Financial History Issue 114 (Summer 2015) | Page 21

Courtesy of the Center for Western Studies

culturally and politically more like the
Midwest than the West. Its denizens tend
to be somewhat more liberal than those
of West River, who are truly remote from
major population centers and all but local
governmental authority and, hence, often
more conservative in outlook.
Both sides of the Missouri River have
climates that turn frigid in winter, but the
climate west of the river — especially in
the Black Hills and Badlands — is much
more volatile and unpredictable than the
climate to the east. Temperatures can
reach the 70s in January in the west, in
the same year and place where blizzards
strike in May and September. Droughts
are also much more common west of the
river. In fact, the Dakota Territory was
split north and south, instead of east and
west, because it was thought that West
River could not survive on its own. Its
more extraction-based economy (cattle,
gold and now oil) has indeed proven more
highly volatile than that East River.
That the Dakota Territory was split
into two instead of remaining united was
partly a function of partisan calculation.
Republicans believed they would dominate the politics of both states and wanted
to add four US Senators instead of just
two. As a practical matter, it was difficult
to travel between the southern and northern parts of the territory because most of
the railroads ran east and west. Today, the
two states are connected to each other primarily via i-29, which is so far East River
that it is almost in Minnesota. No direct
commercial flights link the two states.
For all their differences, the first four
Dakotas (North, South, East and West)
are twins compared to the stark contrast
between the final two Dakotas, Euroamerican and Native. Six of the poorest seven
counties in the United States are located
in North and South Dakota, and five of
those are in the latter. Those counties are
associated with Indian Reservations where
unemployment rates can exceed 75%. It is
easy for Euroamericans to dismiss these
vast discrepancies. Racists and ethnocentrists blame Indians’ genes or culture.
Conservatives see laziness, while liberals
see victims of 19th century land grabs and
massacres. The real problem is that Indians live under a very different set of rules
that rob them of their economic freedom.
Native Americans suffered many injustices in the past to be sure, but so have
many other groups that have rebounded

Rush Brown of the Brown Drug Company drives his Fawick Flyer. Brown’s company
was a major wholesaler of drug supplies, and Thomas Fawick was the creator of
the Flyer, the first four door automobile made in the United States.

and thrived (Asians, Catholics, Irish,
Jews and Mormons, to name a few of
the better-known examples). Indians, by
contrast, continue to face an autocratic
government in Washington that does
not respect their property rights and that
forces substandard education and healthcare on them. Tribal lands were seized in
the 18th and 19th centuries, but what hurt
living individuals was the good Missouri
bottom lands flooded by the Pick-Sloan
dam projects after World War II.
Allotment and other land policies
forced on Indian tribes created problems
in the 19th century that not only persist to this day but have grown more
virulent. One 
— 
called checker boarding 
— 
left tribes without jurisdiction
over plots within their own reservations.
Another — called fractionation — means
that most private real estate in the hands
of Indians is owned by scores, hundreds or
even thousands of individuals, a situation
that effectively renders the land inert and
incapable of improvement, much like land
in the less developed countries described
by Hernando de Soto in his 2000 book,
The Mystery of Capital.
The Sixth Dakota is not bereft of entrepreneurship; far from it. One problem is
that much of it fails or founders because
it is too far away from major markets.
Such was the fate of South Dakota’s
Indian casinos, which also came under

competition from Euroamerican entrepreneurs in Deadwood and numerous
electronic casinos. A bigger problem is
that native entrepreneurship typically
remains nano-sized — for example, a sole
proprietor with occasional help from family or friends — because Indian entrepreneurs find it difficult to obtain financing,
customers, help with legal and tax paperwork, or all three.
Latent Native American entrepreneurship could be unleashed by fairly obvious
policy reforms that would basically respect
Indians’ lives, property and liberty (economic freedom). Bringing equal economic
freedom to all Americans would increase
good forms of entrepreneurship, the kinds
that create jobs and increase efficiency,
decrease the social costs associated with
crime and poverty and bring more balance
to income and wealth distributions. 
Robert E. Wright is the Nef Family Chair
of Political Economy at Augustana College,
SD, where he has taught courses in business, economics, government and history
since 2009. He is the co-author or co-editor
of more than 20 books, including most
recently Genealogy of American Finance
(2015), Corporation Nation (2014), Guide
to US Economic Policy (2014) and Little
Business on the Prairie (2015), from which
this article is adapted.

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