Mormons and Markets, II: Information and the Failure of the United Order

Throughout the 19th century, Mormons tried various different communal economic arrangements that basically didn’t work. We tend to talk about the United Order or the Law of Consecration as though it were a single set of well defined institutions and arrangements. In point of fact, it was not. Hence, we have different versions of communal economics in Ohio, Missouri, the early Salt Lake Valley, and then various United Orders later in the pioneer Utah period. These took the form of everything from tightly integrated communistic societies like Orderville, to simple rules against the sale or alienation of land. The most ambitious projects were in pioneer Utah, where ultimately the Church set up an organization known as Zion’s Central Board of Trade designed to co-ordinate and manage the Great Basin economy of the Latter-day Saints. To a greater and lesser extent, all of these programs failed economically. Why was this, and is there anything to be gleaned about how we should think about markets from these failures?

Generally speaking, Mormons have offered two explanations for the failure of these arrangements. The first is unrighteousness. The saints were simply too selfish and petty to pull it off. The required levels of self-sacrifice, charity, and unity could not be met. People cheated and held back a portion and the whole thing fell apart. The second dominant explanation is persecution. Things were humming along quite nicely, we claim, until malignant outside forces in the form of either “mobs” (read: state militias) or the federal government intervened to destroy the communal Mormon arcadia. To a greater and lesser extent both of these explanations have value. In the Doctrine and Covenants, the Lord himself rebukes the Missouri Saints for their selfishness in failing to live the Law of Consecration. The Mormons lost a huge amount of property to mobs in Missouri, and the general disruption of the anti-polygamy campaigns in the 1880s was coupled with federal action aimed directly at some of the Mormon co-operatives. For example, the Brigham City United Order issued script that circulated as a medium of exchange within the organization. The federal government decided that these notes constituted a kind of negotiable security subject to federal taxation and slapped a crippling tax assessment on the Brigham City organization.

Our thinking about these things, however, frequently ignores an important third issue: information. Consider for a moment — if we can without hackles rising to conversation-stopping levels — the failure of communism in the Soviet Union. There are a (very) few die-hard leftist thinkers who still subscribed to a kind of 1930s-era intellectual nostalgia about the Soviet Union, seeing it as a noble experiment that was corrupted by Stalin and the failure of the Russians to live up to the noble ideals of the Revolution. Outside of this kind of silliness, however, the consensus is that over and above an economically ruinous arms race and various ill-fated foreign adventures, what killed communism was information. An economy — particularly a modern one — is a tremendously complicated set of social arrangements. For a single coordinating body to control and arrange it requires a truly vast amount of information. The aggregation, assimilation, and action upon the amount of information necessary to effectively run the Soviet economy ultimately exceeded the abilities of the Soviet state. Indeed, there is a non-trivial argument to be made that corruption and the black market, far from undermining the Soviet economy, helped to keep it afloat longer than it would otherwise have done. This is because the price mechanism serves to encode, if you will, a huge amount of information regarding the supply and demand for the myriad of material and human factors that go into any product or service. Corruption and the black market provided a (highly imperfect) way for the price mechanism to negotiate some of the many information gaps left by the — inevitable — ignorance of the Soviet central planners.

The time line of Mormon communal economics follows the time line of an explosive proliferation in the scope and complexity of American economic life. As a cursory study will reveal, managing the complexity of even the relatively simple agrarian economies of Jackson County Missouri or the Great Basin in the first few years of settlement taxed the administrative and intellectual ingenuity of even such able and inspired men as Brigham Young. Yet by 1890, the economic world of the Saints had become exponentially more complicated. Hence, the failure of Mormon communal economics was not simply that the people lacked sufficient virtue in the face of prodigious demands on their patience and charity or that the leaders lacked sufficient power in the face of outside persecution, but also that both lacked sufficient information to co-ordinate economic activity in a complex world.

If complexity rather than sin or persecution ultimately spelled the end of all-encompassing Mormon communal economics, then the decision of the Church to abandon such efforts takes on new significance, for complexity is not inevitable. It is possible to retreat into simplicity, to limit ones self to keep the information associated with economic activity within manageable limits. Ultimately, this is not the decision that the prophets made. Brigham embraced the railroad, which was the ultimate engine of economic complexity, and his successors — notably Wilford Woodruff and Joseph F. Smith — were inspired to integrate Mormondom into national and ultimately international economies. The decision to embrace economic complexity — and with it the market — ultimately is what has allowed Mormonism to expand. We stand on the threshold of becoming a global religion in large part because Brigham bought stock in the Union Pacific, and Wilford and Joseph F. rejected, if you will, the Amish option.

