The Colonial Economy

Colombia Table of Contents

The Spanish system encompassing the audiencia was extractive and exploitative, relying heavily on cheap native labor. Domestic industry was constrained during the colonial period because the audiencia was bound to Spain as part of a mercantile system. Under this arrangement, the colony functioned as the source of primary materials and the consumer of manufactured goods, a trade pattern that tended to enrich the metropolitan power at the expense of the colony.

Because Spaniards came to the New World in search of quick riches in the form of precious metals and jewels, mining for these items became the pillar of the economy for much of the colonial period. Indeed, the extraction of precious metals--such as gold and copper--in the American colonies formed the basis of the crown's economy.

Spain monopolized trade with the colonies. The crown limited authorization for intercontinental trade to Veracruz (in presentday Mexico), Nombre de Dios (in present-day Panama), and Cartagena. Direct trade with other colonies was prohibited; as a result, items from one colony had to be sent to Spain for reshipment to another colony. The crown also established the routes of transport and the number of ships allowed to trade in the colonies. Merchants involved in intercontinental trade had to be Spanish nationals. Finally, the crown circumscribed the type of merchandise that could be traded. The colony could export to Spain only precious metals, gold in particular, and some agricultural products. In return, Spain exported to the colonies most of the agricultural and manufactured goods that the colonies needed for survival. Domestic products supplemented these items only to a minor degree.

Agriculture, which was limited in the 1500s to providing subsistence for colonial settlements and immediate consumption for workers in the mines, became a dynamic enterprise in the 1600s and replaced mining as the core of the Colombian economy by the 1700s. By the end of the 1700s, sugar and tobacco had become important export commodities. The growth in agriculture resulted in part from the increasing exhaustion of mineral and metal resources in the seventeenth century, which caused the crown to reorient its economic policy to stimulate the agricultural sector.

As commercial agriculture became the foundation of the Colombian economy, two dominant forms of agricultural landholdings emerged--the encomienda and the hacienda. These landholdings were distinguishable by the manner in which the landholders obtained labor. The encomienda was a grant of the right to receive the tribute of Indians within a certain boundary. In contrast, the hacienda functioned through a contract arrangement involving the owner--the hacendado--and Indian laborers. Under a typical arrangement, Indians tilled the land a specified number of days per week or per year in exchange for small plots of land.

The encomendero, or recipient of the encomienda, extended privileges to de facto control of the land designated in his grant. In effect, the encomendero was a deputy charged by the crown with responsibility for the support of the Indians and their moral and religious welfare. Assuming that the land and its inhabitants were entirely at its disposal, the monarchy envisioned the encomiendas as a means of administering humane and constructive policies of the government of Spain and protecting the welfare of the Indians. The encomenderos, however, sought to employ the Indians for their own purposes and to maintain their land as hereditary property to be held in perpetuity. Most encomenderos were private adventurers rather than agents of the empire. The remoteness of the encomiendas from the center of government made it possible for the encomenderos to do as they pleased.

Under the influence of church figures such as Bartolomé de las Casas, the crown promulgated the New Laws in 1542 for the administration of the Spanish Empire in America. Designed to remove the abuses connected with encomiendas and to improve the general treatment of Indians, the laws called for strict enforcement of the existing regulations and freedom for the enslaved Indians, who were placed in the category of free subjects of the crown. They further provided that encomiendas would be forfeited if the Indians concerned were mistreated; that the tribute paid by Indians being instructed in religion should be fixed and in no case required in the form of personal service; and that public officials, congregations, hospitals, and monasteries could not hold encomiendas. Additional provisions-- especially resented by the encomenderos--prohibited the employment of Indians in the mines, prevented encomenderos from requiring Indians to carry heavy loads, forbade the granting of any future encomiendas, ordered a reduction in size of existing encomiendas, and terminated the rights of wives and children to inherit encomiendas.

Encomenderos opposed the royal government's attempts to enforce these regulations. A formula was adopted according to which the laws would be "obeyed but not executed." The encomenderos also had the opportunity to send representatives to Spain to seek modifications of the laws-- modifications that the crown eventually granted. The tensions between the royal authority and the colonists in the new empire were never entirely removed.

The institution of the hacienda with its associated mita (ancient tribute) system of labor began in the late sixteenth century. After 1590 the crown started to grant titles of landownership to colonists who paid the crown for the land and reserved the right to use Indian labor on their haciendas. Under an agrarian reform in 1592, the crown established resguardos, or reservations, for the Indians to provide for their subsistence; the resulting concentration of Indians freed up land to be sold to hacendados. The purchase of land as private real estate from the crown led to the development of latifundios.

The new hacendados soon came into conflict with the encomenderos because of the ability of the latter to monopolize Indian labor. The Spanish authorities instituted the mita to resolve this conflict. After 1595 the crown obliged resguardo Indians to contract themselves to neighboring hacendados for a maximum of fifteen days per year. The mitayos (Indians contracted to work) also were contracted for labor as miners in Antioquia, as navigational aides on the Río Magdalena, and as industrial workers in a few rare cases. Although the mitayos were considered free because they were paid a nominal salary, the landowners and other employers overworked them to such an extent that many became seriously ill or died.

Because the mitayos could not survive their working conditions, the crown sought an alternate source of cheap labor through the African slave trade. The crown sold licenses to individuals allowing them to import slaves, primarily through the port at Cartagena. Although the crown initially restricted licenses to Spanish merchants, it eventually opened up the slave trade to foreigners as demand outstripped supply. The mining industry was the first to rely on black slaves, who by the seventeenth century had replaced mitayos in the mines. The mining industry continued to depend on slave labor into the eighteenth century. Despite the decline of the mining industry, slavery remained the key form of labor; from the second half of the seventeenth century through the eighteenth century, plantation-style agriculture rose in prominence and raised the demand for slave labor on sugar plantations and ranches. Minor segments of the economy also supported slavery and used slaves as artisans, domestic servants, and navigational aides.

Slaves had no legal rights in the colonial system. The crown enacted laws to separate the slaves from the Indians so that the two groups would not join against the Spanish and criollo ruling classes. Slaves, however, often revolted against their subhuman living conditions, and many escaped to form palenques (towns) high in the mountains where they could maintain their African customs. These palenques separated themselves from colonial society and thus were among the first towns in Spanish America to be free of Spanish authority. The palenque movement was strongest in the eighteenth century. At this time, there was a crisis in the institution of slavery as it existed in the Spanish colonies. By the end of the 1700s, the high price of slaves along with increasing antislavery sentiment in the colony caused many to view the system as anachronistic; nonetheless, it was not abolished until after independence was achieved.

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Source: U.S. Library of Congress