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Order Without Law? Property Rights During the California Gold Rush


  • Karen Clay

    () (The Heinz School, Carnegie Mellon University)

  • Gavin Wright

    () (Department of Economics, Stanford University)


The paper reconsiders the nature of mining districts and property rights during the California gold rush. According to a widely accepted view advanced by Umbeck (1977, 1981), in the absence of effective legal authority, district codes established secure property rights in mining claims. Such accounts neglect essential aspects of the economic context, specifically that the gold rush approximated an open-access race for a small number of high value deposits. We show that mining district codes gave equal attention to the rights of claim-jumpers as to claim holders, a balance that in practice generated chronic insecurity and litigation. A simple game-theoretic model illustrates stylized features of the situation.

Suggested Citation

  • Karen Clay & Gavin Wright, 2004. "Order Without Law? Property Rights During the California Gold Rush," Discussion Papers 03-033, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:03-033

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    References listed on IDEAS

    1. Zerbe, Richard O. & Anderson, C. Leigh, 2001. "Culture And Fairness In The Development Of Institutions In The California Gold Fields," The Journal of Economic History, Cambridge University Press, vol. 61(01), pages 114-143, March.
    2. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, March.
    3. Lueck, Dean, 1995. "The Rule of First Possession and the Design of the Law," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 393-436, October.
    4. Anderson, Terry L & Hill, Peter J, 1990. "The Race for Property Rights," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 177-197, April.
    5. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124-124.
    6. Clay, Karen, 1997. "Trade without Law: Private-Order Institutions in Mexican California," Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(1), pages 202-231, April.
    7. Umbeck, John, 1977. "The California gold rush: A study of emerging property rights," Explorations in Economic History, Elsevier, vol. 14(3), pages 197-226, July.
    8. Robert A. Margo, 2000. "Introduction to "Wages and Labor Markets in the United States, 1820-1860"," NBER Chapters,in: Wages and Labor Markets in the United States, 1820-1860, pages 1-5 National Bureau of Economic Research, Inc.
    9. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    10. Stiglitz, Joseph E, 1976. "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, American Economic Association, vol. 66(4), pages 655-661, September.
    11. Wright, Brian Davern, 1983. "The Economics of Invention Incentives: Patents, Prizes, and Research Contracts," American Economic Review, American Economic Association, vol. 73(4), pages 691-707, September.
    12. David, Paul A & Wright, Gavin, 1997. "Increasing Returns and the Genesis of American Resource Abundance," Industrial and Corporate Change, Oxford University Press, vol. 6(2), pages 203-245, March.
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