Nature's Evil

Under the Peace Treaty of Utrecht, Spain was forced to open its American ports to British trade. There was no demand for English wool products in the tropics, but the South Sea Company delivered many thousands of African slaves to the Spanish plantations in exchange for silver and sugar. In this way, the company exchanged services for raw materials – a mission worthy of the empire. In 1718 a new war began, and Spain confiscated many English assets in the Southern Atlantic. The shares of the South Sea Company reached a peak in 1720 (in one year they rose tenfold) and then collapsed. Defoe also lost his fortune and spent time in a debtor’s prison. His most successful projects were his novels.

Moll Flanders

was full of scenes of vice and retribution. Moll crosses the Atlantic, going back and forth between tobacco plantations in the colonies and sex work in the mother country. Repenting of incest, bigamy and other sins, Moll thanks the hand of Providence: sentenced to hard labour, she flees to America, where she buys a plantation. Apparently, a benevolent Providence was a speciality of the colonies.

The South Sea Company was one of the first stock market bubbles; many other ‘projects’ would follow. The old money of the Don Quixotes flew into the new pockets of the Robinson Crusoes. Robert Walpole became first lord of the Treasury, Harley was put in prison, and Defoe began working for Walpole. The new government’s strategy was to withdraw from colonial escapades; Walpole focused on local industry, and primarily on the processing of wool. Implementing the teachings of mercantilism, he banned the building of metal-making factories and big ships in America. The Navigation Acts controlled commerce on the seas: colonial commodities and British goods could be transported only on British ships. The sole task of the colonies was to produce raw materials and deliver them to England.

Darien

In the meantime, England had annexed its nearest and arguably most important colony – Scotland. As an undercover agent, Defoe had contributed to preparing the Union of 1707. He saw in Scotland a brave but poor nation – freedom and industry were all that she needed. However, Scotland had just as much freedom as England; what Scotland lacked was colonies. Everyone knew the role that sugar, tobacco and other commodities played in English prosperity. The Scots must create their own colonial project. Looking at the map, Defoe’s colleague Paterson chose the isthmus of Darien. Connecting South and North America, this is the place where the Panama Canal is now located. If a trading colony, New Caledonia, were to be established there, an overland porterage would provide a short cut between England and India, or Scotland and China. Paterson told stories about the gold that the indigenous people in Darien wore. Stocks of fish and game were untouched, the natives were friendly, the Spanish were far away, and the British fleet would provide armed support. In fact, Paterson had read about Darien in a book written by a former pirate. He had promised to marry the daughter of a local chief, and his maps turned out to be as unreliable as his marriage proposal.

Paterson formed the Darien Company, and the Scottish Parliament supported the project. The whole country bought its shares; it is estimated that a fifth of all the money then in circulation in Scotland was invested in the company. But the planned expedition rang alarm bells in London: the porterage in Darien would be in competition with the East India Company’s ships. In 1698 a fleet of five ships prepared to set sail to Darien. Led by Paterson, they were loaded with industrial goods – cauldrons, crockery, weapons – which would be exchanged for gold, spices and other treasures of the East. Paterson had reasons to fear a confrontation with the English Navy, and his ships cast off from Kirkcaldy, a harbour north of Edinburgh. For some reason this port and the neighbouring county of Fife became the cradle of economics. The economist and ‘projector’ John Law had been born in Fife a quarter of a century earlier. A quarter of a century later, Adam Smith would be born in Kirkcaldy.