32 comments for “Mormons and Markets, II: Information and the Failure of the United Order

  1. JWL
    May 16, 2005 at 1:08 pm

    Although you acknowledge that the united order efforts varied considerably, I think your analysis still oversimplifies the reality of those efforts. In the Utah period, there were hundreds of co-ops and other united order projects that ranged from the kibbutz-like agrarian co-ops (of which Orderville was one) to worker owned businesses (such as in Brigham City) to ZCMI which was originally a retail co-op owned by the participating merchants. All of these were independent private corporations (even Orderville was incorporated) owned and managed by their participants, not the Church. The Central Board of Trade was supposed to promote and coordinate the activities of these numerous enterprises but it was of short duration and never exercised anything remotely resembling or approaching the centralized control of the economic planning agencies of the Leninist states. In particular, the Central Board of Trade had little to no real influence on prices. As I read it, your main point is that the price-setting mechanism of the market was missing (a point you could have made without inflammatory comparisons to Leninist economies) but I think the historical facts are that the attempt at the united order in Utah never reached a level of control sufficient to distort whatever price mechanisms existed in the frontier economy of that time.

    That said, I do agree that there are more reasons than unrighteousness and persecution for the lack of longevity in the Utah united order efforts. One of the most important of these is somewhat related to your point. That is the linking of the united order effort to the goal of achieving self-sufficiency for the Utah economy. This, rather than some attempt at centralized price-fixing, distorted the united order companies’ interface with the larger national economy and resulted in the expenditure of scare resources on businesses that were not economically viable. Those united order companies that made economic sense (such as ZCMI) survived quite nicely. However, these surviving businesses gradually lost their co-operative character as the Church acceded to the dominant capitalist ideology as part of the accommodation with the United States in the 1880s and 1890s which included the abandonment of plural marriage, the Mormon political party and other institutions which the Church had used to try to islolate itself from the perceived evils of Gilded Age America.

  2. Lorin
    May 16, 2005 at 1:26 pm

    In comment #1 we read: “In particular, the Central Board of Trade had little to no real influence on prices.”
    Perhaps not the Central Board of Trade, but in that period of our history the Church’s Tithing Store had everything to do with prices. Members would not sell a product for less than they could get in credit for it at the Tithing Store, and no one would buy it for more than they could buy it at the Tithing Store. So whatever the Tithing Store thought was the appropriate valuation, that became the effective standard for the community.

  3. Jed
    May 16, 2005 at 1:31 pm

    First of all, I think you need to separate failure in Jackson County from failure in Utah. There is no good reason to assume the failure of each is the failure of both. They are separated by many years and miles and and the implementation of the orders was vastly different. Church bureaucracy had grown considerably by the 1870s. Arrington, May, and Fox show five or six different levels or forms of cooperative orders in Utah, something Jackson County never had. Failure is relative and more or less gradual as JWL suggests. May’s essay in the Arrington festschrift attributes failure to BY of sending ambiguous signals, which I doubt applies in JS’s case. I think the complexity theory may work better for Utah than MO.

    One good reason for failure in Jackson County is that very little was going into the pot. The converts brought almost no wealth with them. That left the inheritances small and people dissatisfied with the system as the divine order. Another reason is tradition. There was no strong American tradition of property sharing. Locke ruled the day. You can’t just move from the sanctity of private property to the sanctity of redistribution with the flip of a switch. People revolted.

  4. Lorin
    May 16, 2005 at 2:01 pm

    I would like to hear more about the successes of the cooperative economies. If we do not know enough to state the successes, we probably will not be able to state correctly the failures. In Missouri, for example, wasn’t the practice of pooling resources and buying large tracts more efficient than each of the Saints competing with each other for small tracts? ZCMI undoubtendly was a success, or why did it last so long? I am sure many of the endeavors were successful as transition economies. For example, the Church instigated wine industry in southern Utah was successful until the railroad was able to bring in cheaper wines from California. I would call that a successful transition rather than a failure. Another communal program which was vital to Utah’s economic viability when the community was about to go bancrupt due to a cash flow problem, but is often stated only in a negative way — is Johnston’s Army. In reality it functioned as an imported communal market for the Saiants that relieved the cash flow problem in a critical period. So was that part of the persecutions that contributed to the failures, or was it persecution that contributed to the successes.

