Why Nations Fail: The Origins of Power, Prosperity, and Poverty

property. They could certainly not sue anyone in court. In fact, they could not even give evidence in court. Sinclair knew this and probably stole the parcel. Though he would never admit it, he did boast that he could not be sued by the Cables. He was right according to British law. And in Britain the whole affair would have ended there. But not in Australia. A writ was issued to David Collins, the judge advocate there, as follows:
    Whereas Henry Cable and his wife, new settlers of this place, had before they left England a certain parcel shipped on board the Alexander transport Duncan Sinclair Master, consisting of cloaths and several other articles suitable for their present situation, which were collected and bought at the expence of many charitabledisposed persons for the use of the said Henry Cable, his wife and child. Several applications has been made for the express purpose of obtaining the said parcel from the Master of the Alexander now lying at this port, and that without effect (save and except) a small part of the said parcel containing a few books, the residue and remainder, which is of a more considerable value still remains on board the said ship Alexander, the Master of which, seems to be very neglectfull in not causing the same to be delivered, to its respective owners as aforesaid.
    Henry and Susannah, since they were both illiterate, could not sign the writ and just put their “crosses” at the bottom. The words “new settlers of this place” were later crossed out, but were highly significant. Someone anticipated that if Henry Cable and his wife were described as convicts, the case would have no hope of proceeding. Someone had come up instead with the idea of calling them new settlers. This was probably a bit too much for Judge Collins to take, and most likely he was the one who had these words struck out. But the writ worked. Collins did not throw out the case, and convened the court, with a jury entirely made up of soldiers. Sinclair was called before the court. Though Collins was less than enthusiastic about the case, and the jury was composed of the people sent to Australia to guard convicts such as the Cables, the Cables won. Sinclair contested the whole affair on the grounds that the Cables were criminals. But the verdict stood, and he had to pay fifteen pounds.
    To reach this verdict Judge Collins didn’t apply British law; he ignored it. This was the first civil case adjudicated in Australia. The first criminal case would have appeared equally bizarre to those in Britain. A convict was found guilty of stealing another convict’s bread, which was worth two pence. At the time, such a case would not have come to court, since convicts were not allowed to own anything. Australia was not Britain, and its law would not be just British. And Australia would soon diverge from Britain in criminal and civil law as well as in a host of economic and political institutions.
    The penal colony of New South Wales initially consisted of the convicts and their guards, mostly soldiers. There were few “free settlers” in Australia until the 1820s, and the transportation of convicts, though it stopped in New South Wales in 1840, continued until 1868 in Western Australia. Convicts had to perform “compulsory work,” essentially just another name for forced labor, and the guards intended to make money out of it. Initially the convicts had no pay. They were given only food in return for the labor they performed. The guards kept what they produced. But this system, like the ones with which the Virginia Company experimented in Jamestown, did not work very well, because convicts did not have the incentives to work hard or do good work. They were lashed or banished to Norfolk Island, just thirteen square miles of territory situated more than one thousand miles east of Australia in the Pacific Ocean. But since neither banishing nor lashing worked, the alternative was to give them incentives. This was not a natural idea to the soldiers and guards. Convicts were convicts, and they were not supposed to sell their labor or own property. But in Australia there was nobody else to do the work. There were of course Aboriginals, possibly as many as one million at the time of the founding of New South Wales. But they were spread out over a vast continent, and their density in New South Wales was insufficient for the creation of an economy based on their exploitation. There was no Latin American option in Australia.