Institutions, Colonisation and the Economic Development of Western Australia and South Australia, 1829 to 1900
Total Page:16
File Type:pdf, Size:1020Kb
School of Economics & Finance Institutions, Colonisation and the Economic Development of Western Australia and South Australia, 1829 to 1900 Darren Christopher O’Connell This thesis is presented for the Degree of Doctor of Philosophy of Curtin University June 2014 Declaration This thesis contains no material which has been accepted for the award of any other degree or diploma in any tertiary institution and to the best of my knowledge and belief, the thesis contains no material previously published or written by another person, except when the reference is made in the text of the thesis. Signed Darren Christopher O’Connell Curtin University | Chronology of Principal Events i Acknowledgments “There is no greater agony than bearing an untold story inside you” Maya Angelou y own personal experience of (de)colonisation occurred in March 1979 when I witnessed Britain’s Royal Navy evacuating Valetta Harbour in Malta (Figure 1) M following the expiry of the Anglo-Maltese defence treaty fifteen years after independence. I’ve also, as an adult, travelled to, and explored, many former colonies in various parts of the world, good and bad. History is a wonderful living phenomenon. The number of debts I have acquired in researching and writing this thesis beggars my ability to repay them adequately. There will be many who don’t get mentioned in this section, due to space limitations, but they will be, or have already, been thanked in person. Siobhan Austen and Felix Chan Figure 1: Spot the A uthor! deserve much of the credit for delivering this thesis, acting as surrogate mid-wives if you will. Both provided inspirational learning experiences at Curtin University and encouraged me to pursue further study after I had completed my undergraduate studies (2006). Siobhan’s class on Economic Theory introduced me to Douglass North’s work which enabled me to combine my love of history with my trade in economics. But first came the Source : Author’s private collection intermediate step of Honours (2007) bridging as it did the transition from undergraduate to PhD studies. Felix reawakened my love affair with mathematics during this “gap year” and I became determined to conquer my fear of statistical and econometric analysis. My professional life has certainly benefitted immeasurably from the experience. Barry O’Grady walked me through the experience of thesis and journal writing during my Honours year (2007). Although this beast is totally different from my earlier ii Chronology of Principal Events | Curtin University work on the derivatives markets, without the latter, the former would not have been possible (or it would have been of poorer quality) – the “L” plates were certainly valuable. Our collaboration over the years on various academic projects introduced me to a whole host of theoretical material which evolved into pivotal components of this research thesis. The staff and management at the Greensborough RSL in Victoria must be thanked because without their carefully maintained library, that held a copy of the all-important Australian Historical Statistics vol. 10, my thesis would, most likely, have struggled for flight. Their generosity in allowing me to use the club as my own personal office, as I furiously copied down masses of colonial data with rent payable in beer to general staff bewilderment, was much appreciated. Speaking of which, it must not go unremarked that the bulk of this thesis was constructed in pubs throughout Australia, usually located close to libraries, that served as congenial study environments when I was “on the road” gathering colonial data. The pub is, in my humble opinion, one of the better institutions that Britain bequeathed its colonies, as my dear-departed dog Nosey can attest. I’d like to thank the research staff at the State Libraries of New South Wales, South Australia, Victoria and Western Australia, particularly Steve Howell in Perth, for their help in locating sources of colonial data that helped to better understand those times. Tom Reynolds at the State Records Office of Western Australia was also an invaluable resource who uncovered numerous obscure data. Tim Barmby, Ray Broomhill, Stan Metcalf, Martin Shanahan, and Pamela Statham-Drew were also very generous in sharing their knowledge of economic history: methods and techniques. And finally a special thanks to my parents who gave me the gifts to enable me to get this far in life but will only open this thesis just long enough to read the dedication and acknowledgements. This thesis is as much dedicated to them as to the country that has given me so much in life. Advance Australia Fair! Curtin University | Chronology of Principal Events iii Institutions, Colonisation and the Economic Development of Western Australia and South Australia to 1900 Darren O’Connell Curtin University of Technology School of Economics & Finance GPO Box U1987 Perth, WA 6845 [email protected] Abstract This thesis adopts Douglass North’s institutional framework to explain why Western Australia and South Australia, established in 1829 and 1836 respectively as the only two non-convict colonies, had considerable disparities in economic growth up to 1900. Both colonies were established under different modes of organisation (colonisation). The method adopted for WA harked back to Mercantilism, famously condemned by Adam Smith because it led to under-investment in, and over-exploitation of, colonial assets. SA on the other hand was the product of a radical new theory in colonisation proposed by Edward Gibbon Wakefield whereby land, instead of being given away as in WA, was sold at a fixed price with the proceeds being used to subsidise gender-balanced immigration. Outcomes suggest that SA’s method of “systematic colonisation” introduced a better institutional matrix, compared to the initial institutions seeded in WA, allowing SA’s economy to develop sooner and at a higher rate of growth. However, once the detrimental effects of its method of foundation were eliminated, occurring on the eve of one of the largest gold discoveries of modern times, WA’s institutions finally provided the necessary incentives to effectively develop its economy such that by 1900, both colonies had an almost equal level of economic output. Keywords: Institutions, institutional evolution, path dependency, economic development, economic history, colonisation. iv Chronology of Principal Events | Curtin University Table of Contents Chronology of Principal Events .............................................................................. viii Glossary.............................................................................................................. xii Chapter 1: Introduction ......................................................................................... 1 Chapter 2: Institutional Economics ........................................................................ 19 Chapter 3: The Institutional Matrix ........................................................................ 52 Chapter 4: The Evolution of British Colonial Theory during the 1820s ........................ 74 Chapter 5: The Foundation of Colonial WA and SA ................................................. 101 Chapter 6: The Economic Institutions of Colonial WA and SA .................................. 115 Chapter 7: Other Growth Factors and the Economies of Colonial WA and SA ............. 171 Chapter 8: The Achievement .............................................................................. 230 Appendix A: Imperial Currency, Weights and Measures .......................................... 253 Appendix B: Maritime Explorations of the Colonies ................................................ 256 Appendix C: The Basket of Consumer Goods......................................................... 260 Appendix D: Population Density .......................................................................... 261 References ....................................................................................................... 262 Curtin University | Chronology of Principal Events v Charts Chart 1: Total Land Alienation per Capita, 1829-1900 ............................................ 122 Chart 2: Ratio of Agricultural Land to Total Land Alienated, 1850-1900 .................... 127 Chart 3: Number of Annual Colonial Patent Applications, 1860-1900 ........................ 136 Chart 4: Colonial Money Supply (M0), 1836-1900 ................................................. 139 Chart 5: Total Number of Colonial Bank Branches, 1836-1900 ................................ 143 Chart 6: Public Debt per Capita, 1850-1900 ......................................................... 146 Chart 7: Cost of Capital (%), 1850-1900 .............................................................. 147 Chart 8: British Fiscal Contributions to WA’s Colonial Administration, 1837-1900 ...... 151 Chart 9: South Australia Election Enrolments and Turnout, 1857-1900 .................... 153 Chart 10: Colonial Taxation per Capita, 1840-1900 ............................................... 155 Chart 11: Size of Government, 1837-1900 ........................................................... 157 Chart 12: Number of Churches per 1,000 of Population, 1837-1900 ........................ 162 Chart 13: Percentage of Population Receiving Education, 1850-1900 ....................... 166 Chart 14: Annual Rainfall Statistics, 1876-1901 .................................................... 174 Chart 15: Wheat Reaped per Acre Planted, 1829-1900 .........................................