Classical economics confuses on principle two very different kinds of private property: one kind of private property depends on the producers' own labor, the other kind of private property depends on the employment of the labor of others. Classical economists forget that the latter not only is the direct antithesis of the former, but absolutely grows on its tomb only. In other words, private property that depends on using other people's labor depends upon the death of private property that depends on the labor of its owner. In Western Europe, the home of classical economics, the process of primitive accumulation is more of less accomplished. Here the capitalist regime has conquered most of the whole domain of national production. Where it has not done so, capitalism has subjugated self-employment and other antiquated modes of production. These antiquated modes still exist in those less developed regions, side by side with capitalism, but in gradual decay. To this ready-made world of capital, the classical economist applies the notions of law and of property inherited from a pre-capitalist world with all the more anxious zeal and all the greater unction, the more loudly the facts cry out in the face of his ideology.
It is otherwise in the colonies. There the capitalist regime everywhere comes into collision with the resistance of the producer, who, as owner of his own conditions of labor, employs that labor to enrich himself, instead of the capitalist. The contradiction of these two diametrically opposed economic systems leads to conflict. Where the capitalist has at his back the power of the mother-country, he tries to clear out of his way by force the modes of production and appropriation based on the independent labor of the producer. The same interest, which compels the sycophant of capital, the classical economist, in the mother-country, to proclaim the theoretical identity of the capitalist mode of production with its contrary, that same interest compels him in the colonies to make a clean breast of it, and to proclaim aloud the antagonism of the two modes of production. To this end, he proves how the development of the social productive power of labor, co-operation, division of labor, use of machinery on a large scale, etc., are impossible without the expropriation of the laborers, and the corresponding transformation of their means of production into capital. In the interest of the so-called national wealth, he seeks artificial means to ensure the poverty of the people. Here his apologetic armor crumbles off, bit by bit, like rotten touchwood. It is the great merit of E.G. Wakefield to have discovered, not anything new about the Colonies , but to have discovered in the Colonies the truth as to the conditions of capitalist production in the mother country. As the system of protection at its origin  attempted to manufacture capitalists artificially in the mother-country, so Wakefield's colonization theory, which England tried for a time to enforce by Acts of Parliament, attempted to effect the manufacture of wage-workers in the Colonies. This he calls "systematic colonization".
First of all, Wakefield discovered that in the Colonies, proper means of subsistence, machines, and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative — the wage-worker, the other man who is compelled to sell himself of his own free-will. He discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things.  Mr. Peel, he moans, took him from England to Swan River, West Australia, means of subsistence and of production to the amount of £50,000. Mr. Peel had the foresight to bring with him, besides, 3,000 persons of the working-class, men, women, and children. Once arrived at his destination, "Mr. Peel was left without a servant to make his bed or fetch him water from the river."  Unhappy Mr. Peel who provided for everything except the export of English modes of production to Swan River!
For the understanding of the following discoveries of Wakefield, two preliminary remarks: We know that the means of production and subsistence, while they remain the property of the immediate producer, are not capital. They become capital only under circumstances in which they serve at the same time as means of exploitation and subjection of the laborer. But this capitalist soul of theirs is so intimately wedded, in the head of the classical economist, to their material substance, that he christens them capital under all circumstances, even when they are its exact opposite. Thus is it with Wakefield. Further: the splitting up of the means of production into the individual property of many self-employed laborers, working on their own account, he calls equal division of capital. The classical economist is like the feudal jurist who called relationships that were purely monetary, and had nothing to do with feudalism, by feudal names.
