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.