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[pp. 85-117]                   FIRST SECTION
                                      CHAPTER TWO
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[The collision, dissolution and fusion of two modes of production]

Latin America: blockages to development                                                   85

        A short digression is necessary at this stage: my concept of "collision of modes of production" refers to the interaction (military or economic, or both) between different social formations as an historical event. The outcome of that collision amounts to the outcome of the interaction of different economic, social, political and ideological instances, resulting -if one social formation does not destroy the other -in a new complex structure (the fabric of the new social formation).
        On the one hand, in any mode of production, each one of the four instances is simultaneously cause and effect within the complex structure, and in their mutual relation (from here derives the notion of "relative autonomy" attached to social, political and ideological instances, because unlike the economic instance, they are not limited by technological aspects). Thus the complex structure reacts over each one of the instances and viceversa. On the other hand, the appropriation of nature being the aim of human beings grouping in societies, the economic instance (as organisation of the labour process) appears as the first cause, but it is not an isolated instance above the entire process (clearly so because all four instances and the complex structure exist only as relations between human beings grouped in societies). Therefore, this economic instance is limited by both the others and the complex structure, and simultaneously the former (economic instance) poses a limit to all of them.
        Therefore, even when production (organisation of the labour process) appears as a basis in the notion of collision of modes of production, this economic determination cannot be absolute but only relative.

Latin America: blockages to development                                                   86

That is, connected to the relative strength of the other instances (because modes of production exist only as components of social formations), at the moment that the historical event occurs. Thus, the outcome of such collision is not reduced to the linear proposition "the same cause produces the same effect" at any place in any time, but to a scope of possibilities within the limits posed by the interactions, instances and complex structure described above - e.g. technological level, dominant ideology, etc.
          Drawing an analogy with the physics of atomic particles, it could be said that in historiography -as in quantum theory which approaches phenomena simultaneously with the notions of wave and particle   mechanics -we are dealing with "probabilities" and not "certainties" .
          Now, I return to my analysis:
  THE COLLISION
           We can say that the collision between the Spanish conquerors and the Amerindian, which lasted more or less from 1492 until the late XVl century, took place under the pressure of a particular mechanism, which was the foundation of colonial exploitation. In turn, this mechanism led to specific forms of labour organisation, and, then   to a unique mode of accumulation which entered into conflict with  the mode of production (appropriation) of surplus-labour.
            The starting point for the conquest was private enterprise as  a tool used by an Iberian Crown which couldn't afford the demands of  such a task. From this point of view, then, it was a private enterprise undertaken by merchant's capital under the political dominion of Absolutist states. This being the case, the mechanisms of colonial

Latin America: blockages to development                                                   87

exploitation had to be those adequate to fit the most urgent needs of the Absolutist state and merchant's capital: to obtain bullion as fast as possible and cash crops within a monopolised market.
        On the other hand, the territories of luso-Spanish settlement were already populated by indians, most of them under conditions of economic and social organisation in which there already was a production of surplus-labour to be collected as a tribute (tax) by the native ruling class (1). So, the main task the conquerors faced was to submit an existing population, to transform it into a supplier of both bullion and products as tribute and labour power to produce added bullion and goods marketable in Western Europe. Therefore,   the first mechanism was to exact tribute in kind and labour from existing socio-economic formations. So, in this stage of collision,  the conquerors did not destroy the native economic and social  structure but, rather, retained it. They replaced the amerindian  ruling class by a spanish ruling class to collect the tribute (gold, silver, agricultural products, clothes, personal service and slaves)   already paid by aztecs, maya and inca direct labourers.
           Therefore, the early labour organisation derived from the basic mechanism of colonial exploitation was a form of structure super- imposed on the native communal organisation, notoriously through the  encomienda, and secondarily through slave labour in mines and  plantaciones -before the utilisation of imported negro slave labour.
            Nevertheless, as the voracity of merchant's capital was growing steadily alongside the financial needs of the Absolutist State, the tribute imposed upon the indian communities was undermining the latter's

Latin America: blockages to development                                                   88

        reproduction. Pushing the indian economy to a situation of further decadence and the indian communities as a source of land to be stolen by the Spaniards. A contemporary witness wrote in 1540:
                "The Spaniards began to exact heavy tributes from them, and  the Indians terrified of the Spaniards ever since the war (of conquest; My note), gave everything they had. As the tributes, however, were  so continuous that they had scarcely paid one when they were obliged  to pay another, they sold their children and their lands to the money lenders in order to meet their obligations; and when they were unable to do so many died because of it, some under torture and some in cruel prisons, for the Spaniards treated them brutally and considered them less than beasts" (2) .
               So, the economic function performed by the encomendero in the sixteenth century -as a grantee of lands but not a propietor and sometimes as future landowner through the "adquisition" of new land - produces, on the one hand, a type of 'absortion' of the native economy through the transformation of indians in landless debtors (3), and on the other hand, an effect of "conservation" of parts of that native economy to isolate it and to save it in order to ensure the flow of foodstuffs and commodities through tribute in kind.
              Both destructive and conservative effects operated within the framework of an export-oriented economy, which eventually would result  in an economic structure with a shrunken domestic market, and the steady presence of an agricultural subsistence economy created by direct labourers, both basic conditions of availability of cost-free labour power. At the same time, the encomenderos became so powerful, that  even the attempt by the Crown to control their power through what