"If," says Wakefield, "all members of the society are supposed to possess equal portions of capital... no man would have a motive for accumulating more capital than he could use with his own hands. This is to some extent the case in new American settlements, where a passion for owning land prevents the existence of a class of laborers for hire."  So long, therefore, as the laborer can accumulate for himself — and this he can do so long as he has possession of means of production — capitalist accumulation and the capitalist mode of production are impossible. The class of wage-laborers that is necessary in order to have capitalism does not exist under these circumstances. How, then, in old Europe, was the expropriation of the laborer from his conditions of labor, i.e., the co-existence of capital and wage-labor, brought about? In other words, how did capital and wage labor come into existence? It happened by a social contract of a quite original kind. "Mankind have adopted a ... simple contrivance for promoting the accumulation of capital," which, of course, since the time of Adam, floated in their imagination as the sole and final end of their existence: "they have divided themselves into owners of capital and owners of labor.... The division was the result of concert and combination." 
In one word: the mass of mankind expropriated itself in honor of the "accumulation of capital". The workers, recognizing the need to have capitalism, gave up their right to be self-employed. Now, one would think that this instinct of self-denying fanaticism would give itself full fling especially in the colonies, where alone exist the men and conditions that could turn a social contract from a dream to a reality. But why, then, should "systematic colonization" be called in to replace its opposite, spontaneous, unregulated colonization? Here is one reason: "In the northern states of the USA, it may be doubted whether so many as a tenth of the people would, at present, fall under the description of hired laborers.... In England... the laboring class compose the bulk of the people."  So, we see the problem illustrated in the USA, workers do not voluntarily give up the right to self-employment for the glory of capital and the absence of this desire for self-expropriation is so great in the USA that slavery, according to Wakefield himself, is the sole natural basis of colonial wealth. Systematic colonization is a mere improvisation, since the colonists, unfortunately, must work with free men, not with slaves. "The first Spanish settlers in Santo Domingo did not obtain laborers from Spain. But, without laborers, their capital must have perished, or at least, must soon have been diminished to that small amount which each individual could employ with his own hands. This has actually occurred in the last colony founded by England — the Swan River Settlement in Australia — where a great mass of capital, of seeds, implements, and cattle, has perished for want of laborers to use it. At Swan River, no settler has preserved much more capital than he can employ with his own hands." 
We have seen that the expropriation of the mass of the people from the soil forms the basis of the capitalist mode of production. The essence of a free colony, on the contrary, consists in this — that the bulk of the soil is still public property, and every settler on it therefore can turn part of it into his private property and individual means of production, without hindering the later settlers in the same operation. This is the secret both of the prosperity of the colonies and of their inveterate vice — opposition to the establishment of capital. "Where land is very cheap and all men are free, where every one who so pleases can easily obtain a piece of land for himself, not only is labor very dear, as respects the laborer's share of output, but the difficulty is get anyone to work as a wage laborer at any price." 
In the colonies the separation of the laborer from the conditions of labor and their root, the soil, does not exist, or exists only on a very limited scale. The same can be said of the separation of agriculture from industry. The destruction of the household industry of the self-employed peasantry has not been brought about. Where then is to come the internal market for capital? "No part of the population of America is exclusively agricultural, excepting slaves and their employers who combine capital and labor in particular works. Self-employed and self-reliant Americans cultivate the soil and follow many other occupations. Some portion of the furniture and tools which they use is commonly made by themselves. They frequently build their own houses, and carry to market, at whatever distance, the produce of their own industry. They are spinners and weavers. They make soap and candles. And, in many cases, they also make shoes and clothes for their own use. In America, the cultivation of land is often the secondary pursuit of a blacksmith, a miller or a shopkeeper."  With such queer people as these, where is the "field of abstinence" for the capitalists?
