Politics & Policy

Recovering the Spirit of ’49

Could there be a Gold Rush today?

Think back to the 19th-century Gold Rush of the American Far West. Towns emptied, schools closed, churches went quiet, houses were shuttered. People rushed from all over the world to take a chance at striking it rich and making a better life. People individually endowed by their Creator with creativity, talent, and grit risked everything. Motivated by self-interest and a shot at a better life, they forged westward.

These people came from all walks of life and all socioeconomic classes, and they packed their life possessions into one wagon or one bag and took a chance. They sailed from all over the world on voyages that lasted months on ships with the vilest conditions — often surviving catastrophic ocean storms. Americans from the east coast and Midwest joined them, trekking sometimes six months across the plains and experiencing some of the most monotonous and difficult times of their lives. Out west, they encountered the Great Basin for the first time, summited the largest mountains they had ever seen, and survived the most arid desert stretches of the Humboldt sink. Many died of frostbite or starvation in the Sierras or general fatigue and dehydration in the desert. Before their journey was over, most would lose their wagons, mules, and oxen along the way.

Yet, those 49ers were undaunted, for they lived and they lost in the freest nation on earth. In the process, they invented a new style of American dream, as author H. W. Brands notes in The Age of Gold: “The new dream was the dream of instant wealth, won in a twinkling by audacity and good luck.” The golden dream, as Brands calls it, was enchanting, “holding forth the promise that wealth could be obtained overnight, that boldness and luck were at least as important as steadiness and frugality.”

The Gold Rush was a dramatic addition to the American Dream that had already captured the world’s imagination: the Jeffersonian model of a life based in liberty, in which, with hard work and dedication, an immigrant could eventually have his own plot of land, raise a family on it, and live free according to the religious and moral values of his choosing. America had come to be known as a place where people could break from the rigid social-class systems of their native countries and start anew. The Republic was founded on and fueled by the millions of immigrants who came here to build on this dream. The boot-strapper ethos fostered a great nation.

Then came the Gold Rush of 1848. Trains, shops, towns, churches, civic organizations, and cities all rose to accommodate it. Territories like Nevada gained near-instantaneous viability in the national economy as thousands flocked to places like Virginia City. Men like Mark Twain took up residence and both prospered and recorded the events of this frenzied time. Places like California became states, with cities like San Francisco booming overnight.

Initially, gold mining simply meant a pan and water for tens of thousands of “49ers.” Eventually, however, ambitious and clever pioneers developed innovative techniques and mining became an industry. Did we need the government to “invest” in this nascent industry? No: People and self-interest made the investment — and then did far more than any government program or agency would ever have envisioned. In the end, we exported the gold fever and the resultant technologies from the rush all around the world. Some immigrants rushed back to native lands like Australia to copy the California and Nevada models. This human flourishing also accounted for a world economic boom: Because the world economy operated on gold, writes Brands, the dramatic increase in gold supply “amply lubricated world trade.” Everyone profited from the rush, including Chile, China, Australia, France, and Peru, to name a few.

Flash forward to the New Deal era. The America that grew strong and vibrant on the backs and brains of the free started giving way to the seductive calls of a more “orderly,” “safe,” and “managed” society. A handful of highly educated individuals holding the highest of offices began telling this great nation of entrepreneurs that they could make life better for all Americans if they were only given the authority to do so. If only they could create more government agencies, redistribute wealth, and provide a safety net, they could take out all of the risk inherent in American life. As conditions worsened throughout the Great Depression of the 1930s and people clamored for reprieve from their circumstances, the answer from these highly positioned few within government was that there was a need for more money, more time, and more authority to end the misery. The most audacious call for a new America came from Pres. Franklin D. Roosevelt, who declared in 1936 that “we are fashioning an instrument of unimagined power for the establishment of a morally better world.” The alluring promise of a better life slowly worked on the American consciousness, and portions of the population began ceding their individual power to the national government in pursuit of it.

