Coyote Blog

Hey, what does a good capitalist have against gold and silver?  Nothing, per se, but I have been reading John Steele Gordon's An Empire of Wealth and it got me to thinking how important for the eventual success of the US it was the English and the Dutch, rather than the French and the Spanish, colonized most of the eastern US.

Very few countries colonized by Spain have been able to recover from the experience, even hundreds of years later.  When people decry imperialism, they should be thinking first of the old Spanish empire.  Their colonization was nearly entirely extractive - focused on pulling out gold and silver and some tropical agricultural products.  There was no thought of developing a colony that might grow in value over time through investment and entrepreneurship.  Perhaps worse, Spanish and French imperialism were entirely micro-managed top-down by the state, leaving a legacy of bad statist economics in the countries they colonized.  My previous post, though it focused on France rather than Spain, shows through statistics the legacy of poverty and bad government that this approach left behind.

So, how does silver and gold come into play?  Well, the US eastern seaboard is singularly devoid of precious metal ore deposits, which kept Spanish attention to the south, seeking more lucrative immediate spoils in Mexico and South America.  The lack of abundant fur animals like beaver kept the French to the north.  As a result, the US was left to be colonized by the Dutch and the English.  Unlike the Spanish and the French, most of this colonization was not military or state-run.  Most of the major colonization pushes were actually for-profit private enterprises.  Though these early colonies would have loved to find gold and silver, lacking this they had to find ways to develop the land and the New World to make returns for their investors.