The great beauty of capitalist production consists in this — that it not only constantly reproduces the wage-worker as wage-worker, but produces a relative surplus-population of wage-workers. Thus, the law of supply and demand of labor is kept under control, the oscillation of wages is confined within limits satisfactory to capitalist exploitation. Furthermore, the social dependence of the laborer on the capitalist, that indispensable prerequisite of capitalism, is secured. In the mother country, the smug deceitfulness of the classical economist can turn this relationship of absolute dependence into a free contract between buyer and seller, between equally powerless, equally independent owners of commodities, the owner of commodity capital on one side, the owner of the commodity called labor on the other. But in the colonies, this pretty illusion is torn asunder. The absolute population here increases much more quickly than in the mother-country, because many laborers enter this world as ready-made adults, and yet the labor-market is always understocked. The law of supply and demand of labor falls to pieces. On the one hand, the old world constantly throws in capital, thirsting after exploitation and "abstinence"; on the other hand, the regular reproduction of the wage-laborer as wage-laborer comes into collision with impertinent and sometimes invincible impediments. Wage-laborers can turn into self-employed producers, workers who work for themselves instead of for capital, and who enrich themselves instead of enriching the capitalist gentry. The existence of widespread self-employment has a perverse effect on the capitalist labor-market. For one, it causes the degree of exploitation of the wage-laborer to remain indecently low. In this case, the wage-laborer loses his sentiment of dependence on the abstemious capitalist.
Hence the capitalist must suffer all the inconveniences that our E. G. Wakefield pictures so doughtily, so eloquently, so pathetically. The supply of wage-labor, he complains, is neither constant, nor regular, nor sufficient. "The supply of labor is always not only small but uncertain."  "Though the produce divided between the capitalist and the laborer be large, the laborer takes so great a share that he soon becomes a capitalist.... Few, even those whose lives are unusually long, can accumulate great masses of wealth."  The laborers most distinctly decline to allow the capitalist to abstain from the payment of the greater part of their labor. The shortage of wage laborers allows the workers to insist on higher wages. Can the capitalist solve this problem by importing workers from Europe. No. If he is cunning enough to try this, he finds quickly that the abundance of land and resources allows these imported workers to become self-employed, as well. They soon "cease... to be laborers for hire; they... become independent landowners, if not competitors with their former masters in the labor-market."  Think of the horror! The excellent capitalist has imported bodies from Europe, with his own good money, only to find they have become his competitors! The end of the world has come! No wonder Wakefield laments the absence of all dependence and of all sentiment of dependence on the part of the wage-workers in the colonies. On account of the high wages, says his disciple, Merivale, there is in the colonies "the urgent desire for cheaper and more subservient laborers — for a class to whom the capitalist might dictate terms, instead of being dictated to by them.... In ancient civilized countries the laborer, though free, is by a law of nature dependent on capitalists; in colonies this dependence must be created by artificial means." 
What is now, according to Wakefield, the consequence of this unfortunate state of things in the colonies? A "barbarising tendency of dispersion" of producers and national wealth. The parcelling-out of the means of production among innumerable owners, working for themselves, destroys both the centralization of capital and all the foundations of factory-based wage labor. Every long-winded undertaking, extending over several years and demanding an outlay of fixed capital, is prevented from being carried out. In Europe, capital invests without hesitating a moment, for there is always an abundance of unemployed members of the working-class seeking employment. But in the colonies! Wakefield tells an extremely doleful anecdote. He was talking with some capitalists of Canada and the state of New York, where the immigrant wave often becomes stagnant and deposits a sediment of "supernumerary" laborers. "Our capital," says one of the characters in the melodrama, "was ready for many operations which require a considerable period of time for their completion; but we could not begin such operations with labor which, we knew, would soon leave us. If we had been sure of retraining the labor of such emigrants, we should have been glad to have engaged it at once, and for a high price: and we should have engaged it, even though we had been sure it would leave us, provided we had been sure of a fresh supply whenever we might need it." 
After Wakefield has contrasted English capitalist agriculture and its "factory-like" labor with the scattered cultivation of American peasants, trying to show the English system to be superior, he unwittingly gives us a glimpse at the reverse of the medal. He depicts the mass of the American people as well-to-do, self-employed, enterprising, and comparatively cultured, whilst "the English agricultural laborer is miserable wretch, a pauper.... In what country, except North America and some new colonies, do the wages of free labor employed in agriculture much exceed a bare subsistence for the laborer? ... Undoubtedly , farm-horses in England, being a valuable property, are better fed than English peasants."  But, never mind, economic growth is, once again, by its very nature, identical with misery of the people.
