on “company time,” reserving their best efforts for their own gardens and houses. Such private wealth would be exempt when the shareholders were paid off. Only by insisting that all accumulated wealth was to be “common wealth,” or placed in a common pool, could the investors feel reassured that the colonists would be working to benefit everyone, including themselves.

The investors unquestionably had profit in mind when they insisted on common property. The Pilgrims went along because they had little choice.

Those waiting in Leyden objected to this arrangement. If the Pilgrims were not permitted private dwellings, “the building of good and fair houses” would be discouraged, they wrote back to London. Robert Cushman was thus caught in a cross-fire between profit-seeking investors in London and his worried Leyden brethren, who accused him of “making conditions fitter for thieves and bondslaves than honest men.”

Cushman responded with an artful case for common ownership: “Our purpose is to build for the present such houses as, if need be, we may with little grief set afire and run away by the light. Our riches shall not be in pomp but in strength; if God send us riches we will employ them to provide more men, ships, munition, etc.”

Common ownership would also “foster communion” among the Pilgrims, he thought (wrongly). Having held discussions with the investors, who seem to have been unyielding, Cushman wanted to close the deal. So he tried to persuade his brethren not to worry about the property arrangements. Those still in Leyden remained unconvinced and unreconciled to the terms, but there was little they could do. Many had already sold their property in Holland and so had no bargaining power.

It is worth emphasizing all this because it is sometimes said that the Pilgrims in Massachusetts established a colony with common property in emulation of the early Christians. Not so. It is true that their agent Cushman used arguments that were calculated to appeal to Christians—in particular warning them against the perils of prosperity—in order to justify his acceptance of unpopular terms. No doubt he felt that a bad deal was better than none. But the investors themselves unquestionably had profit in mind when they insisted on common property. The Pilgrims went along because they had little choice.

The Pilgrims may have been “exploited,” but a greater source of hardship was the harsh environment of the North American continent. This needs to be stressed, given the tendency to regard the wealth of the United States as a product of “abundant natural resources” and the equally erroneous association of the Mayflower and those who arrived in it with the idea of privilege.

THE COMMUNAL EXPERIMENT

The Mayflower arrived at Cape Cod in November 1620 with 101 people on board. About half of them died within the first few months, probably of scurvy, pneumonia, or malnutrition. It is not easy for us to grasp the hardships that the first settlers in this country experienced, even in New England, where the native American Indians were relatively friendly.

By the spring of 1623, the population of Plymouth can have been no larger than 150. But the colony was still barely able to feed itself, and little cargo was returning for the investors in England. On one occasion newcomers found that there was no bread at all, only fish or a piece of lobster and water. “So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery,” Bradford wrote in his key passage on property.

Having tried what Bradford called the “common course and condition”—the communal stewardship of the land demanded of them by their investors—Bradford reports that the community was afflicted by an unwillingness to work, by confusion and discontent, by a loss of mutual respect, and by a prevailing sense of slavery and injustice. And this among “godly and sober men.” In short, the experiment was a failure that was endangering the health of the colony.

Historian George Langdon argues that the condition of early Plymouth was not “communism” but “an extreme form of exploitative capitalism in which all the fruits of men’s labor were shipped across the seas.” In this he echoes Samuel Eliot Morison, who claims that “it was not communism . . . but a very degrading and onerous slavery to the English capitalists that was somewhat softened.” Notice that this does not agree with the dissension that Bradford reports, however. It was between the colonists themselves that the conflicts arose, not between the colonists and the investors in London. Morison and Langdon conflate two separate problems. On the one hand, it is true that the colonists did feel “exploited” by the investors because they were eventually expected to surrender to them an undue portion of the wealth they were trying to create. It is as though they felt that they were being “taxed” too highly by their investors—at a 50 percent rate, in fact.

But there was another problem, separate from the “tax” burden. Bradford’s comments make it clear that common ownership demoralized the community far more than the tax. It was not Pilgrims laboring for investors that caused so much distress but Pilgrims laboring for other Pilgrims. Common property gave rise to internecine conflicts that were much more serious than the transatlantic ones. The industrious (in Plymouth) were forced to subsidize the slackers (in Plymouth). The strong “had no more in division of victuals and clothes” than the weak. The older men felt it disrespectful to be “equalized in labours” with the younger men.

This suggests that a form of communism was practiced at Plymouth in 1621 and 1622. No doubt this equalization of tasks was thought (at first) the only fair way to solve the problem of who should do what work in a community where there was to be no individual property: If everyone were to end up with an equal share of the property at the end of seven years, everyone should presumably do the same work throughout those seven years. The problem that inevitably arose was the formidable one of policing this division of labor: How to deal with those who did not pull their weight?

The Pilgrims had encountered the free-rider problem. Under the arrangement of communal property one might reasonably suspect that any additional effort might merely substitute for the lack of industry of others. And these “others” might well be able-bodied, too, but content to take advantage of the communal ownership by contributing less than their fair share. As we shall see, it is difficult to solve this problem without dividing property into individual or family-sized units. And this was the course of action that William Bradford wisely took.

PROPERTY IS PRIVATIZED

Bradford’s history of the colony records the decision:

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 in the general way as before. And so assigned to every family a parcel of land, according to the proportion of their number.

So the land they worked was converted into private property, which brought “very good success.” The colonists immediately became responsible for their own actions (and those of their immediate families), not for the actions of the whole community. Bradford also suggests in his history that more than land was privatized.

The system became self-policing. Knowing that the fruits of his labor would benefit his own family and dependents, the head of each household was given an incentive to work harder. He could know that his additional efforts would help specific people who depended on him. In short, the division of property established a proportion or “ratio” between act and consequence. Human action is deprived of rationality without it, and work will decline sharply as a result.

Under communal land stewardship, Bradford reports, the community was afflicted by an unwillingness to work, by confusion and discontent, by a loss of mutual respect, and by a prevailing sense of slavery and injustice.

William Bradford died in 1657, having been reelected governor nearly every year. Among his books, according to the inventory of his estate, was Jean Bodin’s Six Books of a Commonweale, a work that criticized the utopianism of Plato’s Republic. In Plato’s ideal realm, private property would be abolished or curtailed and most inhabitants reduced to slavery, supervised by high-minded, ascetic guardians. Bodin said that communal property was “the mother of contention and discord” and that a commonwealth based on it would perish because “nothing can be public where nothing is private.”