The Gold Rush established a pattern that would recur in later high-tech enterprises in California. For starters, the high-tech mining economy led to the concentration of capital. As mines grew in scale and complexity, outside speculators, mostly in San Francisco, New York, and London, stepped in with the money — and stepped away with the profits. An observer in 1871 remarked, “Mining is no longer generally prosecuted by those having a will to work, but is conducted by the few having capital to invest.” Thus Karl Marx himself declared, “California is very important for me because nowhere else has the upheaval most shamelessly caused by capitalist centralization taken place with such speed.”
And much of the concentration of wealth was enabled by the beneficence of the federal government. The federal government tolerated (if not encouraged) the privatization of public resources by allowing mining on public lands with no leases or royalties. It also supported the new knowledge economy through institutions. The federal Morrill Act of 1862 granted vast tracts of land (much of it appropriated from Indigenous peoples) to individual states to create universities. California got 150,000 acres, most of which it gradually sold off in ensuing decades to fund an endowment for the University of California created in 1868 — which would soon become an important source of mining engineers. The land grants amounted to a giant federal subsidy of higher education in California. In 1886 a third of UC’s operating expenses came from the land-grant endowment.
The Gold Rush also introduced California’s tech industry to lawyers. In 1862 a visitor to San José, at the time “a neat and pleasant agricultural city, with … a brisk business activity,” commented, “One thing may impress us unfavorably here, viz.: the large number of members of the legal profession (thirty-seven, we believe) in so small a city.” A visitor 150 years later might make the same observation, though with a bigger number. Like today’s Silicon Valley lawyers, many Gold Rush era lawyers specialized in property rights. In this case, that meant not intellectual but rather real property — namely, the long-running lawsuits over who owned underground deposits in the nearby mines that supplied most of the mercury to the gold country.
Another Gold Rush theme: the role of immigrants bearing technical expertise. Prospectors flocked to California from around the world: Europe, Russia, India, Australia, Mexico, Chile, Peru. A visitor to San Francisco in February 1849 “found the place crowded with miners” and commented, “A more motley crowd, or one composed of such divers[sic] nationalities was, perhaps, never before collected in one place.” Newly minted place names in the Sierra foothills reflected the mélange: Italian Gulch, Kanaka Bar, Spanish Diggings, Norwegian Mine, and Chinee Camp.