How, then, to heal the anti-capitalist cancer of the colonies? If men were willing, at a blow, to turn all the soil from public into private property, they would destroy certainly the root of the evil, but also — the colonies. The trick is how to kill two birds with one stone. Let the Government take control of colonial lands and set an artificially high price for private individuals who want to buy parcels of virgin soil. This price, set independently of the law of supply and demand, would compel the immigrant to work a long time as a wage laborer before he can earn enough money to buy land and turn himself into a self-employed peasant. The money extorted by the government from the wages of laborers, generated by prices that violate the sacred law of supply and demand, will grow in direct proportion to the numbers of individuals who abandon wage labor for self-employment. The money can then be used by the government to import replacement have-nothings from Europe into the colonies, and thus keep the wage-labor market full for the capitalists. Under these circumstances, tout sera pour le mieux dans le meilleur des mondes possibles. This is the great secret of "systematic colonization". By this plan, Wakefield cries in triumph, "the supply of labor mustbe constant and regular, because, first, as no laborer would be able to procure land until he had worked for money, all immigrant laborers, working for a time for wages and in factory-like conditions, would produce capital for the employment of more laborers; secondly, because every laborer who left off working for wages and became a landowner would, by purchasing land, provide a fund for bringing fresh labor to the colony."  The price of the soil imposed by the State must, of course, be a "sufficient price" — i.e., so high "as to prevent the laborers from becoming self-employed landowners until others had followed to take their place."  This "sufficient price for the land" is nothing but a euphemistic circumlocution for the ransom which the laborer pays to the capitalist for leave to retire from the wage-labor market to the land. First, he must create for the capitalist "capital", with which the capitalist may be able to exploit more laborers; then he must place, at his own expense, a locum tenens on the labor-market, whom the Government forwards across the sea for the benefit of his old master, the capitalist.
It is very characteristic that the English Government for years practised this method of "primitive accumulation" prescribed by Mr. Wakefield expressly for the use of the colonies. The fiasco was, of course, as complete as that of Sir Robert Peel's Bank Act. The stream of emigration was only diverted from the English colonies to the United States. Meanwhile, the advance of capitalist production in Europe, accompanied by increasing government pressure, has rendered Wakefield's recipe superfluous. On the one hand, the enormous and ceaseless stream of men, year after year driven upon America, leaves behind a stationary sediment in the east of the United States, the wave of immigration from Europe throwing men on the labor-market there more rapidly than the wave of emigration westwards can wash them away. On the other hand, the American Civil War brought in its train a colossal national debt, and, with it, pressure of taxes, the rise of the vilest financial aristocracy, the squandering of a huge part of the public land on speculative companies for the exploitation of railways, mines, etc., in brief, the most rapid centralization of capital. The great republic has, therefore, ceased to be the promised land for emigrant laborers. Capitalist production advances there with giant strides, even though the lowering of wages and the dependence of the wage-worker are yet far from being brought down to the normal European level. The shameless lavishing of uncultivated colonial land on aristocrats and capitalists by the government, so loudly denounced even by Wakefield, has produced, especially in Australia , in conjunction with the stream of men that the gold-diggings attract, and with the competition that the importation of English-commodities causes even to the smallest artisan, an ample "relative surplus laboring population", so that almost every mail brings the news of a "glut on the Australian labor-market", and the prostitution that, in some places, flourishes as wantonly as in the London Haymarket.
However, we are not concerned here with the conditions
of the colonies. The only thing that interests us is the secret discovered
in the new world by the classical economics of the old world, and proclaimed
on the housetops: that the capitalist mode of production and accumulation,
and therefore capitalist private property, have for their fundamental condition
the annihilation of self-earned private property; in other words, the expropriation
of the laborer.
 Wakefield's few glimpses on the subject of Modern Colonization are fully anticipated by Mirabeau Pere, the physiocrat, and even much earlier by English economists.
