Golden Rules (book review)

GG has finished reading Mark Kanazawa’a Golden Rules: The Origins of California Water Law in the Gold Rush. It is not light reading (reader should beware that this is part of the University of Chicago’s “Markets and Government in Economic History” series).  In a sense, this book seeks to explain through economic theory how water law (and, to a lesser degree, mining law) evolved as the Gold Rush progressed. In some places this provides real insight, and in others it felt like forcing a straitjacket onto history, but the evidence presented is quite interesting.

Basically there are three main datasets mined here: descriptions of mining activity in the Alta Californian, mining camp rules, and California legal cases. As an economic historian, Kanazawa is clearly hoping for some quantitative data to sink his teeth into, and so the intent is to see trends over the whole of the goldfields.  As such, he is hoping that the record in the Alta Californian and in the available mining camp codes are not biased by the newspaper’s editorial slant or the fragmented record of the early mining camps.

With these in hand and the writer’s interest in economic history, the text generally explores a number of particular cases that suggest general trends, substantiates these with an overview summary analysis of the evidence, and then interprets this in terms of economic theory. For the general reader, the economic arguments can seem to wander into unfamiliar terminology rather too quickly, but the remainder of the book is very accessible. Given that the water rights that emerged from California have come to dominate the West, this is an important work if you want to understand resource law in the West.

There are two main foci here: one is the development of prior appropriation as applied to water, and the other is investigation of the law of nuisance.  The first is far and away the most critical and absorbs most of the book, and unlike some others, he assumes that water law really first developed in the mining camps before the judicial system was running.  Basically the author finds that in wet diggings water rights were essentially riparian, but that as dry diggings came to dominate, prior appropriation started to emerge.  Kanazawa links the evolution of water rights to changes in mining codes governing how claims were made, whether they could be bought or sold, etc. Thus the book starts (after a rather tough chapter on economic theory) with mining codes before shifting towards water.

The shift to prior appropriation is first examined within the mining codes but becomes clearer once the legal cases are brought forward. Here Kanazawa explores how judges charged with both honoring mining codes and common law came to frame water law; his explanation in the end is then couched in terms of optimal economic results. It isn’t really clear that this is what actually was what was guiding miners and judges at the time; it might be that the author seeks logic where none was present. For instance, Kanazawa makes the case that economic theory predicts that the sizes of mineral claims should have declined as more miners poured into an area, and while he shares a few snippets of stories suggesting that happened, he follows this with the summary analysis of the studied mining codes that shows mining claims actually got larger with time.  This revelation is then followed by what reads as a series of excuses for the failure to support the economic deduction with quantitative observation.  Somewhat similarly, as he explores the logic underpinning the evolution of how courts treated damages associated with failures of waterworks (mainly dams), he basically finds that both alternative concepts (application of priority in rights and ability to anticipate and thus avoid damage) point in the same direction; whether either economic outcome was central to a legal decision is unclear. In these cases, the economic analysis adds little to the general reader’s understanding of how laws evolved.  However, in the more general question of how prior appropriation emerged, the economic analysis seems to (ahem) hold water better.

To GG, the surprise was just how early the transition toward prior appropriation and water diversion seemed to start.  A disappointment was that the author (like most gold rush historians) was ignorant of the geology.  “Dry diggings” could refer to modern day placer gravels where water was intermittent or absent or to the paleoplacers of the Auriferous Gravels.  (Indeed, it could even refer to some shallow lode gold deposits). The big paleoplacers were in the north while the dry modern watercourses tended to be in the south.  Failing to distinguish between these probably colors the interpretation of the north vs. south differences the author has identified in mining codes and practice. It is a bit surprising that the big step forward in hydraulic mining largely postdates the timeframe covered in the book; apparently water law was sufficiently defined at that point that no real changes occurred as the larger, more industrial mining concerns emerged that were to tear apart the Sierra landscape in the 1870s and 1880s.

[As a side note, GG rather cavalierly dealt with the evolution of prior appropriation in The Mountains that Remade America, basically citing one early legal decision.  This was rather too simplistic, as this book makes clear, though the basic point–that prior appropriation was a creation of the paleoplacer (“dry diggings”) mines–is well established in Golden Rules.]

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