Wakefield’s views on colonization were based on a dual analysis of Britain’s
need for an outlet for its surplus capital and population and a diagnosis of the causes
of weak economic development in colonies of new settlement enjoying access to
abundant land. His own schemes for ‘systematic colonization’ were intended as an
almost self-regulating solution to both of these problems. Making use of ideas
derived from the work of Robert Gourlay, Wakefield advanced a theory of growth in
new countries which was designed to support a plan of optimal development.
Contrary to the received view, he maintained that access to free or cheap land was
responsible for population dispersion, scarcity of labour for hire, and consequent
inability to reap the benefits of economies of scale through market concentration and
the combined efforts of capital and labour. Under these circumstances the ‘natural’
pattern of development led to stagnation. Convict labour in Australia and slavery in
the American South were both unsatisfactory expedients adopted to deal with a
problem that could only be overcome by charging a ‘sufficient price’ for public or
waste land which would deter premature dispersion, stabilize a revolving wage-
labour force, and create a fund that could be used to subsidize immigration. The
price was defined as one that was high enough to delay land acquisition by newly
arrived immigrants without capital of their own, and low enough not to discourage
voluntary immigration by reducing real wages and the return on capital.
Colonization on this plan required a new beginning in a colony that was not
contaminated by convict labour; and for this purpose Wakefield initially chose South
Australia, forming an association for this purpose in 1834. When his proposals were
diluted in operation by the founders of the colony (among them another political
economist, Robert Torrens), Wakefield turned his attention to New Zealand, serving
as the Director of the New Zealand Colonization Company from 1839 to 1846. In
1838 he accompanied Lord Durham on his mission to Canada and wrote the
appendix on land disposal to the resulting Durham report.
Wakefield’s ideas are of interest for a number of reasons. He belongs to the
non-Ricardian underworld by virtue of his attack on Say’s Law, the wage-fund
doctrine, and the associated idea that capital and labour could never be in surplus
together – a mirror image of the problem in colonies where both were scarce. Yet his
success in convincing John Stuart Mill and other economists of the correctness of his
diagnosis of British and colonial problems gave new significance to the export of
capital and labour to colonies and hence to the whole subject of colonization and the
development of new countries as a topic within orthodox political economy.
Wakefield also plays a part in the Marxian tradition, or rather its demonology,
as a result of Marx’s decision to devote a chapter of Capital (vol. 1, ch. 23) to
showing how Wakefield, under colonial conditions of labour scarcity, had been
forced to reveal the underlying logic of capitalist exploitation. What could be
achieved quite naturally under European conditions had to be created artificially in
new colonies, with the additional subtlety that having served a term of exploitation,
the wage-labourer had to pay for his replacement. One could also claim that
Wakefield, less unwittingly, anticipated Hobson and Lenin in providing an economic
interpretation of imperialism as a necessary response to stagnation in mature
capitalist economies.
In 1853 Wakefield finally practised what he had been preaching by emigrating
to New Zealand, where he died in 1862.
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