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was called the New Laws of the Crown, in 1542, was unsuccessful. The encomenderos tried to change the temporary grants of Indian labour into a permanent concession of both land and indian labour. The Crown opposed it in order to avoid the formation of a new form of feudal ruling class in its American Colonies. The encomendero class fought for almost one hundred years to obtain that right, but, the Crown thought that "... if the encomenderos were conceded this right, their descendants or other successors, born in the Indies and unacquainted with the mother country, would soon lose all sense of loyalty to the Crown" (4) .
The encomenderos, who enforced the new colonial organisation of labour, revolted against the New Laws of the Crown of 1542, and in Peru there was a civil war which involved the death of the viceroy (the direct representative of the King) (5).So, the system continued, as did its effects of "absortion" and "conservation". The New Laws were issued on 20 November 1542, but "the laws forbidding forced personal service, although they remained on the statute books, were entirely without effect. The indians, whether held in encomienda or not, were in practice held to all sort of exactions. The Spanish magistrate, the parish priest, the native cacique, each came in for his share, and they often worked in collusion. Vagabond spaniards and half-castes wandering about the country 'sponged' on the defenceless natives, demanding food and shelter, or squatted in their villages. Moreover, both in New Spain and in Peru the tendency persisted in the sixteenth and seventeenth centuries -although about this we yet know little- to commute part of all the tribute for labour, especially in the case of very small encomiendas"... "Only in Chile and the provinces of the Rio de la Plata was this legally permissible because of the

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small numbers of indians available for work on the farms and ranches" ..."Even so-called free labour of the natives, for which they were regularly hired and paid wages, was not all free in the sense that they were free to accept or reject it. Very soon after the abolition of indian slavery and of service tributes, the practice appeared of requiring the indians to give a certain amount of their time to work in mines and factories, on farms and ranches and on public works. Corregidores de indios, officials who were in charge of crown indians and collected their tribute, had in the past ofen rented them out to anyone needing labour in order to help raise the tribute or for their own private profit"... "Relays or shifts of labour gangs came to be regularly conscripted to work in turn for a limited period fixed by law. Forced paid labour replaced forced tributary labour" (6). That is, the effect of "absortion" of the native economy through squeezing tribute in labour even in the form of "forced paid labour", became a serious danger to the native economy as a source of tribute in kind - source of consumption goods for the ruling class -, for the increasing lack of manpower in the indigenous communities lowered its production. Nevertheless, the main danger to the source of tribute was not the above, but the growing antagonistic contradiction between the Spaniard's mode of accumulation of surplus-labour and the native mode of production of surplus-labour. The allotment of tribute was now under Spanish control, unlike before the conquest when the native rulers assigned part of it to improve the daily life conditions of the whole society, and even to feed and give shelter to direct labourers submitted to tax in labour and give feed to the communities in case of natural calamities, was now made to cope with the needs of the colonial economy. That is, to create new structures of exploitation unknown to the natives and alien to the indigenous mode of production. The accumulation

Latin America: blockages to development                                                   91

worked to the benefit of the world economy of merchant capital, isolating the native economy from any benefit derived from the former.
         It is possible to summarise these new structures of exploitation in three aspects: agricultural, mining and public works enterprises. Using the tribute exacted from the natives in order to accumulate money capital by means of agricultural, mining and building enterprises the Spanish colonists exerted extra pressure on the native economy incapable of supplying both the necessary materials and labour at the same time. When the direct labourers were under the rule of Aztec, Maya or Inca non-labourers, roads were built linking every community, irrigation works were built for large areas of farmland, state storage of food and goods meant protection for labourers in time of scarcity, and cultivation techniques were shared by all the labourers working in the community.
         Conversely,. under the rule of the Spanish conquerors, roads linking communities were abandoned, because the conqueror's main concern was to build roads linking the capital-city with the sea-ports -roads serving an export-oriented economy. Collective irrigation works disappeared, being replaced by individual - landowner's small systems, suitable to each private property concerned - more often than not leaving indian communities without water supply. State storage of food and goods disappeared. Cultivation techniques were no longer a matter of concern for the ruling class concentrated in export of bullion and cash crops, and having a huge source of labour power they resorted to intensive labour in order to increase production of foodstuffs. Subsequently, the dislocation between the colonial mode of accumulation (private) and the native mode of production (communal), endangered the whole colonial system of production, thereby presenting a serious
dilemma.