Strong majorities bemoaned the betrayal of the American ethos. Many warned (as can be seen in Amity Shlaes’s book The Forgotten Man) that more government was not the answer, but they were drowned out by media and government claims that the U.S. had forgotten how to grow.

Economic failures of the New Deal notwithstanding, the ideologues of the new-style America were not deterred. They pushed and pushed for more and more power. Never mind the admissions from Treasury Secretary Henry Morgenthau in 1939 that “We have tried spending money. We are spending more than we have ever spent before and it does not work” and that “after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”

The people that had the reins exhibited the very fault the Founders had warned us of 150 years earlier: the desire of man’s fallen nature always to seek more power. Madison’s admonition in Federalist 51 regarding the need for external and internal controls on government found new echoes: Friedrich Hayek and Bertrand de Jouvenel warned citizens that the end of liberty was near. Soon, de Jouvenel prophesied in On Power, freedoms would fall prey to the bloodthirsty minotaur, the ever-expanding State.

America is, nonetheless, blessed. We stand as the lone example of a people who founded themselves on the idea that we are free, with an unalterable list of inalienable rights, and that we would create and empower a government to do the few things we cannot do for ourselves. We are a people who chose not to be ruled by others but to rule ourselves. With our Constitution, we accomplished the most miraculous example of deliberative government mankind has ever seen. More than two centuries later, this worldview remains strong.

Which brings me to the second blessing of America. Because of our faith in the democratic process and the rule of law, we settle this debate continually in the voting booths. We also show the would-be rulers of every generation that we will not be ruled: We will rule ourselves. We saw the strong push against federal power after each generational power grab, the three biggest and clearest being the New Deal, the Great Society, and the Age of Obama. The natural-rights theorists are correct: Once liberty is experienced, you cannot take it away for long. Fearful lovers of liberty will always have this consolation.

Back to the Gold Rush. Could a similar phenomenon occur in America today? Would the confluence of executive agencies like the EPA, Interior, Bureau of Land Management, and OSHA allow something like a Gold Rush to occur on American soil? Has the ideological shift to government as an engine of growth, perhaps the engine of growth, changed everything and taken away the individual-centered impetus for growth prevalent throughout our history? President Obama said in his recent State of the Union address that we live in a different time, one that calls for different solutions to “more complex” problems. Friends of liberty should be on full alert when our democratically elected leaders tell us we need new solutions for our time, because next always comes a power grab.

Obama used similar rhetoric to assert that our government must take an active role in economic development. He boldly called for investment in green technology and high-speed rail — which represents, in essence, a bet that he can force a Gold Rush on his people: a green and urban age.

But do we need the government to solve our economic woes? Is it fixing our woes, or merely delaying the inevitable correction to a problem that was created by government in the first place? Even if the government could solve our problems, and this is a big if, how much liberty will we sacrifice in the attempt? How much money will we redistribute, how many regulations will we succumb to? Will life actually be better when the dust has settled? Where does it all end?

The “leaders” will lambaste the Gold Rush era, as they do all moments of American marvel. They will focus on the negatives and lose sight of the enormous tide of positives that result from American ingenuity. As Brands writes, the Gold Rush era was “hardly an unmitigated blessing,” but it was also “an enormously creative force” that “afforded the most basic freedom — freedom from want — to more people than had ever enjoyed such release.”

Are we not convinced that America is still capable of creating new wealth and new opportunities, free from the cautious, unimaginative, and restrictive hand of the federal government? Flash forward ten decades from the Gold Rush to 1950, and marvel at the astounding economy created following World War II, thanks to the foundation laid by the early pioneers. Then look forward four more decades to Silicon Valley and Hewlett-Packard, and note that San Francisco would not be an economic powerhouse were it not for the Gold Rush. Without the 49ers and their wild and free Gold Rush, our nation – indeed, the world – would be a much poorer place today.

— Adam Paul Laxalt is an attorney and former lieutenant in the U.S. Navy, Judge Advocate General’s Corps, who served on active duty from 2005 until 2010.


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