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Gold Rush Legacy

American Minerals and the Knowledge Economy

Karen Clay and Gavin Wright

November 2011, English

In this paper, Karen Clay and Gavin Wright argue that the gold-mining camps of California had a more complex governance structure than economic historians have supposed. In some respects, the mining camps were canonical examples of the emergence of private-order property regimes, key elements of which were eventually codified in state and federal law (Umbeck 1981). However, the property rights created pursuant to the mining contracts (or codes) were far less secure than most other types of real property rights. Indeed, claim jumping became the most common method of acquiring a claim because of rules that often favored claim jumpers who would put the claims to more immediate use.

In addition, Clay and Wright explore how the evolution of mining in nineteenth-century America fostered features that today are associated with a knowledge economy, including synergies between higher education and industry, federal support for scientific research and infrastructure, diffusion of codified forms of useful knowledge, and economic progress based on extension of the knowledge frontier. Thus, the conventional property rights story of the California gold-mining camps is only part (and perhaps not the most important part) of a larger tale about innovative advances in resource discovery, extraction, and processing that together created the world’s leading national mining sector.

This paper was presented at the Lincoln Institute’s conference entitled “Evolution of Property Rights Related to Land and Natural Resources” in 2010 and is Chapter 3 of the book Property in Land and Other Resources, edited by Daniel H. Cole and Elinor Ostrom.