Effects of Gold Rush to Australian Economic Development - Essay Example

Running Header: Effects of Gold Rush to Development in Australian Economy Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Effects of Gold Rush to Australian Economic Development Introduction Australian economic development has been affected by the gold rush of the 1850. As much as many economies including Britain and America were affected by during the gold rush period, Australia was significantly affected due to many factors including the discovery of rich gold deposits in some parts of the country. Gold is a precious resource whose presence in a given economy meant a lot to that economy. In Australia, the Gold rush experience attracted many people from all over the world into Australia and this was when there was a new economic dispensation in the country due to the high influx of people who arrived in the country to have a share of the gold when the gold deposits were discovered. Australian gold rush of the 1850 led many people to move into the country. Statistically, it was estimated that the population in Australia in the period (1851-1861) trebled due to the gold rush pressures that were evident. It was estimated that in 1852 alone, an excess of 370,000 migrants moved to Australia. The influx of people in the country changed the nature of the Australian economy. The people originated from different parts of the world, with different race and religious orientation. This affected the economy in that the economy was identified for its multiculturalism. This all began in the gold rush period and it led to today’s multicultural Australian economy. The economy was also said to progress due to the increased number of diggers who moved into the country and spent their money in exploration of gold. This led the people at the time to begin to realize profits, as well as the production was further boosted. How the Gold Rushes of the 1850 affect Australian Economic Development The gold rush period came with many effects that affected Australia. However, one of the most significant effects of the gold rush was with regard to the development of the Australian economy. The coming of the gold rush period was accompanied by economic development in Australia due to increased trade in gold and the increased influx of people who moved into the country. At this time, a lot of money was also poured into the country for the purposes of mining gold from the new gold deposits that were identified at the time. The money that moved into the economy had to circulate among the people in the gold mining industry, and the flow of money spread to other sectors of the economy, and this ultimately caused the economy to be more vibrant than the case was before. The circulation of money among the people in Australia, the immigrants who had moved into the country and other investors led to increased investments in the various sectors of Australian economy. Increased investment broadened the areas of service and production in Australian economy. This led to increased number of economic activities, liquidity of money and investment into key areas of the economy thus economic development. Australia’s economic development owes much of its successes from the ‘gold rush’ period (Jeremy 44). This is because at this period more people and stakeholders of the economy took an active role in the economy, and also there was a lot of money that was channeled into the economy for the same purpose (Guillet 44). Some parts of the Australian region were more affected economically due to the discovery of gold in such places. For instance, Victoria at the time was estimated to contribute in excess of a third of gold output produced by the whole world in the 1850s.This clearly indicates that the gold output that came from the Australian economy was on the increasing scale, and thus the economy received increased revenue from the gold that was exported. Increased revenue that was raised was invested into other areas of the Australian economy and has been the basis for economic development in Australia. Gold has a high value exchange rate, and thus Australia during the gold rush period having produced in excess of a third of the global gold output means that the economy received good revenue from the exports that were raised. The Australian government invested significant amounts of this revenue from the trade in gold into various sectors of the economy, and the economy developed, and has further developed since then (Austràlian Commonwealth Bureau of Census and Statistics 54). The gold rush period particularly in the 1850s was characterized by unique development in the economy due to increased returns that came from the country’s trade in gold. Victoria was said to have contributed at the time about a third of the gold output that the world had produced. This was a large percentage and it came with significant positive impacts to the Australian economy with regard to economic growth and development. At the time, it was said that the gold field towns in Australia became the centers of investment. More people flocked into these towns and they actively invested in them thus the economy grew. In addition to the investments brought about the expansion of the market for the local products both locally and internationally. The gold rush period also brought about new industries being set up in Australia and this meant that more people had employment in these industries. Increased employment brought about increased consumption and thus the demand for consumption led to the increase in demand from producers (Marlene 39). This stimulated economic growth due to the increased production that was brought about as a result of these measures. Essentially, the Australian economy developed due to the increased investments that came as a result of more people finding employment in the industries that were necessitated by the gold rush period. This period significantly led to increased production and consumption, and thus the economy was stimulated to expand. There was an increase in the liquidity of money as industries were set up and more people were involved in employment in the city. The progress in economic growth and development in this period played a big role in raising the economic standards of the middle class people in Australia. The middle class people being many in numbers implied that a huge number of Australians were positively affected by the gold rush (National Library of Australia 54). As much as many people across the world hold the belief that Gold rush mainly affected California and Klondike, The Gold rush that took place in Australia has remained to hold the record of being the world’s richest. Gold was discovered in Australia from the early