British Travelers to the Mines of Rio de la Plata and Chile in the Aftermath of the Financial Crisis of 1825–26: Political Economy and Questions of Observation

Abstract

Abstract This article focuses on work published by British travelers to Chile and Rio de la Plata who inspected mining association holdings in the region in the wake of the financial crisis of 1825–26. The travelers sought to determine whether it proved prudent to continue to direct British men, money, know-how, and equipment to the mines. They drew on the work of political economists to help establish the credibility of their observations and accounts, particularly with respect to the relationship between the lack of the division of labor and population in La Plata and Chile and prospects for future speculative investments in the mines. However, while political economists blamed the financial crisis on the uncertainty generated by the actions of the Bank of England and private banks, the commercial travelers focused on other sources of observational and representational error: principal-agent problems in the joint-stock mining associations, and the travelers' ignorance and prejudices about the region.