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THE PATENT MEDICINE INDUSTRY EMERGED not long after America officially decided that in this new country, ignorant dupes were on their own. The end of the War of 1812 meant the British naval blockade of U.S. ports would also end, meaning in turn that southern tobacco could start shipping again, and the price would thus skyrocket. The Saturday morning in 1815 that news of peace reached New Orleans, a guy who heard it early made a deal to buy fifty tons of tobacco from a man who didn’t yet know the blockade was ending. The seller, feeling cheated afterward, sued the buyer, but in one of its most important early opinions, the U.S. Supreme Court unanimously decided the plaintiff had no recourse: sorry, sucker, in this free market, buyer and seller beware. Telling less than the whole truth—hustling—had received a blanket indemnity. In commerce as in the rest of life, when it came to truth and falsehood, America was a free-fire zone.
“History doesn’t repeat itself,” Mark Twain allegedly said, “but it does rhyme.” In the main features of that story from 1815 New Orleans—greed, caveat emptor, the South, tobacco—the rhyme I hear is with 1600s Virginia, that misguided first generation betting their lives on a false promise of gold, finally forced to face reality and become tobacco growers. After that, tobacco became the main cash crop all over the South, and over time that original dream of gold-free-for-the-plucking mostly faded away.
Except finally, two centuries later, the gold fantasy started coming true, first in North Carolina in the early 1800s, after a boy stumbled across a seventeen-pound chunk (which his father sold for a thousandth of its value), then in 1829 in Georgia. Prospectors rushed in. But they were small, essentially regional rehearsals for the Gold Rush, the one that started in California in 1848.
Why was one rush among the most transformative events of the century, and the others tiny historical footnotes?
By 1848, Americans’ appetite for the amazing and the incredible had been whetted by two decades of transformative technologies and by the manic fabulism of dime museums and medicine shows and newly sensationalist newspapers. A credulity about E-Z self-improvement—swallowing pills or feeling the Holy Spirit to end one’s suffering magically—had been normalized during the First Great Delirium.
At the beginning of 1848, twelve thousand white Americans lived in Oregon, and maybe a thousand in the adjacent Mexican state of Alta California. Then came a piece of preternaturally fortunate timing, luck heaped upon luck: on a Monday morning in January an American building a sawmill in Alta California found a piece of gold in the mill creek, and on the following Wednesday, the treaty ending the Mexican War was signed, instantly making California and all its gold American. The original New World fantasy was validated: El Dorado had appeared.
History doesn’t repeat, but it rhymes. Excitable people abandoning settled lives and civilization to travel thousands of miles west to a wilderness utopia? And a wilderness that was truly garden-like, a western Eden occupied by a few exceptionally docile natives? And gold for the plucking? The rush to California in the 1800s was unmistakably a mythic replay of America’s invention, providential adventure redux. As in the early 1600s, the route was freshly charted, and pioneering expeditions had just undertaken the first journeys west, this time in wagon trains.
For a thousand days, life in the California gold fields was topsy-turvy, an enchanted alternate reality. Without any title to land or expensive machinery, you really could find gold in the gravel of streambeds, sitting in the dirt, knotted in tree roots. Just an ounce, a bit smaller than a penny, was worth the equivalent of a good weekly wage back east, and in the early days it wasn’t unusual for one man to find several pounds of gold a week. It was the dreamiest possible version of the American Dream: absolutely anybody really could get rich overnight; their background and social station were irrelevant; there were no bosses, merely notional government and laws; the countryside and climate were magnificent. For the first ten thousand Americans who happened to be close to California or quick enough to get there right away, life in the foothills of the Sierras was as much like a fairy tale as anything anywhere before or since.
At the beginning of 1849, a year after the discovery, The New York Herald reckoned the prospect of free and easy gold in California had “set the public mind almost on the highway to insanity.” Over the next several years, as many as 5 percent of America’s young men rushed west to look for gold, maybe 100,000 in 1849, perhaps another 200,000 in 1850. For the whole half-century or so from the founding of the United States through 1847, total national gold production had been thirty-seven tons. During the decade after gold was discovered in California an average of seventy-six tons per year were mined there.
For Americans, I believe, the Gold Rush was an inflection point, permanently changing the way we thought about impossible dreams and luck and the shape of reality. Maybe there would be an eternal heavenly reward, but life right here could become a fabulous romance, reality as marvelous as any tall tale. Personal reinvention was not just theoretically possible but suddenly happening wholesale. Soft Boston clerks and daydreaming Pennsylvania farmhands were lighting out for the territories and turning themselves into colorful Wild West characters. Bonanza and pay dirt entered the language.
These giddy new habits of mind became central to the ethos of the West, of course, but the Gold Rush also triggered a shift in the psychology of Americans at large. Gold in California resurrected the distinctly un-Puritan ambition of the first Virginia settlers—the individual and piratical freedom to grab for instant wealth, with little or no adult supervision. Where our founding seventeenth-century mindsets overlapped—the Massachusetts religious diehards and the get-rich-quick Virginians—was in their common determination to believe the unbelievable, live enchanted lives, be characters in their own adventure stories, make their fantasies real. The Gold Rush was all that, no waiting required. Something like magic could suddenly sweep aside common sense. Miracles actually happened in America.