  5. Frank McIntyre
    May 16, 2005 at 2:04 pm

    Lorin, what you say about the tithing store is theoretically true of any store. I take it you are saying that the tithing store was not responsive to the market, though, and thus was more powerful?

  6. Lorin
    May 16, 2005 at 2:16 pm

    Incidentally, as I read the literature for that period (and I would appreciate confirmation), there never was a United Order in Missouri. The United “Order” in the D&C was a code word for the “United Firm.” Because of persecution, the Church wanted to hide the fact that a few men were directed by the Lord to organize as a partnership to handle the economic affairs of the Church. The “corporate” structure was not in existence and available at that time. To have the partnership known to the public would provide targets for those intent on doing harm to the Church. So the United “Order” of the Misssouri period only involved 2-3 people. Their economic system is properly referred to as the Law of Consecration. Brigham Young just picked up the code words “United Order” and used them for his programs in Utah. When Nauvoo was founded, a corporate structure was available and insisted upon by the state of Illinois. So the transition took place. In other words, the United Order in the Missoui period and whatever they called the corporation in the Nauvoo period, were the precursors to what we now call (I believe) the Corporation of the President, or something like that. Any confirmations to my understanding of this issue?

  7. Jed
    May 16, 2005 at 2:37 pm

    Lorin: Mormons are uncomfortable with the word “failure,” because it seems to undermine God’s work. If a program “failed,” we sometimes assume, that must mean either the leaders were misguided or some other factor (unrighteousness, persecution) tied their hands from carrying out the plan. Failure in small things can be tolerated, but in larger programs it cannot be countenanced. We therefore look for successes as a way of justifying the inspiration of the prophets. We are caught in the battle of belivers and unbelivers.

    If we eliminate the word failure from the vocabulary, the historical question remains the same, namely: Why does the church not practice property sharing when the early prophets and the early revelations (e.g. “if ye are not equal in earthly things ye cannot be equal in heavenly things”) called for that system of living? That is a historical question whose answer cannot be found in the minor successes along the way. It is a historical question, not a faith question.

  8. Nate Oman
    May 16, 2005 at 2:44 pm

    Lorin: The short answer to your question is that the United Firm was an unincorporated joint stock company, which meant that it had no seperate legal personality and provided no limitation on liability, corporate immortality or the like. In Nauvoo the Church incorporated under a statute that severely limited the ability of the Church to own property, with the result that most Church enterprises continued to be legally owned by various Church leaders, mainly Joseph Smith. In the Utah period, the legislature passed a law ganting a charter to the Church, as well as to the PEF and various other organizations. This law was subsequently repealed by Congress (several times as it happened). By this time, the idea of the general incorporation statute (which first appeared in America in the 1860s) had become general and the Church created a network of regional corporations that owned not only most Church assets but also most of the Church cooperatives. The Supreme Court finally upheld the disincorporation of the Church in 1890, but by that time most Church property was held elsewhere. The U.S. Attorney in theory had the legal ability to trace this property and pull it into the defunct estate of the Church, but the Church and the feds struck the deal surrouding the Manifesto before this process really got under way.

  9. Lorin
    May 16, 2005 at 2:47 pm

    Re: #5. I believe at that period of time there was a very limited “market” operating because of a shortage of cash among the Saints. They were in many cases reduced to a sytem of barter. They often had to pay tithing “in kind.” So the Tithing Store received merchandise and had to deal with it. I don’t believe the Tithing store intended to be manipulative or be an instrument of centralized control. They probably tried to stay at the “market” price as if there was a going market. But as an uninteded consequence they became the pricing standard. If they were more powerful for a time, it was because of default, I suppose.

  10. Nate Oman
    May 16, 2005 at 3:06 pm

    Jed and JWL: I agree with much of what you say, particularlly with regard to my over simplification. (But hey, this is a blog post and my books are at home.) My comparison to Lenist economies was not meant to be a moral analogy or even necessarily a strong economic analogy. Rather, I offer it as an example that graphically illustrates the problems of co-ordination, information, and control.

    I think that you are right with regard to the ultimate impotence of Zion’s Central Board of Trade, and the proliferation of various communal forms. ZCMI was a rather more robust attempt to control prices, but it was ultimately abandoned in the face of economic and political pressure. One of the reasons, however, that the Great Basin never developed into an Orderville writ large, however, was not only that people were not ready or willing to do so. It also was simply beyond the administrative capacity of the Church to carry off the kind of central planning that would be involved in such a thing.

