Wednesday, July 25, 2012

Private Property Versus Monopoly Privilege on the Oregon Trail

What seems like a perennial debate amongst certain journalists and social scientists is over the use and meaning of the term capitalism. Some use it to describe a system that promotes the interest of capitalists above the rest of society while others, such as Ludvig von Mises, use it as a synonym for the free market. That debate is alive and well today as the Occupy Wall Street crowd is outraged at what they see is the essence of capitalism, but is certainly not anything close to a free market. A better term would be crony capitalism.

Crony capitalism is a term for a market economy hampered by special privileges given to some sellers and restrictions placed upon others. Other terms for such a system is economic fascism, corporatism, or conservative socialism. That there is such a terminological confusion is due to the ages old effort of rulers to control markets by providing monopolistic privileges to certain favored producers. Very often such protection is sought after by established sellers desiring to be relieved from competition by potential entrants.
"Oregon Trail" by Nina Mikhailenko

An example of such an effort as well as a bold response in defense of property rights is related by Ezra Meeker in his The Ox Cart Trail. I have already mentioned that Meeker’s account of his trip on the Oregon Trail provides several illustrations of important economic principles. One of which occurred as he and his party arrived at the Missouri River just across from what is now Plattsmouth, Nebraska to begin their trek to Oregon Territory.

As they arrived, they were met with a disheartening vision of a multitude of wagons waiting to cross the wide Missouri. The mass of wagons gave the appearance of a “flatiron of white.” It consisted of
a center train with other parallel trains extending back in the rear and gradually covering a wider space the farther back from the river one would go. Several hundred wagons were thus closely interlocked, completely blocking the approach to the landing by new arrivals, whether in companies or single. All round about were camps of all kinds, from those without covering of any kind to others with comfortable tents, nearly all seemingly intent on merrymaking, while here and there were small groups engaged in devotional services. We soon ascertained these camps contained the outfits in great part of the wantons in line in the great white flatiron, some of whom had been there for two weeks with no apparent probability of securing an early crossing (The Ox Team, pp. 28-29).
Meeker’s party found a scow mostly buried in a sand bar and within a day found its owner eleven miles downriver. The owner agreed to let them use the scow to get across if they dug it out themselves and returned it to the owner once they got across. After a full day of digging, the scow was rescued from the sand and was ready to go. The news that Meeker’s party had procured a scow themselves and was prepared to cross the river and was being “besieged with applications from detained emigrants id not sit well with the ferrymen who were ferrying pioneers across the river for a price.

As meeker tells the story, the ferrymen
Were foolish enough to undertake to prevent us from crossing ourselves. A write of replevin or some other process was issued, I never knew exactly what, directing the sheriff to take possession of the boat when landed and which he attempted to do. . . when that sheriff put in an appearance and we realized what it meant, there wasn’t a man in our party that did not run for his gun to the nearby camp, and it would seem needless to add we did not need to use them. As if by magic a hundred guns were in sight. The sheriff withdrew, and the crossing went peaceably on till all our wagons were safely landed (The Ox Team, p. 31). 
Here we have an established seller of ferry services seeking to protect himself not from commercial competition, but merely from people wanting to provide services to themselves and potentially to others for free. When Meeker’s right to property was threatened by the sheriff, it was successfully defended by the appearance of “a hundred guns.” I suspect that the owners of the guns were acting more from narrow self-interest than on principle. Nevertheless, here is a clear example from our history reminding us that the right to bear arms was enumerated in the Constitution not to allow people to go hunting, but so the citizenry has the ability to protect their life and property from an oppressive ruler.

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