Why Australia’s Gold Rush Ushered In Political Freedom (As Well As Wealth)

Nineteenth century gold miners brought democracy and property rights to Australia, as well as riches. But the history was at times bloody.

Historically, the connection between gold and liberty is a potent one. Indeed, it is no exaggeration to assert—if you will pardon the pun—that they are two sides of the same coin. Australia in the 1850s provides a sterling example.

Image Credit: Andrew Goddard, CC BY-SA 4.0 , via Wikimedia Commons

Gold’s allure dates so far back that to say it is “prehistoric” is not inaccurate. Long before any written records, it was widely prized. Though the yellow metal has also been found on every continent, it was not until 1848 in California and 1851 in the Australian states of New South Wales and Victoria that a genuine “rush” to acquire it unfolded on a grand scale.

The Australian Gold Rush that began in 1851 produced remarkable transformations. Australia’s population quadrupled from 437,655 that year to 1.7 million twenty years later.

For centuries before the mid-19th, dictatorial regimes quickly grabbed new gold for themselves or deployed force to stymie the efforts of ordinary people to acquire it. In the 1840s and ‘50s, both California and Australia (despite the latter being founded as a penal colony) were much freer places. Greedy kings and potentates were absent. A private citizen could buy or rent a piece of land, or stake a claim on vacant land, and keep whatever gold he found for himself. Gold fever in both California and in the Land Down Under, half a world apart, prompted large numbers of fortune-seekers to migrate and dig up whatever they could find.

Gold has multiple applications, from metallurgy to jewelry to art, but its most important utility in history has been as a preferred and freely chosen medium of exchange, or money. No other medium—especially government-issued fiat paper—yields the long-term economic stability that monetary gold can boast. Even today, the phrase “as good as gold” is a high compliment. No one ever declares that something is “as good as unbacked government paper” unless he intends it as an insult.

Big, rapacious, liberty-squelching governments typically hate gold, or at least gold in private hands as money. Why? Because they cannot print it. Because it is a reliable competitor for the people’s confidence. And because it exemplifies the very honesty that dishonest politicians despise. If they desire to control you or enrich themselves (or both), they will invariably seek to control money. They seem to know a version of the Golden Rule instinctively: He who owns the gold makes the rules.

In small, easily transportable quantities, gold represents highly concentrated wealth that its owners can take with them while escaping a repressive regime. People have concocted ingenious ways to do so, from putting it in their teeth to painting it and inserting it in wagon wheels. When governments debauch their paper currencies, gold is a primary refuge into which people flee.

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Lawrence W. Reed is FEE's President Emeritus, Humphreys Family Senior Fellow, and Ron Manners Global Ambassador for Liberty, having served for nearly 11 years as FEE’s president ...

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