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Colección: INTERAMER
Número: 59
Año: 1999
Autor: José Luis Romero
Título: Latin America: Its Cities and Ideas

Old and New Economies

Important changes took place in economic life during the eighteenth century, but none of them affected the systems of production. Almost nothing changed in rural and mining areas, apart from the vicissitudes of prosperity and decline in some regions. Those who owned property or mines worked them as they had in days gone by, heedless of the laws governing Indian and black labor. When the system of the encomienda was abolished, Indian labor continued to be functional servitude; black slaves worked on few new plantations that were then established, like those of cacao in Venezuela and of sugar in Cuba. Both the plantations and the mines were better organized to some extent, simply because their routine had acquired a drill-like precision. And the cities felt the influence of the regulatory controls that trade and marketing had imposed. Different factors helped increase production for the urban market: first, the growth of cities and their increasing need for consumer goods, and also the introduction of new farming techniques. In ranching areas, the natural growth of herds increased the wealth of their owners. In mining areas, new veins appeared or old veins petered out, altering thus, for better or for worse, the economy of the region.

Rural economy was hard hit by the wars of Independence and the struggles through which the new political order was created. Land and mines changed hands many times over but were all hurt by the social upheaval. War and revolution pulled the rural population into the mainstream but also disrupted traditional patterns of production, sometimes with serious consequences. The Boves episode in Venezuela or those that later on occurred in the plains, like the Argentine Pampas, had a profound effect on agrarian life.

But it was the development of mercantilism that most profoundly altered the economic order. Domestic markets grew, markedly so in the cities. And so grew the expectation of an increase in imported goods which, in turn, should have been matched by an increase in exports. But all that potential development was at odds with the monopolistic system that the mother countries enforced. Outside the colonial world the increase in trade was very much in evidence. But in the colonies, the only visible signs of such increase were the goods that could be smuggled in. In fact, smuggling became a means not only for importing but for exporting goods as well. And all the opportunities that smuggling allowed to glimpse at sharpened the desire of the colonies to tear down the wall of restrictions imposed on them by the monopolistic system.

That desire was keenest in the port cities and in the capitals. Urban populations were growing, but economic opportunities were not, or at least, not at the same pace. When the mother countries, influenced by new economic ideas, decided to liberalize the trading system, its expansion was remarkable, and the changes it brought about gave way to new and bolder prospects. In the final decades of the eighteenth century, both Portugal and Spain began adopting different measures to undo the restrictions that were thwarting the development of trade; in the early nineteenth century, business and trade groups in the colonies were already planning to expand their prospects even further by establishing direct relations with English trading centers. In the Hispanic world, that project became reality only after Independence; in Brazil, it began to take concrete shape after John VI arrived on the scene in 1808 and the ports were opened. In the principal trading centers, the Spaniards and Portuguese businessmen who had remained in the New World and the criollos who had gained prominence were joined by foreign businessmen who established themselves as trade agents with their respective countries. Little by little, imports and exports began to move through their hands; and they were the ones who introduced new trade flows.

Thus, a strong mercantile power consolidated itself in the cities of Latin America. Sectors associated with brokerage—trade and finance—became increasingly influential and their members tried to get also involved in production so that they could pull all the strings in the economic process. From then on, the mercantile bourgeoisie stressed even more its condition as a hybrid group, half-urban, half-rural. But it was from the cities—ports and capitals—that the new economic network was managed and controlled.