The Frontier Way


Last week we published the story of William Knox D’Arcy. He had more good fortune than a man deserves. But sometimes you make your own luck. And you can’t get lucky if you’re not trying. He tried twice in his life, taking a punt on highly risky, highly improbable ventures. It paid off for him in spectacular fashion. It’s a great story.

Australia must have been full of men and women like D’Arcy at an earlier point in its history. You don’t settle a continent and build a country from scratch by being afraid of work, risk, or uncertainty. Yet today, we get the sense – and this is true in America as well – that our ancestors would hardly recognise the tepid, fearful, and coddled people we’ve become today.

True, they might admire us for our expensive eyewear and cosmopolitan sophistication, but they probably wouldn’t want to homestead with us, or go in as partners in a gold mine. That takes fortitude, a sense of adventure and a willingness to back yourself.

Maybe the world was just perceived differently then. Frontier people are required to believe they can control their own destiny and improve their own lives. If you didn’t believe that deep down as a matter of personal character, you’d never be out on the edge, at the margins of life trying something different to finish life better than you started.

It’s not an American quality or an Australian quality. It’s a human quality that you see when people are out there on the frontier, not just thinking about the future but making it. For some reason, we live in an age where people are more fearful than positive, or maybe where people are just too lazy, complacent, and well off to take a real risk. Why bother?

But it’s a good thing D’Arcy didn’t think that way. And for what it’s worth, we reckon the status quo in the markets can’t prevail forever. True, there is no theoretical limit to a central bank’s ability to grow its balance sheet (and suppress bond yields while supporting stock prices). But even human credulity has a breaking point. Tomorrow, we’ll show you why people stop believing, and what happens when they do.


Dan Denning
for The Daily Reckoning Australia

From the Archives…

William Knox D’Arcy: The Greatest Australian You’ve Never Heard Of
30-11-2012 – Callum Newman

Credit and Credibility
29-11-2012 – Greg Canavan

Nothing More than Feelings… For the Aussie Dollar
28-11-2012 – Dan Denning

The Thanksgiving Gift from the Feds
27-11-2012 – Bill Bonner

The Aussie Dollar Dilemma
16-11-2012 – Dan Denning

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.


  1. After having to help clean up his s***t at Mt Morgan, being a minanarchist it’s not often I would call on govt regulation (This would actually be a first) but being made responsible for cleaning up the mess you leave behind and being held responsible for destruction of vast tracts of property (not his own) would be my call for government to step in. The cost to clean up Mt Morgan properly exceeds 4 times the value of the gold he extracted, I think the figures I saw were in the range of 60-200billion depending on how far the cleanup was to go. So in this instance I would consider him worse then a central banker, he mined for the present and pi**ed all over future generations for his own ends.

    If this is someone you admire great, but telling everyone how great he is without mentioning how much mess he left behind for others to clean up is just plain biased.

  2. Good for Luke for pointing the romantic illusion of Australia’s sanitised
    history. Perhaps one day someone will write a history book titled:
    “Australia — The Ugly Truths”. Perhaps the Daily Reckoners could devote
    an article on who really did the hard, dirty work to achieve economic progress in Australia since 1788. Was it the Brits? I don’t think so.

  3. For those who are interested this is Mt Morgan

    You can literally see where the creek dies just below the southeast tailings dam. There is no life in this creek for 20km. At 20km it is single cell organisms and fungus/molds. At 35km there is some plant life and at 50km the first fish are found. You have no idea how proud the team was when they found their first guppie 50km down stream. Before that it had been 75km.

    This is the water treatment plant processing about 3megalitres a day into the creek to reduce toxicity as well as stop the hole in the ground from overflowing. It costs about 4-6mil a year to run. Without this the mine (you see it as a lake now) would quickly fill up with devestating downstream effects

    Keep in mind this place has not been mined in any serious way since the 70’s and the last minor mining (reprocessing tailings) was in the 90’s.

  4. Well Michael, you can’t deny the Brits had the vision to colonise and later settle this country, and together with people from a few nations, later to become many, has made Australia what it is today. Except of course if it hadn’t been for America refusing to accept any more convicts, and England needing somewhere to offload its flotsam and jetsam. But this is what makes nations, a melting pot of what is humanity, good and bad. It is what follows that is most important, the calibre of the politicians, the fairness of the authorities and the separation of the Judiciary from State influence which leads to the question., who judges the judge?.

    December 4, 2012
  5. Here is the way you take on those in your way on the frontier. The contemporary frontier way …

    More risk for them than for us.

