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.

How, then, to heal the anti-capitalistic cancer of the colonies? … Let the Government put upon the virgin soil an artificial price, independent of the law of supply and demand, a price that compels the immigrant to work a long time for wages before he can earn enough money to buy land, and turn himself into an independent peasant. The fund resulting from the sale of land at a price relatively prohibitory for the wage-workers, this fund of money extorted from the wages of labor by violation of the sacred law of supply and demand, the Government is to employ, on the other hand, in proportion as it grows; to import have-nothings from Europe into the colonies, and thus keep the wage-labor market full for the capitalists…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 independent 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 latter may be able to exploit more laborers; then he must place, at his own expense, a locum tenens [placeholder] on the labor-market, whom the Government forwards across the sea for the benefit of his old master, the capitalist.

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, &c., in brief, the most rapid centralization of capital. The great republic has, therefore, ceased to be the promised land for emigrant laborers. Capitalistic 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 Job’s news of a “glut of the Australia labor-market,” and the prostitution in some places flourishes as wantonly as in the London Heymarket.

The secret discovered in the new world by the Political Economy of the old world, and proclaimed on the housetops is: 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.

Karl Marx, Capital, Chapter 33: The Modern Theory of Colonisation.