The Fracking Boom as — Not the 19C Gold Rush! — but the 18C Land Bubble

The Economist has an interesting but, I think, historically misguided piece paralleling the current shale energy boom, especially in the West, with the Gold Rush of the 1840’s. And the similarities are indeed obvious: feverish greed, quick mineral wealth, smelly camps full of rowdy and frustrated men, American “westernness.” That’s all summed up in the old expression “black gold.”

But even as it strains comparisons past the breaking point, the piece itself reminds us, explicitly, that the thing about the Gold Rush was that any shmoe with nothing but a pick and a sieve could start looking for gold and might indeed find it: many did; others failed to. The Economist piece therefore sees the Gold Rush as something new in the world, something rowdily democratic and quintessentially American.

Whether or not that’s true, in the fracking boom, by contrast, the guys in the camps are not self-employed treasure-seekers competing with one another in a quest to wrest from the earth enough personal wealth to live a life of riotous idleness. The Economist piece itself notes that they’re workers employed by the big companies that can afford the awesome, actually terrifying technology on which this boom relies.

Nobody doing the actual labor, that is, will reap the boom’s immense profits. For the ordinary person, this is a boom in employment — of working, that is, on behalf of somebody else’s profit. To the ordinary person, the fracking boom holds out no hope, misguided or otherwise, as the Gold Rush once did, of never having to work again. That opportunity remains with the elites and their progeny.

It’s axiomatic, for the Economist, to view the Gold Rush as democratic, and therefore quintessentially American. So the piece must make the Gold Rush the first American fever for quick untold wealth, thus the template for all later booms. The piece therefore gets confused about meanings, for American ideas about wealth and democracy, of both the Gold Rush and the shale-energy boom.

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The Gold Rush wasn’t the first such event in America. The land-speculation bubble of the 18th C. was the first great American speculation rush — closely intertwined, during the Revolution, with speculation in flurries of state and federal war bonds.

And while it’s less romantic, to us, than the Gold Rush, the 18th C. land-speculation bubble has two features that make it more grimly salient, I think, than the Gold Rush, both to our current boom and to the history of American wealth, booms, and democracy. Continue reading