    There is an analogous issue in the economics of the firm. Coase famously argued that the firm develops when the transaction costs of decentralized market ordering exceeds the various information costs (he doesn’t use this language but this is the basic gist of his argument, I think) of centralized managment. Most of the United Orders in Utah — such as that at Brigham City — is probably best conceptualized as a firm rather than a communistic society. It is worth pointing out, however, that the same point with regard to information and complexity applies within firms. Hence, as technology and communication has decreased transaction costs we have witnessed the downsizing of firms and/or the flattening out of hierarchical or centralized organizations. For example, end to end production of a single product — say pine furniture as in the Brigham City co-operative — requires that a central planner allocate resources to each phase of production, e.g. cutting timber, dressing the wood, assembling furniture, mixing paints, doing the graining, etc. In relatively simple economic circumstances such resource allocation can occur consciously, often by a single person — think of the example of a craftsman who can transform a tree into a finely crafted dining room table. However, as the economy becomes more complicated and specialized (the two go hand in hand) the process becomes decentralized: one person cuts the tree and sells timber, one person forms the timber into furniture, one person produces and mixes the paint, one person applies the paint, etc. At each stage the process the price mechanism intervenes to distribute resources. Hence, the issue of information and complexity remains even if one doesn’t envision anything as dramatic as a centrally planned economy.

  11. JWL
    May 16, 2005 at 3:11 pm

    From #8: “By this time, the idea of the general incorporation statute (which first appeared in America in the 1860s) had become general and the Church created a network of regional corporations that owned not only most Church assets but also most of the Church cooperatives.”

    Nate —

    The first part of your sentence is correct. For example, the Utah territorial general incorporation statute was enacted in 1870, which was actually ahead of a number of states. The Church also may well have created local corporations to hold Church assets. However, Arrington, Fox and May and other researchers indicate that the ownership of the co-operatives was generally held by the participants rather than the institutional Church. This is a very important distinction because it represents one of the principal ways in which a united order system differed (and would differ) from a centrally-planned and controlled economy as per the comparison in your initial post.

  12. Nate Oman
    May 16, 2005 at 3:14 pm

    Lorin: With regard to tithing stores, it is important to remember the tithing script circulating outside of tithing offices as well. For example, I could take $2 of tithing script and use it to purchase produce froma Bishop’s store house, but I could also use it to purchase produce from my neighbor, buy labor, pay a debt, or the like. Hence, there were pressures on the prices of bishop’s storehouses even if there was not strong competition from other mechantile establishments. You raise a very interesting point, however, as to how the prices in the bishop’s store house were set and to what extent the Church controlled the issueance of tithing script in order to keep the currency from inflating. I know that when particularlly hard winters killed off a large portion of the Church’s tithing herds that it had an inflationary impact on the circulating script with correspondingly adverse impacts on the economy of the territory as a whole. I don’t know who controlled the actually issuance of script (Church HQ? Stake president? Bishop?). I would love to know if anyone can tell me.

  13. d, Nate Oman
    May 16, 2005 at 3:21 pm

    JWL: What you say is not inconsistent with what I am saying. My understanding is that the arrangement would frequently work like this: A stake sets up a cooperative enterprise — say a sugar beet processing factory. Church leaders solicit donations/operating capital to purchase machinary, etc. Members in return are issued shares of stock. Church leaders also hold stock as individuals, and in some cases other Church corporations will kick in some money and in return will recieve shares of stock. My point was that in some cases these stake-based co-operatives would also hold title to things like local meeting houses, tithing funds and produce, or stake academies. The point was that you don’t want the “institutional church” (ie the Corporation of the Church of Jesus Christ of Latter-day Saints chartered by the Territorial Legislature in the 1850s) to hold any of the property because this particular legal entity has been dissolved by an act of congress being challenged in the federal courts and all of its assets (ie assets titlted to the Corporation of the Church of Jesus Christ of Latter-day Saints) are at risk of being escheted. By “Church created” I don’t mean that these stake corporations were somehow subsidiaries owned by the central church corporation, as this arrangment would completely defeat the dispersing Church assets. Rather, I mean legally independent corporations created under the direction of the ecclesiastical organization of the Church, an organization that needn’t have any seperate legal personality at all.

