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Up The Road: The Gold Rush Boosts Business, Undercuts Marx

Hannah Cossey
/
Flickr

We’ve been talking about how California’s Gold Rush of 1849 created the state we know today. In his book California: The Great Exception, historian Carey McWilliams traces the key attributes of this exceptional place back to the gold rush—from its openness to new ideas and innovations to its egalitarian principles, these albeit married to an appreciation for big money and the empires it creates. Not necessarily consistent, we Californians, but if it’s novel and meets a need, we may like it.

Chico’s own General John Bidwell, renowned internationally as an innovator in the field of agriculture, is an example close to home of someone who made big money panning for gold and then invested it in California’s future.

Mining the miners was another way to get rich. Levi Strauss made his fortune stitching up indestructible denim britches. Industrialist John Studebaker got his start making mining wheelbarrows—thus the Placerville nickname “Wheelbarrow Johnny,” before he joined his brothers to finance their new, hugely successful wagon-building company, later the Studebaker Corporation, an early auto maker. Studebaker is said to have gotten his start at a foundry and blacksmith shop in Chinese Camp, its ruins still standing.

Philip Armour, who later founded Chicago’s Armour & Company, started his empire selling preserved meats to the miners. Leland Stanford, of Stanford University fame, made his first fortune as a gold miner, the foundation for later railroad investments and political exploits as one of California’s Big Four.

Speaking of the nation’s first transcontinental railroad: The rush for riches—the rush to get people and goods to and from California—stimulated an astonishing array of communications and transportation innovations.

But the first and original manufacturing and business focus was mining itself, the breakthrough technologies that made faster, more efficient mining possible all around the world. As Carey McWilliams wrote:

“The discovery of gold, in combination with other factors, notably the isolation of the West, gave California a distinct head start over the other western states as a center of manufacturing. Once these nascent industries were established, they had the effect of attracting other industries.

“It was, above all, the cultural peculiarities of the things demanded—novel forms of mining equipment and lumbering equipment—which provided the stimulus for industrial activity. It was for this reason, very largely, that California became a manufacturing center almost at the same time it became a State. The rapid growth of population explains the demand, but it was the novelty of the environment that stimulated local invention and manufacture.”

So novel was the environment that created the California Gold Rush—and the cascading opportunities and innovations that came after—that even Karl Marx took note.

According to historian Donald Elder, “Finally (and ironically), the California Gold Rush impacted the work of Karl Marx. Marx had released The Communist Manifesto in 1848, and in it he had predicted that the bourgeois societies of Europe stood on the brink of revolution because of economic inequality. But soon, the California Gold Rush began to affect Western Europe, and economic conditions there rapidly improved. Marx recognized how gold had altered economic conditions, and wrote Das Kapital to describe these effects. Because of this, the California Gold Rush not only enhanced capitalism but also helped to shape the most famous critique of that system.”

Kim Weir is the founder of Up the Road, a nonprofit public-interest journalism project. She researches, writes, and hosts Up the Road, a radio show and mini-podcast about California co-produced by North State Public Radio. Kim got her start as a travel journalist in 1990 with the publication of the first and original Moon Handbooks Northern California, a surprise best-seller. Six other Moon books on California soon followed. She is a member, by invitation, of the venerable Society of American Travel Writers (SATW). Kim earned a BA in environmental studies and analysis, with an emphasis on botany and ecology, and also holds an MFA in creative writing. She lives in Paradise.