The recognition of private property and the emergence of free enterprise in America took place over a period of about two hundred years before it declared independence from England. Even then, there were some problems with the consistent application of the idea. Indeed, the acceptance of slavery was the most glaring inconsistency. It is worthwhile to chart the history of the development of freedom and liberty, which can only exist in a world that recognizes the individual’s right to property. Therefore, let us consider how the first colonists established the English settlements of the east coast of America in the 17th century.


While the English had made several voyages to America and attempted to establish settlements, it was not until 1607 that they made the first permanent settlement at Jamestown. When the first settlers arrived there, it was not known whether or not that settlement would survive. The whole endeavor was fraught with peril. The voyage itself involved a good bit of danger. The ships were small and should a violent storm arise they might easily sink. At that time a small ship might displace about 10 tons while a larger one might displace 100 tons. For comparison sake, a large cruise ship today can displace 180,000 tons.


Having arrived in America, the settlers were on their own to survive. They would have little provision left from the ocean crossing, which might take two months or more. In addition, there was no hope that new supplies from England would be forthcoming, at least not any time soon. They would have to provide for themselves as best they could. They would have to build shelters, clear land, grow crops, and store whatever provisions they could before winter arrived. Of the 104 men left behind by the ships arriving on the Chesapeake Bay in June, only 46 were still alive in September. Nevertheless, new settlers continued to arrive in the course of time and, though the attrition rate was high, Jamestown grew.


The same basic experience was what the Pilgrims faced when they landed in Plymouth in 1620, only their winter was much harsher. They faced the same dangers and perils as the settlers in Virginia and their experience was basically the same. Namely, only a few of the original settlers survived and if new arrivals had not replenished their numbers, the settlement would not have survived.


However, there is another part of their story that we have not considered yet. Both settlements were commercial ventures. That is, the settlers were under contract to develop the settlement for the benefit of the company financing it. In both cases the settlers were to hold their productive output in common to provide for the community and, in time, to provide a profit for the financier. Moreover, in both cases the common ownership of the output had devastating results leading to impending economic disaster. The leadership in both settlements eventually recognized the need to grant the individuals some right to their own land and an individual claim to some significant portion of the output. It was only then that the conditions in these settlements began to change, securing the permanence of the communities.


While this move was far removed from the free enterprise and the rule of private property law that flourished in England and the U.S. in the 19th century, it nonetheless was a significant move in that direction. Throughout the rest of the 17th century the American colonies remained tied to England. During this time the populations of the initial colonies increased, and new colonies were founded. They were great distances from one another and formed their own local governments. It was an age of Mercantilism and England aimed to exploit her colonies to enhance her own fortunes.


The 17th century was also an era of political upheaval in England. The century began with the death of Elizabeth and the installation of James Stuart as king of England. James I asserted his divine right fairly aggressively. His successor, Charles I, was even more aggressive and opted to suspend Parliament for a period of time during his reign. This of course put him at odds with the other nobility of the island nation and this eventually resulted in Civil War. Of course, the Parliamentarians won the day and Charles lost his head. Afterwards, Parliament maintained its rule until the death of Oliver Cromwell. The resulting factions following his death ultimately led to the reestablishment of the Stuart monarchy. It was in this latter part of the century that numerous writers emerged as advocates of freedom including John Milton and John Locke. Locke’s two treatises on government questioned the king’s divine right and promoted the idea that people have the fundamental rights of life, liberty, and property. The mounting challenges on the Stuarts, coupled by James II’s Catholicism, led in turn to the Glorious Revolution and the abdication of the throne. William of Orange, with his wife Mary, ascended to the throne. These events set in motion a process that increasingly challenged accepted political assumptions of the day.


The development of the idea that the individual has natural rights coincided with the rise of the natural law philosophy. As the scientific method was being employed to discover all sorts of new principles that ordered nature, the idea spread that there is a fundamental nature to all things. Moreover, it was argued that the laws of nature were implanted by God and cannot be altered by human action. Based on this idea, writers looked for the fundamental nature of mankind, government, and economics. It was within this viewpoint that the concept of a social contract was advanced. The contract is not something that is written and signed onto. Rather, political philosophers argued that it is something that all people should recognize if they are to live in a peaceful community with one another. Put simply, it would be the recognition that one should not employ violence to achieve his personal ends. It is a view that God has so structured creation that all people ought to respect the lives of all other people, should not trespass on their property, leave them free to enjoy the fruits of their labor, and should keep their word and honor all their voluntary contracts. The growth in this philosophy in the 18th century set the stage for the American revolution and the rise of private property and free enterprise.


… to be continued.


Paul A. Cleveland is a Professor of Economics and Finance at Birmingham-Southern College.