    Finally, I am not sure how the distinction between a centrally owned corporation and corporation owned by workers makes all that much difference to the point I was making with regard to centralized decision making and information. First, dispersed ownerhip doesn’t necessarily mean dispersed control. Indeed, centralized control and dispersed ownership is the rule rather than the exception in corporations, so all of the issues of centralized management remain even when the ownership is dispersed. Second, even when dispersed ownership does mean that there is some sort of dispersal of decision making procedures – say frequent voting on key managment decisions – all of the problems of information aggregation remain. Collective decisions making procedures are prone to precisely the same problems of information as autocratic decision making procedures. This is why democratic communism is just as likely to be an economic failure as dictitorial communism. It is information not authority that drives the argument, so the ownership issue is rather beside the point.

  14. May 16, 2005 at 3:23 pm

    “If complexity rather than sin or persecution ultimately spelled the end of all-encompassing Mormon communal economics, then the decision of the Church to abandon such efforts takes on new significance, for complexity is not inevitable. It is possible to retreat into simplicity….The decision to embrace economic complexity – and with it the market – ultimately is what has allowed Mormonism to expand. We stand on the threshold of becoming a global religion in large part because Brigham bought stock in the Union Pacific, and Wilford and Joseph F. rejected, if you will, the Amish option. ”

    A persuasive argument, though I think JWL’s point about self-sufficiency is an important one. The complexity which you claim (probably rightly) that the various communal economic arrangements attempted by the 19th-century church were not able to negotiate was thrust upon those same arrangements at least in part because the Saints had ended up in a barren desert, and (at least part of the time) aimed to make that barren desert wholly self-sustaining, rather than creating a limited but still strong economic community. Perhaps you would argue that this observation simply leads back to your main point: a “partial United Order” would be one which was already implicitly acknowledging, by picking and choosing which socio-economic aspects of the community ought to be subject to collective priorities and which needn’t be, that it cannot survey or control all the economic transactions and preferences which might occur within any given community, and so (one might think) the obvious question arises: why try to meddle with any of them? Perhaps one of the real lessons of the many communal economic failures (both public and private) which can be found throughout LDS history is not to bite off more than you can chew.

    As you say, simplicity is a choice. But it is not an either/or choice; there’s a broad continuum out there (multiple continuums, in fact) along which one may choose to situate oneself in pursuit of economic arrangements which seek to make possible, here and there, enclosed and egalitarian spaces of “simple” economic activity. To seek a wholly self-sufficient simplicity means to reject the market entirely, and, as you note, no modern leader of the church has apparently ever been willing to promulgate the “Amish option”–all have been believers in private property, which means the need for fairly open-ended exchange arrangements, which means complexity, which means some kind of market as a means of addressing that complexity. But you can have localized simplicity; you can protect this industry, ban that product, set those prices, encourage these savings, discourage this technology, provide for that kind of socio-economic compensation, etc., without rejecting the modern world entirely. Will a black market emerge in response to any such control? Of course. Does the mere existence of a black market provide conclusively prove that the costs of attempting to preserve some kind of particular simplicity, in response to some particular (perhaps prophetically foreseen?) need or development, are always and utterly unjustifiable? I have no idea why that would be–unless, of course, you assume (and why would you?) that markets are some sort of obvious and natural feature of human being itself, and thus always get to trump any obstacle whenever they make their presence felt.

  15. Steve Evans
    May 16, 2005 at 3:41 pm

    “A stake sets up a cooperative enterprise – say a sugar beet processing factory.”

    That’s all that matters to you, Oman — the sugar beets! Get off it, already!

    As pertaining to self-sufficiency, Russell: why would a United Order need be self-sufficient? Are we worried about being beholden to political or religious interests contrary to our own? It seems to me that we could address those concerns contractually without too much fuss.

  16. JWL
    May 16, 2005 at 3:46 pm

    Nate —

    I was writing #11 as you were posting #10.

    On the level of actual historical practice, the Utah co-operative companies responded to competitive pressures. In contrast to our current economy, at that time the efficiencies generally lay with increasing firm size. As an example, having merchants combine as the ZCMI was an economically reasonable respsonse to competitive pressures from non-Mormon merchants with better access to Eastern sources of goods. Admittedly, in rural areas sometimes the Church co-op or tithing office was the only game in town, but in those settings that economic position was no different than that of the only store in town in any small rural economy.

    Again, I agree that other factors impeded the survival of the united order effort in Utah, and many of them were of the Church’s own making (such as Brigham’s unrealistic attempt to achieve economic self-sufficiency as noted in my #1 above). However, your abstract criticisms based on economic theory aren’t really applicable because they assume economically monolithic behavior that just doesn’t fit the historical facts.

