Were The Pilgrims Capitalists Or Socialists?

This was first posted in 2010.

See The Pilgrims Were ... Socialists? from The New York Times. There seems to be some controversy. One story has them owning property in common and not doing well until they went with private property. Not everyone agrees with that version of history. Here is what seems to be the most interesting thing from the report:

"Historians say that the settlers in Plymouth, and their supporters in England, did indeed agree to hold their property in common — William Bradford, the governor, referred to it in his writings as the “common course.” But the plan was in the interest of realizing a profit sooner, and was only intended for the short term; historians say the Pilgrims were more like shareholders in an early corporation than subjects of socialism.

“It was directed ultimately to private profit,” said Richard Pickering, a historian of early America and the deputy director of Plimoth Plantation, a museum devoted to keeping the Pilgrims’ story alive."

So when you eat turkey tomorrow, you might really be celebrating that great American institution...the corporation. Makes me feel real patriotic.

This part was interesting too.

"The competing versions of the story note Bradford’s writings about “confusion and discontent” and accusations of “laziness” among the colonists. But Mr. Pickering said this grumbling had more to do with the fact that the Plymouth colony was bringing together settlers from all over England, at a time when most people never moved more than 10 miles from home. They spoke different dialects and had different methods of farming, and looked upon each other with great wariness."

"“One man’s laziness is another man’s industry, based on the agricultural methods they’ve learned as young people,” he said."
"Bradford did get rid of the common course — but it was in 1623, after the first Thanksgiving, and not because the system wasn’t working. The Pilgrims just didn’t like it. In the accounts of colonists, Mr. Pickering said, “there was griping and groaning.”"

"“Bachelors didn’t want to feed the wives of married men, and women don’t want to do the laundry of the bachelors,” he said.

The real reason agriculture became more profitable over the years, Mr. Pickering said, is that the Pilgrims were getting better at farming crops like corn that had been unknown to them in England."

Tuition Trails Inflation for Many U.S. Colleges

From the WSJ this week. Excerpts:

"More than half of public colleges in the U.S. are failing to bring in enough tuition revenue to keep up with inflation, and nearly as many private schools are facing a similar financial crisis, according to a new report from Moody’s Investors Service.

Universities are forecasting that fiscal 2015 will be their weakest year of net tuition revenue growth in a decade, with 51% of public schools and 41% of private institutions unable to increase revenue at or above Moody’s projected 2% rate of inflation. Last year, an estimated 49% and 39%, respectively, fell short.

Overall, public and private institutions forecast net tuition revenue growth of 1.9% and 2.7%, respectively. Just a decade ago, the majority of schools regularly boosted net tuition revenue by upwards of 5% a year.

The Moody’s report, based on a survey of 290 public and private, nonprofit schools, highlights the tightrope school administrators must walk, using discounts to attract cost-conscious students from a shrinking pool of high school graduates while still generating enough net revenue to stay in business amid higher operational expenses."

"On a per-student basis, public universities forecast net tuition revenue to grow 1.5% in fiscal 2015, while private institutions forecast 2.3% growth. That reflects both an inability by families to pay much more for college, as well as an unwillingness by schools to even try charging higher rates."

"Thirty-seven percent of public institutions, and 45% of private ones, expect enrollment declines this fiscal year."

"While troubling, the enrollment declines weren’t unexpected. The population of high school seniors ballooned a decade ago as children of the baby boom generation came of age, but those figures have since fallen, especially in the Northeast and Midwest regions."

 What is normally called financial aid comes upwhere it says "using discounts to attract cost-conscious students." They never really give you financial aid. There is not some vault of money that they open and take some cash out of to give you. 

They are really engaging in price discrimination. That is when firms charge different prices to different customers and the difference is not based on the cost of producing the good or service.

Different groups of consumers may have different demand curves so firms can make more profit if they charge each group a different price. For example, senior citizens might get a discount for lunch at restaurants. They have more time to shop around than others so price matters more to them. Their demand is more elastic.

Who Is My Favorite Economist?

Click here to see the answer

The secret strategy to buying and selling used textbooks

It seems like it is all in the timing. See Textbook Arbitrage: Making Money Off Used Books by David Kestenbaum of NPR. Click here to see the definition of arbitrage.

 Excerpts from the NPR post: 

"... he guessed that the prices of the textbooks were going up and down with the college calendar. His theory was that prices would fall in summer (no one is looking for a nice textbook in July to curl up with on the beach) but then rise when classes begin and students really need the books."

"Over a year Bob and Kenny gathered data from Amazon on sales of all kinds of used textbooks, and they found the pattern was there for lots of textbooks — prices fell in the summer and jumped back up as classes started at the beginning of a semester. It was as if they'd found a stock that went up and down at very regular times, so that they could know exactly when to buy it, and exactly when to sell it."

Some Good News: Productivity Up, Percent Of Population Employed Up

See US Productivity Suggests Economy Can Grow 'Without The Threat Of Inflation' and Employment status of the civilian noninstitutional population 16 years and over, 1979 to date.

The productivity report said "Productivity, or the U.S. economy’s output per hour of work, increased at a 2.0 percent annual rate during the third quarter as output increased 4.4 percent and hours worked increased 2.3 percent, the U.S. Bureau of Labor Statistics reported Thursday. "

Higher productivity means an increase in supply. When supply shifts to the right, prices fall (or at least it will help keep down price increases caused by demand increasing).

The unemployment rate fell to 5.8% in October from 5.9% in September. But the percent of the population employed jumped from 59.0% to 59.2%. That is important because the unemployment rate can fall if people drop out of the labor force. The labor force participation rate went from 62.7% to 62.8%.

The percent of the population employed was 63.0% in 2007 (the recession started in December 2009). So we are still well below that, although about half the difference is from retired people dropping out of the labor force.