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Understanding the gains to capitalists from colonization: Lessons from Robert E. Lucas, Jr., Karl Marx and Edward Gibbon Wakefield

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  • Harris, Edwyna
  • La Croix, Sumner

Abstract

Britain after the Napoleonic wars saw the rise of colonial reformers, such as Edward Gibbon Wakefield, who had extensive influence on British colonial policy. A version of Wakefield's systematic colonization plan became the basis for legislation establishing the South Australia colony in 1834 and the New Zealand colony in 1840. We use extended versions of Robert Lucas's 1990 model of coordinated colonial investment to show how Wakefield's institutions were designed to work. We also find that the analysis of Wakefield's system by Karl Marx in Das Kapital follows the same line of reasoning as Lucas's analysis of colonial institutions.

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  • Harris, Edwyna & La Croix, Sumner, 2021. "Understanding the gains to capitalists from colonization: Lessons from Robert E. Lucas, Jr., Karl Marx and Edward Gibbon Wakefield," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 348-359.
    • Handle: RePEc:eee:jeborg:v:187:y:2021:i:c:p:348-359
    DOI: 10.1016/j.jebo.2021.04.030
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    1. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
    2. Morgan Kelly & Joel Mokyr & Cormac Ó Gráda, 2023. "The Mechanics of the Industrial Revolution," Journal of Political Economy, University of Chicago Press, vol. 131(1), pages 59-94.
    3. Edwyna Harris & Sumner La Croix, 2020. "South Australia’s Employment Relief Program for Assisted Immigrants: Promises and Reality, 1838-1843," Working Papers 202008, University of Hawaii at Manoa, Department of Economics.
    4. Jaume Ventura & Hans-Joachim Voth, 2015. "Debt into growth: How sovereign debt accelerated the first Industrial Revolution," Economics Working Papers 1483, Department of Economics and Business, Universitat Pompeu Fabra.
    5. Jane Humphries & Jacob Weisdorf, 2019. "Unreal Wages? Real Income and Economic Growth in England, 1260–1850," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2867-2887.
    6. Edwyna Harris & Sumner La Croix, 2021. "Australia’s Forgotten Copper Mining Boom: Understanding How South Australia Avoided Dutch Disease, 1843–1850," The Economic Record, The Economic Society of Australia, vol. 97(318), pages 424-439, September.
    7. Douglas A. Irwin & Maksym G. Chepeliev, 2020. "The Economic Consequences of Sir Robert Peel: A Quantitative Assessment of the Repeal of the Corn Laws," NBER Working Papers 28142, National Bureau of Economic Research, Inc.
    8. Williamson, Jeffrey G., 1990. "The impact of the Corn Laws just prior to repeal," Explorations in Economic History, Elsevier, vol. 27(2), pages 123-156, April.
    9. Alan Dye & Sumner La Croix, 2012. "The Political Economy of Land Privatization in Argentina and Australia, 1810-1850," Working Papers 201207, University of Hawaii at Manoa, Department of Economics.
    10. H. O. Pappe, 1951. "Wakefield And Marx," Economic History Review, Economic History Society, vol. 4(1), pages 88-97, August.
    11. O'Connell, Darren & Austen, Siobhan, 2017. "The tortoise and the hare: how North's institutional ideas resolved a 19th century Australian fable," Journal of Institutional Economics, Cambridge University Press, vol. 13(1), pages 161-188, March.
    12. Piterberg, Gabriel & Veracini, Lorenzo, 2015. "Wakefield, Marx, and the world turned inside out," Journal of Global History, Cambridge University Press, vol. 10(3), pages 457-478, November.
    13. repec:oup:econjl:v:129:y:2019:i:10:p:2867-2887. is not listed on IDEAS
    14. Edwyna Harris & Sumner La Croix, 2020. "South Australia’s Employment Relief Program for Assisted Immigrants: Promises and Reality, 1838-1843," CEH Discussion Papers 03, Centre for Economic History, Research School of Economics, Australian National University.
    15. Edward R. Kittrell, 1973. "Wakefield's Scheme of Systematic Colonization and Classical Economics," American Journal of Economics and Sociology, Wiley Blackwell, vol. 32(1), pages 87-112, January.
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    Cited by:

    1. Hatton, Timothy J., 2024. "The political economy of assisted immigration: Australia 1860–1913," Explorations in Economic History, Elsevier, vol. 92(C).

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    More about this item

    Keywords

    Robert Lucas Jr.; Karl Marx; Edward Gibbon Wakefield; Migration; Systematic colonization; South Australia; Coordinated investment;
    All these keywords.

    JEL classification:

    • N47 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Africa; Oceania
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • N97 - Economic History - - Regional and Urban History - - - Africa; Oceania
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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