    That said, on an abstract theoretical level one could ask if a united order economy would not run into the problems you describe, but I think you are making some assumptions about the nature of such an economy that do not comport with the historical or doctrinal record. For example, why do you assume that a “united order” economy could not incorporate market-based pricing and informational mechanisms? As I have noted, the co-operatives were privately held enterprises. There is nothing in either scripture or prophetic statement that would foreclose co-operatives from competing with each other or otherwise behaving in economically efficient ways.

  17. JWL
    May 16, 2005 at 3:53 pm

    Further to my #16 after reading Nate’s #13:

    In other words, is there anything inherent in the united order experience that says that they would suffer more from the information problem than any other private firm in comparable curcumstances?

  18. Nate Oman
    May 16, 2005 at 4:09 pm

    “In other words, is there anything inherent in the united order experience that says that they would suffer more from the information problem than any other private firm in comparable curcumstances?”

    If we mean by United Order the sort of limited-purpose joint-stock companies that emerged in the the two decades before 1890, I think that the answer is probably not. However, communal economics as you pointed out was a matter of many different sorts of institutional arrangments that as often as not were tied to several overarching concerns, which often ran at cross purposes.

    I actually think that the early land policy of the Saints in Utah is probably more interesting here than were the co-operatives. As I understand it, Brigham essentially dispensed with the market in land in Utah. Real-estate was centrally distributed and was inalienable. This constituted a rather massive interference with the price mechanism given the economy of the time where the major economic asset was land. In the context of the late 1840s and the early 1850s this policy of centralized distribution of what amounted to the majority of the capital in the community outside of the price mechanism worked relatively well. My point is that by the 1890s there is no way that Church authorities could have made a similar attempt to centrally distribute the majority of the economic capital within Mormondom outside of the price mechanism. By this point in time they clearly lacked the legal or political power to do so and it is doubtful that the members would have followed them as faithfully as they did a generation earlier. However, it is also important to realize that the by this time the economy had become so-much more complicated that Church authorities struggled with the information problems involved in managing what amounted to rather small firms. However, had they insisted on a much simpler economy, one closer to the subsitence agriculture of the late 1840s, the information — and perhaps even the legal and political — problems would have been much, much more manageable. The fact is that they did not. They were willing — perhaps because they had no choice but perhaps not — to forego certain economic arrangments in order to accept the benefits conferred by the complexity of national and later international markets. Obviously, the issues here are all tangled up with the legal crusade against polygamy so that it is going to be impossible to get a clean analysis as a matter of history. However, to the extent that we are interested not simply in history qua history, but also in history as a point from which to abstract to other issues, the kind of simplifying theoretical structure I am trying to use is, I think, justified.

  19. May 16, 2005 at 4:14 pm

    “[W]hy would a United Order need be self-sufficient?”

    You misunderstand me, Steve; I meant to agree with JWL that the drive to merge a concern for collectively oriented economic “simplicity” with a mandate for self-sufficiency probably contributes to making the former impossible. In other words, you’re right: the moral point striving for a United Order is not necessarily invalidated by acknowledging that certain elements of economic life can’t be incorporated within it.

  20. Nate Oman
    May 16, 2005 at 4:18 pm

    Steve: We have only dimly begun to think about the central importance of these particular tubers. I am simply trying to get you to turn off the Tivo with beet-encrusted meaning of your faith!

  21. May 16, 2005 at 4:23 pm

    Nate, nice comments. You’re looking mostly at the production side here, a United Order organization as a firm or production co-op. I haven’t seen much discussion that looks at these organizations as consumption cooperatives, giving the Saints, as a group, increased bargaining power vis-a-vis outside merchants or firms.

    An early form of this consumption co-op mentality was seen on the Zion’s Camp expedition (and other early migrations), where one LDS agent would be appointed to bargain for buying provisions from towns along the way, avoiding the problem of individual Mormons bidding against each other and forcing prices up. Later, in Utah, this coordinated buying power was used to boycott uncooperative “gentile” merchants, or LDS merchants who didn’t follow the rules or were otherwise out of favor with the local leadership.

