for the mutiny. His ways had not changed, and he
immediately challenged the rum monopolists. This would
lead to another mutiny, this time by the monopolists, led by
a former soldier, John Macarthur. The events, which came
to be known as the Rum Rebellion, again led to Bligh’s
being overpowered by rebels, this time on land rather than
aboard the Bounty . Macarthur had Bligh locked up. The
British authorities subsequently sent more soldiers to deal
with the rebellion. Macarthur was arrested and shipped
back to Britain. But he was soon released, and he returned
to Australia to play a major role in both the politics and
economics of the colony.
The roots of the Rum Rebellion were economic. The
strategy of giving the convicts incentives was making a lot
of money for men such as Macarthur, who arrived in
Australia as a soldier in the second group of ships that
landed in 1790. In 1796 he resigned from the army to
concentrate on business. By that time he already had his
first sheep, and realized that there was a lot of money to be
made in sheep farming and wool export. Inland from
Sydney were the Blue Mountains, which were finally
crossed in 1813, revealing vast expanses of open
grassland on the other side. It was sheep heaven.
Macarthur was soon the richest man in Australia, and he
and his fellow sheep magnates became known as the
Squatters, since the land on which they grazed their sheep
was not theirs. It was owned by the British government. But
at first this was a small detail. The Squatters were the elite
of Australia, or, more appropriately, the Squattocracy.
Even with a squattocracy, New South Wales did not look
anything like the absolutist regimes of Eastern Europe or of
the South American colonies. There were no serfs as in
Austria-Hungary and Russia, and no large indigenous
populations to exploit as in Mexico and Peru. Instead, New
South Wales was like Jamestown, Virginia, in many ways:
the elite ultimately found it in their interest to create
economic institutions that were significantly more inclusive
than those in Austria-Hungary, Russia, Mexico, and Peru.
Convicts were the only labor force, and the only way to
incentivize them was to pay them wages for the work they
were doing.
Convicts were soon allowed to become entrepreneurs