This dream-come-true celebration of individualism was brief. The floodtide of luck in northern California receded. An average miner’s take in 1849 was a third of what it had been in 1848 and continued shrinking. In the end, the unlucky outnumbered the superlucky by ten or a hundred to one. Just four years after gold was discovered, total output peaked and mining was industrialized, requiring capital, deeds, bosses, entrepreneurs.
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THE JOB CATEGORY of entrepreneur, not-necessarily-rich men with access to capital who enlisted other men to create a business out of nothing, came into being at the same time as America, itself a business conjured out of nothing. The organizers of the Virginia Companies, which funded the first colonies in the 1600s, were early entrepreneurs. But when the word entered English in the 1800s, entrepreneur was a synonym for showman or impresario, a creator and promoter of spectacles. Right around the time Tocqueville arrived and the Gold Rush happened, its meaning expanded to encompass people starting every sort of business. “I know of no country where the love of money has taken stronger hold on the affections of men,” Tocqueville observed. “Love of money is either the chief or secondary motive in everything Americans do.”
Individual anybodies with good ideas and grit and luck could imagine and then create new businesses and industries. The entrepreneurial instinct has served America well. But as with the three hundred thousand California gold-seekers in 1849–50 who followed the fortunate ten thousand in 1848, as with the American habit of wishfulness in general, a confirmation bias kicks in: from Ben Franklin to Mark Zuckerberg, the stories of the supremely successful entrepreneurs obscure the forgotten millions of losers and nincompoops. The fabulous successes seem like proof of the power of passionate belief in oneself, our American faith in faith.
Entrepreneurs exist on a smoke-and-mirrors spectrum, from small-time fabulists to legitimately world-changing visionaries. But part of every entrepreneur’s job is to persuade and recruit others to believe in a dream, and often those dreams are pure fantasies. A defining feature of America from the start, according to McDougall’s Freedom Just Around the Corner, was the unprecedented leeway and success of its hucksters—“self-promoters, scofflaws, occasional frauds, and peripatetic self-reinventors,” as well as “builders, doers, go-getters, dreamers.” He writes that “Americans are, among other things, prone to be hustlers,” which “is simply to acknowledge Americans have enjoyed more opportunity to pursue their ambitions, by foul means or fair, than any other people in history.” For a large pool of hustlers to be successful, of course, requires a large population of easy believers.
The California Gold Rush accelerated the westward migration of dreamy Americans. Many people had solid reasons to go west. But once there was an industry based on moving Americans west—the transcontinental railroads—a large and continuous stream of travelers and settlers was required to sustain those new entrepreneurial businesses. Which meant that the railroads and their allies needed to sell the settlers fantasies, as the original New World speculators had done to prospective Americans back in the 1600s. Occasional new discoveries of gold and silver could pull the most excitable, but the main lure was land, cheap or even free, and not just to tediously farm. All over the empty West, the promoters promised, land could make you rich. An 1874 guidebook called New Homes: Or, Where to Settle reported, for instance, that land in central Nebraska—the middle of nowhere then, the middle of nowhere still—had increased in value a dozen-fold in the previous dozen years. My first Nebraska ancestors arrived from rural Tennessee and Missouri in the 1860s and ’70s, and bought land. They did not get rich.
A generation later more of my ancestors arrived in Nebraska from Denmark, right before the Panic of 1893. That financial panic, which triggered a huge economic depression, was caused in part by the unsustainable overbuilding of the western railroads and the popping of that railroad bubble. Which had been inflated by the western real estate bubble. Which happened even though just twenty years before, the Panic of 1873 had been caused by the popping of a previous railroad bubble. Americans, predisposed to believe in bonanzas and their own special luckiness, were not really learning the hard lessons of economic booms and busts.
You know the story of the ant and the grasshopper? The ant is disciplined, the grasshopper parties as if the good times will last forever—but then winter descends; the ant was correct. Americans were always energetic grasshoppers as well as energetic ants, a sui generis crossbreed, which is why we have been so successful as a nation. Our moxie always came in the two basic types. We possessed the unexciting virtues embodied by the Puritans and their secular descendants like Ben Franklin: steady hard work, frugality, sobriety, and common sense. And then there’s our wilder, faster, and looser side, that packet of attributes that also makes us American: impatient, overexcited gamblers with a weakness for stories too good to be true. Ant mode consistently tempered grasshopper mode.
A propensity to dream impossible dreams is like other powerful tendencies, okay when kept in check by common sense, at least in the aggregate and over the long run. For most of its history, America had exactly such a dynamic equilibrium between fantasists and realists, mania and moderation, credulity and skepticism. But as much as we wish for a natural and inevitable balance between those competing forces, like the laws in physics, there’s no such mechanism governing civilizations. Societies and cultures can lurch out of balance. As ours eventually would do.