    Obviously, this kind of organization of consumers, tipping the bargaining power in favor of consuming Mormons and against individual non-LDS towns or merchants, could be highly unpopular with merchants and sellers, stirring up resentment against the Mormons, who somehow seem to be “cheating” by working together to get lower prices or other concessions. What is interesting, I think, is that consumers are almost never able to coordinate and exert this kind of bargaining power, but the early Mormons were able to do it. (Technically, to enforce coordinated group action, you need a mechanism for identifying and disciplining individual “cheaters,” which might explain why Mormons could pull it off when others couldn’t, but that’s a different discussion.)

  22. Jed
    May 16, 2005 at 4:41 pm

    “As I understand it, Brigham essentially dispensed with the market in land in Utah. Real-estate was centrally distributed and was inalienable. This constituted a rather massive interference with the price mechanism given the economy of the time where the major economic asset was land.”

    “centrally distributed” in places like SLC and Ogden, but the degree of control can be overestimated. Squatting ruled most of the small communities. The “central distribution” idea took an interesting twist in 1868-69, when the federal land survey prompted BY to have all bishops put unclaimed property in their own (the bishop’s) name and have all the lesser saints put their squatted property in their own name. That meant property was held both collectively and individually. BY worried over a non-LDS takeover in the years after the completion of the TransCRR.

    “My point is that by the 1890s there is no way that Church authorities could have made a similar attempt to centrally distribute the majority of the economic capital within Mormondom outside of the price mechanism. By this point in time they clearly lacked the legal or political power to do so and it is doubtful that the members would have followed them as faithfully as they did a generation earlier.”

    I agree with this, but I wonder, again, if complexity is the reason. The tithing scrip circulating until the 1910s functioned to simplify the complexity and worked to eliminate markets. I think much of the trouble was that the leaders were indulging in markets at the same time they were arguing for the elimination of them. Mormon-operated local merchandizers, and, later, the cooperatives, stocked their shelves with a cornicopia of goods from the east even as rhetoric from the pulpit advocated home industries. The down and back waggon trains had brought supplies (some of them exotic, impossible to produce in Utah) from the very beginning, from the early 1850s on. People had acquired an appetite for markets from living in Nauvoo. Once the Utah houses and kitchens were stocked with magic lanterns and silk scarves, there was no turning back. The Lion House itself was stocked with the eastern china. You’re not going to get people to empty their front rooms of goods they have had for years and come to see as necessary, and Utah Mormons could never replicate them all.

    I agree with this.

  23. May 16, 2005 at 9:58 pm

    You might want to look at Yugoslavia’s form of communism or at labor managed firms. Both have significant places where they work very well, and places where they are vulnerable.

    If you have a slow economy and labor managed firms, you can have a stable economy without the problems here (mostly because you have markets handling distribution).

    Some interesting thoughts, especially since Yugoslavia was stable, fed everyone without foriegn aid, and prospered until Tito died and sugar beets were introduced.

  24. May 17, 2005 at 12:50 am

    Nate, you wrote, “one of the reasons, however, that the Great Basin never developed into an Orderville writ large, however, was not only that people were not ready or willing to do so. It also was simply beyond the administrative capacity of the Church to carry off the kind of central planning that would be involved in such a thing.”

    Why do you think the church would have wanted Orderville “writ large” and not simply hundreds of fairly autonomous Ordervilles? And wouldn’t that make a rather big difference in the information problem?

  25. Lorin
    May 17, 2005 at 2:49 am

    Addendum to #24:
    Also, when Nate says they were “not ready or not willing” it sounds like there was a desire for that to happen (Orderville writ large) from the Church’s point of view, but that there was some resistance or feet dragging. As I understand it, BY wanted the local groups to choose the particular model of cooperative effort that they wanted to have. Sometimes a group would start out with one model and change their minds and go to another. It was all up to them. I don’t think one model was supposed to fit all. There was no specific ideal model that success or failure could be judged against. The only criterion was “Did it work?”

  26. Nate Oman
    May 17, 2005 at 2:05 pm

    Clark and Lorin: I think that you make fair points. I don’t know that there was any particular desire to make an Orderville writ large, although Zion’s Central Board of Trade and the Utah-era School of the Prophets indicate a certain (mainly ineffectualy, conflicted, and half-hearted) yen for central planning. Clark I do think that you are exactly right regarding lots of little Orderville’s versus one big Orderville, but that is precisely my point, namely that complexity is as important a limiting factor on certain kinds of economic arrangements as sin or persecution.

