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Profits in the Wilderness

I’m currently reading John Steele Gordon’s The Business of America a collection of his essays from American Heritage on the history of business in the United States. The book has been a great read so far, but the first essay, “Profits in the Wilderness”, stands out for its relevance to space commercialization and settlement. It concerns the rise of the joint-stock corporation, the ancestor of the modern corporation, as a means of funding exploration of the New World, and its later adaptation by settlers to the task of town founding.

Even more ignored than technology as a driving force in history is organization. The full-rigged ship was extraordinarily expensive in the economic universe of Columbus’s time. If exploration’s full commercial potential was to be exploited, new ways of financing it beyond appealing to princes were needed. Spain did not develop these new ways and soon stagnated. England and Holland, however, developed the joint-stock company and prospered mightily…

[emphasis added] There are a couple of lessons in this paragraph alone. First, even the Renaissance explorers understood the limitations of government-funded exploration programs, and developed a new form of organization to overcome them. Second, the country which initially led in the exploration of the new world quickly lost that lead because it continued to rely on the old methods (and because it was corrupted by the easy wealth it initially gained from its activities, as Gordon explains elsewhere).

…[W]ithout the joint-stock company, the history of the United States would have taken a very different turn indeed…

To begin with, both the Massachusetts Bay Colony and the Plymouth Colony were organized as joint-stock companies. Some of the participants in these companies were known as “planters”. They were those who came to New England and contributed their labor to the success of the enterprise. Many of these, to be sure, while technically part of a commercial endeavor, looked for their rewards only in heaven, The men who contributed money but stayed in England, however, were known as “adventurers”, and they were certainly hoping for a quicker and more earthly return. (The old meaning of the word adventurer, by the way, still echoes in the modern term venture capitalist.)

Whatever the motives of the original settlers and their financial backers, the toehold the first New Englanders established on the American continent soon proved a refuge from the rapidly deteriorating political situation in old England after Charles I dismissed Parliament and assumed personal rule. In the first great Atlantic migration, about 25,000 people came to New England between 1630 and 1643. How to settle these people in so vast a wilderness in so short a time was no small problem…

[emphasis added] Note that that is just shy of 4200 people per Martian year.

Just consider all the things that had to be accomplished before people could actually take up residence in a new area of settlement. The colony’s government had to give permission. The site had to be chosen, The land had to be purchased from the Indians and surveyed (and the survey accepted by the government). The various lots — home lots, wood lots, planting lots, meadow, and swampland — had to be laid out and allocated fairly among the settlers. River frontage had to be divvied up and roadbeds situated. Bridges had to be built.

While a lunar or Martian settlement would, of course, have vastly different infrastructure requirements, it’s worth noting that settlement wasn’t easy even here on Earth where resources were abundant…while timber and arable land were plentiful, a prospective farmer couldn’t just go out with a chainsaw and clear his forested farm plot in a couple of days. Both the Moon and Mars contain abundant resources of their own, and while they may not be in forms we prefer, neither were many of the resources available to the early New England settlers. But, necessity will drive innovation in the future, just as it did in the past:

All of this took a great deal of organization and cost a great deal of money. The only suitable organizational model the Puritans had at hand was the joint-stock company, and it was immediately pressed into service as a model for town founding. Now, instead of planters and adventurers, there were “goers”, who settled permanently in the new community, and “stayers,” those who provided money and/or expertise but usually did not take up residence at all or moved on shortly…

Not only did they adapt the corporation model, the Puritans thereby invented two other modern institutions: the real-estate developer and the business consultant.

Regardless of occasional lapses, the town-founding system improvised in the wilderness by the Puritans proved very effective, and southern and coastal New England was settled with astonishing speed. To a large extent this was due to a new breed of men, a type so new there was not even a name for them in the English language until the middle of the nineteenth century: entrepreneurs.

Which is yet another example of the kind of unanticipatable innovations resulting from exploration and settlement of a new frontier — a benefit which should be promoted more by space advocates.

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