In response to my Thanksgiving post this year Alex over at the Advice Network left a thought provoking comment. Here’s the comment:

It’s interesting that the European (illegal?) immigrants could not survive with a communal (communist?) economic system, considering the aboriginal neighbors who saved their lives by showing them what crops to plant DID have a communal economic system.

What do you think accounted for this difference?

I started a comment in reply but the question is interesting enough that I think it warrants a full post. So here it goes.

A Historical Perspective

Advice, I’m thinking history is pretty clear that the Native American communal system did not allow them to thrive. They could survive in the harsh climate, sure. And that was something the Europeans had to learn. But Native American system kept them at subsistence levels and allowed their culture to be swept aside by the European privatized system.

Perhaps I’m being naive, but I’m thinking that if the communal Native American system had been inherently better then they would have emerged as the dominant culture and America would be a vastly different place today.

The Reality

It’s a simple reality of human nature that folks will work much harder and be far more committed to that which they personally own and are permitted to profit directly from versus that which belongs to a group they are part of.

People are inherently selfish. If they see equal rewards for varying amounts of effort it isn’t long until nearly everyone is putting forth the least amount of effort possible. Productivity and efficiency rapidly fall way off.

Communism in Practice

On paper it makes a whole lot more sense to plan whole industries from one central location. With large scale coordination of resources inefficient redundancies can be eliminated and the economies of scale that an entire nation should be able to achieve are in theory huge.

Trouble is, in practice Communism runs smack into a Yogi Berra truth:

In theory there is no difference between theory and practice. In practice there is.

Unfortunately that communal system runs afoul of human nature.

It turns out the increased production people achieve when they are allowed to directly profit from their own hard work and ingenuity far more than compensates for the inefficiencies of redundant resource utilization and inefficiencies of smaller scales. The overwhelming majority of people, even very good people, will not work anywhere near their potential when they see someone else getting the same reward with much less effort.

In the end, because they go against the way people are naturally wired, communal systems eventually break down as people learn shortcuts and how to corrupt the system for their own personal gain. Instead of a system where increased production is inherently rewarded, a system set up so that everyone is rewarded equally regardless of effort creates a situation where the only personal pay off comes from doing less work. That causes productivity, quality control, and innovation all to fall way off.

The Missing Element of Hope

But I think there is an additional piece that has to be in place beyond just a systemic change. To my way of thinking that additional piece is the spiritual element of hope or belief that change is possible.

And I think that is the key ingredient which helped the European immigrants ultimately dominate in the Americas.

Unlike the Native Americans, the Europeans believed that things could be different. Then they set about to make that difference happen.

Without hope for a better future people waste away.

For example, here’s a heart wrenching article about how the Soviets destroyed a farm community from the New York Times back in 1991. (Free registration required.)

Change didn’t happen in this particular community even after the farming system was privatized. I think the big reason is that the people were truly hopeless.

Here’s an excerpt.

Ultimately, the Communist state succeeded in what it set out to do, to reduce peasants to tame workers in a system totally controlled from above. The cost was starkly illustrated in a local newspaper by a reporter who found cows bellowing in pain at one farm because they had not been milked for days. A single milkmaid was leaving for home. Where were the others? “I don’t know, they didn’t show up.” Why don’t you milk the cows? “I’ve finished my shift.”

Mrs. Dobritskaya, now close to tears, said, “I’d get out of here if there was somewhere to go.

“But where? Everywhere it’s the same mud, the same manure. Maybe they have glasnost somewhere, maybe they have democracy, but not here. We’re used to working under the old system — as it was, so it stays. What would happen if we go on strike? No, if this privatization comes, it’ll have to come from above, not from below. That’s how it’s always been. You know what we say: Fish begin to stink from the head down.”

They didn’t believe change was possible so they were unwilling to even try.

Hope is Spiritual

It takes a degree of faith, which is a spiritual thing, to have hope for change. In fact here is how the Bible says it:

Faith is the confidence that what we hope for will actually happen; it gives us assurance about things we cannot see.

To answer your question, Advice, I think that ultimately the difference in success between the two systems in the end is that the European immigrants had hope that things could change. Once they changed their system to be in line with how people are wired they had the spiritual strength of hope to be successful.

In contrast the Native Americans were using a communal system that ran contrary to human nature. On top of that lacked any belief that they could change.

But that’s just the way I see it.