The penal colony of New South Wales initially consisted of the convicts and their guards, mostly soldiers. There were few“ free settlers” in Australia until the 1820s, and the transportation of convicts, though it stopped in New South Wales in 1840, continued until 1868 in Western Australia. Convicts had to perform“ compulsory work,” essentially just another name for forced labor, and the guards intended to make money out of it. Initially the convicts had no pay. They were given only food in return for the labor they performed. The guards kept what they produced. But this system, like the ones with which the Virginia Company experimented in Jamestown, did not work very well, because convicts did not have the incentives to work hard or do good work. They were lashed or banished to Norfolk Island, just thirteen square miles of territory situated more than one thousand miles east of Australia in the Pacific Ocean. But since neither banishing nor lashing worked, the alternative was to give them incentives. This was not a natural idea to the soldiers and guards. Convicts were convicts, and they were not supposed to sell their labor or own property. But in Australia there was nobody else to do the work. There were of course Aboriginals, possibly as many as one million at the time of the founding of New South Wales. But they were spread out over a vast continent, and their density in New South Wales was insufficient for the creation of an economy based on their exploitation. There was no Latin American option in Australia. The guards thus embarked on a path that would ultimately lead to institutions that were even more inclusive than those back in Britain. Convicts were given a set of tasks to do, and if they had extra time, they could work for themselves and sell what they produced.
The guards also benefited from the convicts’ new economic freedoms. Production increased, and the guards set up monopolies to sell goods to the convicts. The most lucrative of these was for rum. New South Wales at this time, just like other British colonies, was run by a governor, appointed by the British government. In 1806 Britain appointed William Bligh, the man who seventeen years previously, in 1789, had been captain of the H. M. S. Bounty, during the famous“ Mutiny on the Bounty.” Bligh was a strict disciplinarian, a trait that was probably largely responsible