eighties. Actually, records have it that the isolated gold was discovered in 1820s in the New South Wales, about thirty years prior to the gold rush era in the colonies of the Britons in Australia. “At the time of the discovery of Australian gold; Word spread quickly and within a few days 100 diggers were frantically tunneling for instant wealth”. This statement by one of the key miners at the time carries a lot about what happened at the time of the gold rush after gold deposits were discovered at various locations in Australia. In this period many people came to Australia to make their fortune out of the gold deposits that were discovered. This was a turning point for the Australian economy bearing the fact that most of the people who came into the country came to make money, and this boosted economic growth. In fact big cities such as Sydney and its streets were chocked with men from various walks of life who came with mining equipments. It is said that in 1850, there were over 2000 people digging gold in Bathrust, while thousands of people were still on the way coming for the purposes of mining gold. The many people who came to mine and trade in gold led to the growth and development in the Australian economy (Ting 43). This is because of the changes that took place in the Australian market such as inflation of prices caused by the increase in demand for gold, and its related products at the time. Any given economy that grows and develops requires the input of people who raise and invest their resources in that given place (McQueen 42). This is because it is people who run production processes, and they are the ones who control the flow of goods and services in the economy. Given the high number of people who entered into the country so as to invest in mining gold, then demand for other products in the economy also rose and this led to an increase in economic transactions, which led to economic growth that opened room for increased investments. The resultant investment led to economic development (Shannon 30). To emphasize on the effect of the gold rush with regard to economic development in the Australian market; particular examples such as the discovery of gold in New South Wales may be good examples to demonstrate this case. It is said that after gold was discovered in New South Wales, more people were attracted from the different parts of the Australia and neighboring states in their bid to find their fortune in gold. In fact, it is said in this particular case that there was a rush of labor from Victoria, an adjoining state (Maddock 51). This rush of labor meant that many people found employment in Australia, and when more people are employed then it speeds up economic growth and development in the following ways. First, the people who work as labor are able to provide these (labor) very important factors of production that is required for the success of any given investments. Investments flourish when the capital base is matched with labor. Secondly, the increased labor in Australia due to the increased demand for gold from the identified gold deposits in Australia also meant that there was increased settlement of people particularly in the cities that had close proximity from the gold deposits (Jeffery 34). Urbanization picked up in Australia as more people settled to mine and trade in gold. This meant that investment in infrastructure was improved in scope, new economic services were offered in the new cities, and more people found it necessary to invest into the economy. This necessity was combined by their ability to afford the cost of investments from the returns they received from trade in gold. This led to economic development in many Australian cities. Thirdly, the coming of more people into the economy meant that ideas became diversified with time whereby new economic ideas and creativity was flocking into the Australian economy, and this led to economic development through the increased investment of the people (Alaric 40). The British authorities who colonized Australia and Government of Australia also played a big role in the economic development of Australia over time. This is because Australia, which was one of their colonies, was transformed economically. Gold was in abundance and most people stopped what they were doing and focused their energies to the mining of gold. Wealthy alluvial deposits were discovered at Bendigo and Ballarat, and this made Victoria to attract more immigrants who flocked to the state in hundreds of thousands. The Australian gold rush brought in many Australians together and a feeling of the need for independence. This actually transformed Australia from a British colony into a nation. Statistically, people increased in various key towns. For instance, the population in Victoria shot from 80, 000 people to half a million people. The overall population of people in Australia was tripled from about half a million people to 1.7 million people in 1871. Other gold deposits that were later uncovered includes those in Queensland in 1850s, Northern Territory gold deposits were discovered in 1865, whereas in Tasmania gold was discovered in 1877. However Victoria was the center for the gold rush in Australia (David 57). Conclusion In conclusion, gold rush period was accompanied by increased investments due to the people and the funding that the processes of gold mining attracted. More people came to Australia to find their fortune in mining and trade in Gold. Other impacts that came as a result of gold rush were urbanization which promoted economic developments through the increased demand in infrastructure that builds up the economy. The Australian economy greatly benefited with regard to economic developments from the gold rush period, and the investments that were necessitated by the discovery of gold deposits in various places in Australia. References Austràlia. Commonwealth Bureau of Census and Statistics. Official Year Book of the Commonwealth of Australia No. 33 – 1940. Canberra: Aust. Bureau of Statistics, 1998. Print. Bottomley, McQueen. Corporations law in Australia. Sydney: Federation Press, 2002. Andrew, Alaric. Developing Australia's Regions: Theory & Practice. Canberra: UNSW Press, 2003. Than, Ting. Southeast Asian Affairs 2008. New York, NY: Institute of Southeast Asian Studies, 2008. McCausland, Jeffery. The other special relationship: the United States and Australia at the start of the 21st century. New York, NY: Strategic Studies Institute, 2007. Than, Ting. Southeast Asian Affairs 2008. New York, NY: Institute of Southeast Asian Studies, 2008. McCausland, Jeffery. 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After the Gold Rush: Tarnished Dreams in the Sacramento Valley. Canberra: JHU Press, 2009. Read More