"Any free-market economy must necessarily rest on devotion to the sanctity of private property."
~Murray Rothbard, The Logic of Action One, p. 157
The first British settlers of America arrived in Jamestown, Virginia, in May of 1607. There, in the Virginia Tidewater region, they found incredibly fertile soil and a cornucopia of seafood, wild game, and fruits of all kind. But within six months, all but 38 of the original 104 Jamestown settlers were dead, most having succumbed to famine. Two years later, the Virginia Company sent 500 more settlers, and within six months 440 had died of starvation or disease. This was known as "the starving time" (See Warren Billings, ed., The Old Dominion in the Seventeenth Century: A Documentary History of Virginia, 1606—1689).
In his excellent book, The Noblest Triumph: Property and Prosperity through the Ages, Tom Bethell cites an eyewitness to the starving time who diagnosed the cause, in old English, as "want of providence, industrie and government, and not the barenness and defect of the Countrie, as is generally supposed." The reason for this "want" of "industrie," as Philip A. Bruce noted in his Economic History of Virginia in the Seventeenth Century (p. 212), was that "The settlers did not have even a modified interest in the soil. . . . Everything produced by them went into the store, in which they had no proprietorship." That is, there were no well established property rights; the first British settlers practiced agricultural socialism and, like socialism everywhere, it was an unmitigated disaster.
The problem was that all of the men were indentured servants who had no significant financial stake in the fruits of their own labor. For seven years, all that they produced was to go into a common pool to be used, supposedly, to support the colony and to generate profits for the Virginia Company. Working harder or longer provided them with no rewards, so they shirked — and starved.
Bethell recounts how, in 1611, the British government sent Sir Thomas Dale to serve as "high marshal" of the colony. He immediately diagnosed the problem as the absence of property rights in the land, and subsequently determined that each man would be given three acres of land and be required to work no more than one month per year to contribute to the colony, i.e., to pay taxes.
Once private property was established the colony immediately began to prosper. Bethell cites the historian Mathew Paige Andrews, author of Virginia: The Old Dominion, as saying: "As soon as the settlers were thrown upon their own resources, and each freeman had acquired the right of owning property, the colonists quickly developed what became the distinguishing characteristic of Americans — an aptitude for all kinds of craftsmanship coupled with an innate genius for experimentation and invention." The Indians, who had previously looked down upon the settlers as incompetents, began trading furs and other items for the corn that was being harvested by the settlers.
In their History of the American Economy (p. 32) Gary Walton and Hugh Rockoff note that "A second and more significant step toward private property came in 1618 with the establishment of the headright system." Under this system, "any settler who paid his own way to Virginia was given 50 acres and another 50 acres for anyone else whose transportation he paid. In 1623 — only 16 years after the first Jamestown settlers had arrived — all landholdings were converted to private ownership."
The second British colony in Plymouth, Massachusetts, was established in 1620. Incredibly, the Mayflower investors failed to learn the lessons of the earlier Jamestown settlement and repeated its early disaster. Establishing the same kind of "common pool" arrangement that led to starvation among the Jamestown settlers, about half of the 101 people who arrived on Cape Cod in November of 1620 were dead within a few months. The governor of the colony, William Bradford, eventually recognized the problem as the absence of property rights. In his now-famous passage on private property from Of Plymouth Plantation (p. 120), Bradford wrote of how he determined that the Pilgrims
should set corn every man for his own particular, and in that regard trust to themselves . . . . And so assigned to every family a parcel of land, for present use . . . . This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use.
Bradford was a highly educated man, and pinpointed the source of evil as "that conceit of Plato’s," i.e., the Greek philosopher’s attack on private property, an idea that Aristotle refuted. Those who believed in communal property, wrote Bradford, were deluding themselves into thinking they were "wiser than God."
Once private property was established the colonies thrived as no other nation had before them. New Englanders became successful trappers, farmers, fishermen, and ship builders. The southern colonies excelled at growing cotton, rice, wheat and other grains, indigo, corn, and especially tobacco. By 1775 the American economy was ten times larger than it had been in 1690 and a hundred times larger than it was in 1630.
It is not an exaggeration to say that the key to the very survival of the Jamestown and Plymouth pilgrims was their establishment of the cornerstone of capitalism: private property. From that, all the blessings flowed for which they gave thanks to the Lord.