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TLDR;

• John Sutter: conman or hero of American Capitalism?

• How “Gold Fever” can give us clues for what’s to come

• What failure to adapt fast enough looks like and what we can learn from it

The California Gold Rush forever changed the trajectory of the budding United States. It set a precedent that has influenced American capitalism and culture to this day. It all started with one very ambitious Swiss-German named John Sutter, who, ironically enough, wasn’t even an American citizen. His story, and that of the Native people he exploited, will prove a potent allegory for navigating the coming AI “Gold Rush.”

The Gift of Gab Goes a Long Way

In the 1840s, John Sutter was an American superstar. My 3rd-great-grandfather, Johan Heinrich Lienhard, who actually came to be Sutter’s most trusted overseer, recounted his feelings just prior to meeting Sutter when he arrived at Sutter’s Fort in Sacramento, the place that would soon become the catalyst for the international phenomenon known as “Gold Fever”:

Sutter had come to America lured by the appeal of the uncharted new world (and to escape an arrest warrant and angry creditors back home in Switzerland… but that’s a story for another day). He was an early westbound pioneer who went to Oregon, up to then Russian-owned Sitka Alaska, then Honolulu where he convinced a dozen or so locals to follow him, and his insatiable appetite for adventure, to Sacramento in the Mexican state of “Alta California”.

Once in California, he eventually met the Governor, Juan Alvarado. This proved to be a prosperous meeting for Sutter because Alvarado, eager to develop the untamed land under his stewardship, saw an opportunity in the charismatic European.

It should be noted that perhaps the most powerful tool in John Sutter’s proverbial toolkit was his ability to tell stories which often embellished liberally upon the truth. Of this particular skillset Great Grandpa Lienhard wrote:

This “favorable impression” must have been the one that Alvarado was left with because He granted Sutter a huge portion of land around Sacramento and even made him a Mexican Citizen. The only things Alvarado asked for in return were that Sutter develop the land, control the native people residing on it and discourage encroachment from Americans, all of which he did with the zeal for which he was known (except for that last one… he never had any intention of turning away Americans).

Gold Fever

Sutter’s fort was officially established in 1841. Over the next 8 years Sutter amassed large stocks of supplies and cattle, planted tens of thousands of acres of crops and managed to mobilize the native people to complete much of that work. As noted previously, his reputation throughout the nation was that of a folk hero and enterprising trail blazer, even before the gold rush. Then in 1848 a carpenter named James Marshall who Sutter had hired to work on the now famous Sutter’s Mill, found gold in a nearby creek. Despite trying to keep it a secret, word leaked and spread quickly. Once it did, it triggered one of the largest mass migrations in history.

People from China, Europe, the eastern United States, Mexico and elsewhere flocked to California in unprecedented numbers; proving that the prospect of getting rich quick was as appealing then as it is now. People left their loved ones, their employment and their way of life for the adventure and potentially outsized risk-reward payouts that had captured their imaginations. The Gold Rush lasted from 1848 to 1855. It supercharged the construction of California in ways that people likely would not have been able to fathom in 1847. Tales of this innovation have inspired and emboldened the American entrepreneurial spirit for more than 170 years. But it has come at a cost; one that is likely to need repayment if we don’t learn its cause.

The Cost

John Sutter himself, after initially profiting from the new influx of hopeful prospectors, who paid top dollar for land, cattle, lodging, food etc, eventually found that in the wild wild west, land, newly wrenched from the hands of of Mexico (you’ll recall that the land granted to Sutter was granted by Mexican politicians), was difficult to keep claim to. His fort and acreage were overrun with prospectors and he, being one more likely to spin his words than keep them, eventually made enemies. Enemies against whom he spent much of the rest of his life litigating in order to keep hold of his once blossoming empire. In the end he lost his land, his fortune and his mojo; having to live off a pension of $250/month from the U.S. government and dying in Washington D.C. nowhere near the famed fort that held his name.

But before you feel too badly for him, remember that most people who abandoned their lives to risk it all for quick riches out west, left empty-handed; either from drinking and gambling away their earnings, getting robbed or being killed by jealous fellow prospectors.

But perhaps most sad of all were the native people who, prior to the arrival of John Sutter and the Gold Rush numbered between an estimated 150,000–300,000 in “Upper California” but by the turn of the 20th century were down to just 30,000.

Causes of death ranged from diseases they did not possess the immune system to defend against, state-sponsored bounties and/or prejudicial violence. Initially, their curiosity about the sudden inflow of white and Mexican newcomers must have been exciting. Sutter himself first gained their trust by leaving bags of glass beads, blankets and other supplies near their camps where they were sure to find them. Eventually, their fear subsiding, they began to come to him for more goods in exchange for labor. Sutter largely used this Indian labor to build up his Nueva Helvetia (New Switzerland).

In researching this topic you will find the word “Slavery” used a lot. That doesn’t seem quite accurate. American treatment of natives in this instance was more like manipulation of people who likely felt overwhelmed by the volume, velocity and scale at which these newcomers were turning their reality on its head. In situations like this it is understandable to feel compelled to take opportunities offered to you without carefully considering the costs.

Breathing Freely

One such example of a cost natives paid, comes from Great Grandpa Lienhard who was “given” several Indian boys by Sutter to help him in his labors.

On Sunday’s, his native companions were free to do as they pleased. However, one Monday morning only 2 of the 3 returned. They showed signs of having been assaulted. The youngest was missing. After inquiring of them, they explained that the youngest had been taken and when the older boys tried to intervene, they were beaten. They knew where he was and took Lienhard there. This is his retelling of what happened next:

That is the end of the account. I doubt the boy breathed as freely at that moment.

What became of that poor little boy?

Did he ever see his family again?

The possible answers terrify me.

Yet I am certain that his story is not unique.

Modern Parallels

Often I hear people talk of “A Singularity Moment” when referring to AI. This is the concept that at a certain time in the future we will reach a point where it is literally impossible to predict what happens next, being that we have no analogous historical periods to inform any plausible future predictions. I think what the native people in California experienced during those ~7 gold rush years (1848–1855) can inform such a future-state prediction.

Imagine it. San Francisco sprung up so fast that prospectors who left it reportedly said that they could scarcely recognize it just months later. Imagine this transition from the perspective of native peoples. You expect your life will continue as it always has, yeah there are a few of these foreigners that have sprouted up but they give you beads and food and don’t seem that much of a threat. And besides, you have never seen the marvelous technology they bring. This might feel equal parts exciting and unnerving. Then your people are sick, your children and your land taken along with your dignity. Suddenly the inflow of these people accelerates to an alarming cadence and with that acceleration comes cities, modern structures, modern inventions. Your world becomes unrecognizable. You don’t speak their language or know their culture. You don’t have the context necessary to thrive in this environment. How do you adapt fast enough? The answer? You don’t. Your population and way of life are decimated because your past couldn’t possibly prepare you to ride this wave into the future.

Now ask yourself: which do you think Sam Altman or Mark Zuckerberg are more interested in? Ensuring that no one is drowned by the AI wave? or Winning? I know where I’d put my money.

We must be proactive in thinking through the ethics of AI, in thinking through novel jobs that could be created to combat unemployment, in thinking through how AI will affect human purpose.

And we must do so quickly or, like the native people of 19th century California, we risk becoming collateral.

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