Free enterprise has been a channel for God’s blessing in the early days of our nation while still a British colony into the first centuries of nationhood. Let’s see how free market economics helped to make America great.
The British, French, and Dutch governments did not pay for settlements in the New World. Companies paid the expense. Financiers made deals with folks who wanted to start a new life in the colonies. Settlers founded family farms and businesses that thrived and prospered.
Some people, desperate for new opportunities, indentured themselves as servants for a few years to cover the cost of the trip. After their time of service was over, the were free to work and prosper.
The pilgrims not only inspire our modern Thanksgiving Feast, but the lessons they learned about free enterprise still have wisdom for us in the 21st century.
The pilgrims made their way to the New World so they could enjoy religious freedom. Getting to North America cost money. They sold their homes to raise money, but still came up short. Financier provided money for the voyage as an investment. The pilgrims would work for seven years. At that point, everything would be liquidated and divided between the financiers and the pilgrims.
Since they were working to pay off their debt, they decided to all work together on common land. This was a disaster! Soon, industrious workers realized they were doing more work than the lazier brethren. There was little motivation to work! Instead, the leaders assigned each man a parcel of land. The output tripled!
When the contract ended in 1627, the Pilgrims could begin building their farms and businesses for their families and they prospered even more.
A Church, A Mill, A Blacksmith
It is said that early towns in the New World needed a church, a mill, and a blacksmith.
The Pilgrims set to work right away to build a meeting house (church) and homes. A year later they had a blacksmith. William Bassett, who was left behind the year before, arrived in 1621. He was the first blacksmith in the colony of Plymouth and much needed!
After grinding corn by hand for more than a decade, John Jenney built a water-powered mill on Town Brook. Two giant stone wheels ground the corn into cornmeal. The millstones were powered by water via a 14-foot waterwheel. Now they had everything they needed. The little colony grew and prospered.
Further up the coast the first sawmill opened in present-day Maine on the Piscataqua River. The colonists started a logging industry, shipping lumber back to England. A year later, the first water-powered sawmill opened.
Massachusetts Bay Colony
The folks heading to present-day Boston were shrewd. In an attempt to not answer to a company back in England, the settlers bought up the stock in the company paying for the settlers. Since colonists were accountable to the stockholders of a company, now the Massachusetts Bay Colony folks were accountable to one another.
In Massachusetts Bay Colony, the settlers did not find the fertile land that existed in the middle and southern colonies. The rocky soil made farming difficult. Instead of crops, many farmers raised livestock. Some farms bred horses.
Other men made a living in the fishing, timber, or shipping industries.
The Atlantic Ocean, filled with an abundance of cod, mackerel, herring, halibut, and bass, was the perfect location for fishing. Fishermen sold their fish to merchants who exported the fish. Whaling was another huge industry. Folks used whale oil for lamps and soaps. Though dangerous, whaling was a very profitable industry for brave hearty souls.
The lush New England forests were soon the location of a growing timber industry. Lumberjacks chopped down oak, maple, beech, birch, hickory, and ash trees for their beautiful wood. Most wood was exported to Europe while some was sold to ship builders and furniture makers. Soon there were thousands of sawmills in New England.
Ship building was big business in Massachusetts Bay Colony and later throughout New England. Fishermen and whalers need boats. Merchants needed ships to transport goods from ports in the New World to European and Caribbean ports. International trade required ships! Ship building required carpenters, joiners, sail makers, barrel makers, painters, and blacksmiths so it employed many men.
The residents of Massachusetts Bay Colony were not just surviving financially, they were thriving and sending the fruits of their labor across the world! The colonists of New England were prospering!
Hard work and a free enterprise system caused colonists to thrive and prosper in the New World. Free enterprise, a system where businesses and farms are owned by individuals, not the government, and where the economy operates with little government regulation, was the perfect environment for success.
The settlers in the New World enjoyed the freedom to buy, the freedom to sell, the freedom to try, the freedom to fail. The took risks and experienced failure. They took personal responsibility for their failures, as well as their successes. Free enterprise helped to cultivate a love of freedom which meshed well with the Puritan work ethic.
Along with the Puritan ethic of industriousness, the free enterprise system can be credited with America’s prosperity. People are willing to take a risk to be financially independent by starting their own businesses or farming.
In a free market, consumers “vote” for the products of their choice by purchasing those products. This causes quality items to sell at higher rates than poor quality ones. Early America was known for quality workmanship and goods.
Wealth of the Nations
Ironically, the year the Declaration of Independence was signed, Adam Smith’s Wealth of the Nations, the premier book on free-market capitalism, was published. Our Founding Fathers read and agreed with Smith’s philosophy of economics.
The king of England believed in mercantilism where the government dictates how citizens can spend their money using tariffs and taxes. When colonists were forced to purchase certain items only from England, they were outraged! Being so far away, they had not only enjoyed religious freedom, but economic freedom as well.
Free enterprise opens the door for new ideas. Creative individuals invent and try out new ideas because they have the freedom to do so. Maybe that’s why the USA is the most innovative nation on earth!
If your teen needs a high school economic credit, I want to recommend True North Homeschool Academy’s Economics course, a spring semester course. This course teaches Free Enterprise-style economics in a practical, hands-on way. Check it out HERE.
And this Thanksgiving, as you are thanking the Lord for all your blessings, remember the early settlers of our great nation, and thank God for the economic freedom they enjoyed and built into the fabric of our great nation.