  27. JWL
    May 17, 2005 at 4:21 pm

    Nate —

    I think that everyone would agree that any effort to actually implement any kind of “united order” system in this mortal realm would be subject to every aspect of real world economics — supply and demand, monetary policy concerns, availability of capital, organizational behavior and labor psychology factors, etc., etc., etc. as well as the complexity of the economy. That is almost a tautology. Your post assumes some propositions which would make it more than a wordy restatement of that obvious point:

    (1) one reason the actual historical united orders efforts failed was that they were subject to excessive central planning by the Church, and/or
    (2) doctrinally, the united order requires central planning.

    The OH and MO united orders were too small and short-lived to have suffered from the defects of central planning. We have seen in the comments that the longer-lived and larger UT united order effort of the 1870s and early 1880s did not in fact have much actual central planning and even if there was some leanings in that direction they were done “ineffectualy, conflicted, and half-hearted” as you correctly note. Therefore, the defects of central planning were not one of the reasons the UT united orders did not continue, although there may well have been other factors in addition to unwillingness of the participants and outside oppression.

    This, however, leaves us with assumption #2 that central planning might be required or implied doctrinally for a united order economy in this world, in which case your point could be very relevant. I find the fact that someone as thoughtful and knowledgeable as you would make that unstated assumption to be very telling. It is my impression that that is an assumption that is widely shared by Church members. In part I believe that this is because they extrapolate how a united order might work from the highly centralized and bureaucratized correlated nature of modern Church administration and assume that a united order economy would be as centrally planned and controlled as everything else in the Church today. This leads to an assertion and a question:

    Assertion: Central planning is not required doctrinally by the united order, and

    Question: How might the issues of complexity and information you raise here apply to the current very centrally planned operations of the firm known as the Church of Jesus Christ of Latter-day Saints?

  28. Nate Oman
    May 17, 2005 at 5:23 pm

    JWL: With regard to your question, I blogged about this a while back. Check out “The Industrial Organization of the Gospel”

    With regard to your assertion, I suppose that I have a more capacious notion of central planning than you do. Assigning all of the land in the Salt Lake Valley seems like central planning to me, as does the organization of any firm from the Brigham City Co-operative to Archer-Daniels Midland. Hence, I think that your assertion is only correct if one views central planning as a phenomena confined to command and control economies. However, it seems to me that central planning can occur on a smaller scale as well. My point is not that this is always bad or always doomed to failure. Rather, my point is that it always presents a particular sort of problem, namely the problem of information. This is different from problems of persecution or sin.

  29. May 19, 2005 at 10:55 pm

    Let me know when you guys are serious about the issues.

    There are working models for labor managed firms (want to understand employee owned railroads, small scale steel plants or Hutterite communes? — how about law firm dynamics?), a large base of theory, discussions about which kind of Utopias work for the parents but not the children and why, and communistic systems (such as Yugoslavia under Tito) that actually worked in terms of production and keeping everyone fed (assuming anyone is interested in quasi-libertarian free market communism).

    Thought I’d check in to see if anyone was going to address those issues. I’ll note that the new dean of BYU approaches some of them in his discussion of tribes, and that the agricultural cooperative movement was very successful until technological changes relegated it to a smaller place (though the cooperative movement is still around).

    Anyone care to discuss the magic numbers of 100 and 200? Know what they are and how they apply?

    Anyway, just checking through.

  30. May 20, 2005 at 12:26 am

    Hmm, that last post needs redacting. I should have written when I had more time and less crankiness.

    Apologies extended.

  31. JWL
    May 20, 2005 at 10:17 am

    Stephen —

    All of those are fascinating issues to me. However, I think that Nate was making a much narrower point in his initial post and we were commenting off of that base. I would love it if timesandseasons would have you guestblog on some of these issues, or link us to another blog where you discuss them.

  32. May 20, 2005 at 8:33 pm

    I may do a post, since I’ve been thinking about Utopias for about thirty years. One significant problem is that many utopias for the parents are disasters for the children. Others work only so long as they are in a vacuum. And there is a very specific size limit of 100 to 200 adults for communal work projects.

    Then there and trend and values issues. Much of what made parts of Europe stable was that handcrafts were valued over machine manufacture, and traditional garb was valued over fads. Didn’t survive television, but once you create stable styles and trends, you’ve created a powerful sustaining force.

    Larger groups can hire managers as outside consultants. I’m familiar with a Union that outperformed its competitors that way until they took the tasks in-house as an excuse to pay some of the leaders more. They got decertified. In California. Would have been better off with the consultants.

    I need to organize all the sub-issues and discuss them. But it is a huge and complex area, with a great deal of history and many successes.

Comments are closed.