Chapter 4

The Economic Foundations of Colonial Life

The following material is designed to help you sort out the major themes and important information in our textbook Benjamin Keen, A History of Latin America, 5^th ed. (Boston: Houghton Mifflin Company, 1996). You will be quizzed over this material in class. Also use this information as a study guide to prepare for the exam.

Learning Objectives

After you have read and studied Chapter 4, you should be able to:

1. Explain the importance of Spain's Indian policy for the colonial economy and the conflicts between the crown, the clergy, and the colonists over that policy.
2. Explain why the struggle over Indian policy assumed the dramatic outward form of a clash of ideas.
3. Trace the evolution of colonial labor systems from encomienda and slavery, to repartimiento or mita, to theoretically free labor (debt servitude).
4. Explain the transition from encomienda to the hacienda and mining as the bases of Spanish economic activity.
5. Discuss whether the colonial economy was capitalist or feudal.
6. Discuss the main features of the Spanish commercial system in terms of structural weaknesses and the resulting problems of smuggling and piracy.

Chapter Summary

The chapter opens by noting the decisive importance of Spain's Indian policy for the colonial economy and the disputes the policy generated in Spain and America. The evolution of colonial labor systems is then traced, followed by a description of the major economic activities--agriculture, mining, and industry. The question of the essential nature of the colonial economy, whether capitalist or feudal, is briefly discussed. The chapter closes with a description of the closed Spanish commercial system. The weaknesses of the system are addressed, including threats posed by foreign smuggling and piracy and Spain's claim of exclusive dominion over the New World.

Identification Terms

Be sure that you are able to identify and explain the historical significance of each of each of these terms from this chapter.

Copyright © Houghton Mifflin Company. All rights reserved. This material is presented as a study guide exclusively for the use of students in Latin American History at Illinois State University. Please direct any questions to Marc Becker at mbecker@ilstu.edu.