Happy Thanksgiving 2010

This is our fourth Thanksgiving for the Taylor Frigon Advisor, and in keeping with the tradition of our previous posts on this holiday, we find it fitting to reflect on the countless blessings of a free enterprise economy (follow these links to previous Thanksgiving posts from 2007, 2008, and 2009). Such reflection is invited by the very nature of the American holiday of Thanksgiving, which stretches back to the feast celebrated in 1621 to give thanks for their first successful harvest by the pilgrims of Plymouth Bay Colony, joined by the Wampanoag Indians led by Massasoit, who sent his braves into the woods to bring back deer for the occasion.

In 1789, President George Washington recommended Thursday the 26th of November of that year to be a day in which all the people of the United States would come together to give thanks to "the beneficent author of all the good that was, that is, or that will be" for the Constitution "now lately instituted, for the civil and religious liberty with which we are blessed, and the means we have of acquiring and diffusing useful knowledge, and in general for all the great and various favors which he has been pleased to confer upon us."

In 1863, President Abraham Lincoln established Thanksgiving as a national holiday, reminding the citizens that: "Needful diversions of wealth and of strength from the fields of peaceful industry to the national defense have not arrested the plough, the shuttle, or the ship; the axe has enlarged the borders of our settlements; and the mines, as well of iron and coal as of precious metals, have yielded even more abundantly than heretofore."

The incredible sweep of economic growth and prosperity which stretches from 1621 to 1789 to 1863 and on through the twentieth century and today staggers the imagination. The first Thanksgiving was a response from settlers who had every reason to be concerned of starvation from one harvest to the next, while today the United States is so bountiful that it regularly sends hundreds of thousands of metric tons of food into the oppressive and belligerent Communist country of North Korea, which is so bankrupt that it can neither feed its own citizens adequately nor purchase food for them with goods that it produces.

The contrast is an important one. Many today continue to subscribe to the zero-sum fallacy that in a free economy characterized by open competition between producers of goods and services, any gain by one party must come at the expense of someone else. However, as Friedrich Hayek explained in 1968, this free competition "is not a zero-sum game, but one through which, by playing it according to the rules, the pool to be shared is enlarged" (cited in G.R. Steele, Keynes and Hayek: the money economy, page 43). Truly, no one can deny that the pool of opportunity and prosperity in this country has been exponentially enlarged in the years between George Washington's Proclamation of General Thanksgiving in November, 1789 and today.

This result has not been the same in other countries over the same period of time, especially those where the zero-sum theories of Communism (which teaches that wealth always comes at the expense of others) have held sway for long periods of years, or those in which oppressive kleptocracies still prevail (which also operate under a zero-sum approach to economics).

As we noted last year at this time, we believe the cornucopia traditionally associated with Thanksgiving is the perfect opposite to the "fixed pie" of zero-sum thinking. Unlike the view that there is only so much wealth to go around, and that some get it at the expense of others, the cornucopia or "horn of plenty" is a symbol of constant increase, like the expanding pool of which Hayek wrote in 1968. As we gather for Thanksgiving this year, we can reflect again that this is not just a mythical concept!

We wish all of our readers a safe and happy Thanksgiving in 2010.

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