 Later, it became a temporary necessity in the international competititve struggle. But, whatever its motive, the consequences remain the same.
 "A negro is a negro. In certain circumstances he becomes a slave. A mule is a machine for spinning cotton. Only under certain circumstances does it become capital. Outside these circumstances, it is no more capital than gold is intrinsically money, or sugar is the price of sugar.... Capital is a social relation of production. It is a historical relation of production." (Karl Marx, "Lohnarbeit und Kapital", N. Rh. Z., No.266, April 7, 1849.)
 E. G. Wakefield: "England and America", vol.ii. p.33.
 l.c., p.17.
 l.c., vol.i, p.18.
 l.c., pp.42, 43, 44.
 l.c., vol.ii, p.5.
 "Land, to be an element of colonization, must not only be waste, but it must be public property, liable to be converted into private property." (l.c., Vol.II, p.125.)
 l.c., Vol.I, p.247.
 l.c., pp.21, 22.
 l.c., Vol.II, p.116.
 l.c., Vol.I, p.131.
 l.c., Vol.II, p.5.
 Merivale, l.c., Vol.II, pp.235-314 passim. Even the mild, Free-trade, vulgar economist, Molinari, says: "Dans les colonies où l'esclavage a été aboli sans que le travail forcé se trouvait remplace par une quantité équivalente de travail libre, on a vu s'opérer la contre-partie du fait qui se réalise tous les jours sous nos yeux. On a vu les simples travailleurs exploiter à leur tour les entrepreneurs d'industrie, exiger d'eux des salaires hors de toute proportion avec la part légitime qui leur revenait dans le produit. Les planteurs, ne pouvant obtenir de leurs sucres un prix suffisant pour couvrir la hausse de salaire, ont été obligés de fournir l'excédant, d'abord sur leurs profits, ensuite sur leurs capitaux mêmes. Une foule de planteurs ont été ruinés de la sorte, d'autres ont fermé leurs ateliers our échapper à une ruine imminente.... Sans doute, il vaut mieux voir périr des accumulations de capitaux que das générations d'hommes [how generous Mr. Molinari!]: mais ne vaudrait-il pas mieux que ni les uns ni les autres périssent? (Molinari, l.c., pp.51,52.) Mr. Molinari, Mr. Molinari! What then becomes of the ten commandments, of Moses and the prophets, of the law of supply and demand, if in Europe the "entrepreneur" can cut down the laborer's legitimate part, and in the West Indies, the laborer can cut down the entrepreneur's? And what, if you please, is this "legitimate part", which on your own showing the capitalist in Europe daily neglects to pay? Over yonder, in the colonies where the laborers are so "simple" as to "exploit" the capitalist, Mr. Molinari feels a strong itching to set the law of supply and demand, that works elsewhere automatically, on the right road by means of the police.
 Wakefield, l.c., Vol.II, p.52.
 l.c., pp.191, 192.
 l.c., Vol.I, p.47, 246.
 "C'est, ajoutez-vous, grâce a l'appropriation du sol et des capitaux que l'homme, qui n'a que ses bras, trouve de l'occupation et se fait un revenu... c'est au contraire, grâce à l'appropriation individuelle du sol qu'il se trouve des hommes n'ayant que leurs bras.... Quand vous mettez un homme dans le vide, vous vous emparez de l'atmosphère. Ainsi faites-vous, quand vous vous emparez du sol.... C'est le mettre dans le vide de richesses, pour ne la laisser vivre qu'à votre volonté."
(Collins, l.c. t.III, pp.268-71, passim.)
 Wakefield, l.c., Vol.II, p.192.
 l.c., p.45.
As soon as Australia became her own law-giver, she passed, of course, laws
favorable to the settlers, but the squandering of the land, already accomplished
by the English Government, stands in the way. "The first and main object
at which new Land Act of 1862 aims is to give increased facilities for
the settlement of the people." ("The Land Law of Victoria", by the Hon.
C. G. Duffy, Minister of Public Lands, Lond., 1862.)