  6. Crumbs Luke!

    It is true we have shown almost complete contempt for our natural heritage on this continent. The norm is to scrape away what is there and make a living or a living space out of some system alien to the landscape. In general our natural systems, flora and fauna is still poorly understood and appreciated…and managed despite an increase in attention. I work in that realm every week. That is not to ignore some very devoted people with passion. The sought who write books, devoted naturalists and great men like Harry Butler who have brought their passion into the midst of those who would exploit the earth. Leaders must have passion. For so many people too it is true the bush is out of sight and out of mind. That is difficult but not impossible to help.
    As for what people could do and why, there is so much inappropriate allocation of labour and resources that preserving more of our natural systems will not bring us to economic ruin. I am sure. There are many people with land who could lock up and enjoy areas for nature refuges. Our government can only do so much in any event… and I know they are buying land up. And one could do it because nature, when we relax, watch and contemplate is a profound miracle which makes us far richer…given a wee little chance.
    We could make all sorts of changes to our land and destroy vast numbers more species and likely the world would not end. But why would we want to throw such treasures in the waste pile?

    btw..Heavy stuff Ross! At least they didn’t just nuke em. Tried that in Japan I guess.

  7. I understand too that insincere interests can and do hijack honest human endeavours like that to appreciate and preserve the natural environment. One could use that as an excuse to remain in denial over our treatment of our natural heritage and I have seen this. The truth is in there amongst the tangle however.

  8. Interesting commentary about Mt Morgan, D’Arcy, etc. However, all of it is latter day stuff, and does nothing to reflect the times. For a start, New Holland(Australia), was populated by an admixture of desperate people who simply wanted out of Britain – or alternatively, were exiled from Britain.

    Say from the days of our first settlement: In Britain at the end of the 18th century it was not just crime that was increasing but also poverty. The industrial revolution made many people rich but for many poor families (both in rural and urban areas) life was the worst it had been for a long time, consequently Britain was becoming overcrowded with desperate people with too few resources to support them.(All 16m of them) Indeed, the term ‘superabundant’ population was commonly used by administrators at the Colonial Office, who had the task of ridding Britain of its dross.

    Consequently, the people who landed on these shores were not the timid type… This was frontier country, and the Colonial Office in London knew it. Thus their vanguard – (It was engineered, if you like)

    During William Knox D’Arcy’s stay, the total population of Australia would have been no more than two and a half million – “2.5m people”. Land was still the great bargaining chip the government had – indeed, their principal chip, since there was an abundance of it. Indeed, a superabundance, and if it could create economic interest on the London Stock Exchange – ala gold, then great things were happening for Oz.

    Blainey, in his truly landmark scripture of the 1960’s – “The Rush That Never Ended” explains that Australia never saw much of a population hike until gold was discovered in the 1850’s – from then on the “rush” commenced. Population at that time amounted to less than half a million people… at least according to our own ABS in Canberra

    So – on balance, what’s the point of taking an armchair view of how the digging at Mt Morgan could have(should have) proceeded, when vastly higher priorities were the social norm, and land was merely a vehicle to get the country on the road to greater prosperity

    Generations on, and with the luxury of hindsight, yes we can sit in judgement of the garbage dump Mt Morgan became – However, say even 50 years from now, the same will apply with present day activities. For instance, Australia has basic resources(water, etc) to sustain about 15m people, yet we are now up to 22m or so. Good arable land is being flattened for housing and roads, cities, etc – and vast tracts of it are being sold off to foreign governments looking to their own future – yet our social norms reckon this is a good thing(at least for the moment). Added to this, Australia’s mineral assets have been well and truly Colonised by others(we own about 15% of the total activity here).

    Nonetheless looking to the future, tomorrows children might take the view we were grossly irresponsible – since it is they who will have to pay the bill – Much like us having to foot D’Arcy’s real costs.

    Australia has suffered badly from inept management for way too long, perhaps best explained by another author of great merit: – In 1964 Donald Horne wrote a best selling book called “The Lucky Country”…(a title abused for decades)

    What Donald Horne really said, was …..

    “Australia is a Lucky Country, run by second rate people, who share in its luck” …circa 1964

    Given that he spoke of both his and prior generations – since then nothing has really changed, save for the fact a few people are starting to wise up to the Neanderthals still running the show in Canberra.


    Luke .. please do keep up the good work on the anarchist theme .. however, make the leap into the 21st century stuff – The real time issues – of which there are plenty.

    PS* An open cheque book from the British government and Burmah Oil aside, here’s the key to D’Arcy’s success in Persia

    Negotiations with the Mozaffar al-Din Shah Qajar began in 1901 and with the offer of £20,000 for a sixty year concession to explore for oil was secured in May covering 480,000 square miles (1,200,000 km2). The concession stipulated that William D’Arcy would have the oil rights to the entire country except for five provinces in Northern Iran. In exchange the Iranian government was given 16% of the oil company’s annual profits, an agreement that would haunt the Iranians up until the late 20th century.

    Bottom line is – the discovery of, and the oil industry in the Persian Gulf was funded by Mt Morgan gold


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