Latin America: blockages to development                                                   92

        Moreover, since the indian system of production was in a process of decline at the time the conquerors arrived, the shifting of the emphasis of the economy from agriculture to mining, produced a serious scarcity of indian farmers, with the subsequent scarcity of means of subsistence for the direct labourers. So, the "dislocation" had catastrophic results for the native population, which saw its ranks decimated. There was a dreadful indian mortality rate, directly caused by overwork in encomiendas, mines and public works, and helped by diseases of European origin against which the indian had not developed immunity. For instance, in New Spain alone, the indian population dropped from about 25,000,000 in 1519 to slightly over 1,000,000 in 1605 (7).
        The encomenderos thus saw their economic basis declining steadily during the whole process of their struggle to get more rights to force indian labour and to transform their grants in land into ownership. Not only was the amount of tribute diminishing, but the availability of labour power was also narrowing. These distorted feudal relations of production, the encomiendas, were not able to survive as the basis of a system of production. Their inner antagonistic contradiction between individual accumulation of surplus-labour and communal production was the main cause of their ruin. Unable to force indian population into individual peasant economy in order to form an economic basis liable to serve as a foundation for a western european feudal mode of production, the Spanish colonial economy shifted its course of development to new forms of relations of production, which were the product of both dissolution and fusion of old ones from both feudal and amerindian (asiatic) modes of production.

Latin America: blockages to development                                                   93

        Commerce and not colonisationt was the aim of the first Spanish conquerors who arrived in the Caribbean sea at the end of the xv century. As representatives of a new monarchy becoming absolutist and mercantilistt commerce meant first of all gold and silver.
        " ...the economic policy of the Castilian crown with regard to the colonies was in accord with the prevailing mercantilist ideas of the time" ..."the accumulation of money was conditioned by the prevailing belief that gold and silver alone constituted wealth - the so-called bullionist theory"... "Colonists were esteemed chie£ly because they were potential sources of wealth and security to the mother country. They offered closed markets to Spanish manufacturers and agriculture, and supplied necessities such as cotton, dyes, and hides, or tropical luxuries such as sugar, cacao, and tobacco. But, above all, the American provinces produced immense quantities of precious metals. The crown therefore sought to create for Spain a monopoly of all trade and shipping with the Indies, as well as to engross most of the gold and silver from American mines" (8). Elaborating in the same direction as Harding, Jacques Lambert writes accurately:
         "Being precocious colonizers, the Spaniards and Portuguese applied the mercantilist colonial system. The home countries regarded their colonies merely as a means of accumulating wealth through importation of precious metals and colonial agricultural products and, to a lesser degree, as a market for the industries of the mother country. The entire functioning of the conquered countries was organised to serve the direct needs of the home country, while their own internal development was not even considered. The colonies were restricted to mining and agriculture, and were forbidden to make any manufactures

Latin America: blockages to development                                                   94

that the home country could provide. They were also forbidden to engage in direct trade with foreign countries or among themselves" ... "immigrant conquerors who came to exploit the labor of natives and imported slaves allowed the mercantilist policy to continue for a long time" (9)
        Arawak and Carib Indians, living from hunting and primitive shifting agriculture in tribal classless society in the island of the West Indies, were the first people the conquerors encountered. The conquerors forced the indian to work in mines and placers, looking for gold, and to feed and house them. In a word, the indians were submitted to slavery, but as slaves also having the obligation to provide their own subsistence.
         In the year 1503, the Crown legalized the forced labor of free indians in the West Indies, providing that "each adult indian was to have a house and land which he might not alienate" (10).
        There is no doubt that what the Crown was trying to impose on the tribal indigenous societies of the West Indies was to transform them into independent peasants submitted to paid labour services for the Spanish conquerors.
         But, as the Crown's main interest was gold production, "the governor was ordered to give particular attention to the regulation of native labor in the mines, and in a secret instruction he was directed to place the indian villages as near the mines as possible, so that more gold might be extracted" (11) .
         In a word, the Spanish Absolutist State attempted to settle nomadic hunting tribes in artificial villages, changing the organisation

Latin America: blockages to development                                                   95

of labour of the tribes into individual peasant economy. Of course, such a dramatic turn in the daily life of the indian was bound to fail. And so it did.
        The conquering authorities in the islands interpreted and enforced the royal regulations in a particular way, submitting the indians to tribute in kind and in labour, but without interfering with the indigenous system of production at the level of its organisation. This form of plunder was named encomienda.
             "The encomienda had been a temporary grant by the Crown of jurisdiction and manorial rights over lands conquered from the infidels, made to knights as a reward for services in the Moorish wars. The peasants on these lands presumably were crown tenants, and life rights to their services were given to the encomenderos. As developed in the Indies, the encomienda was the patronage conferred by royal favor over a portion of natives concentrated in settlements near those of the Spaniards"... "So far as we know no grant of land was involved" ... "the recipients of encomiendas were to be conquistadores and meritorious settlers so rewarded for their contribution to the founding of new colonies. It was an attempt to reconcile the Crown's determination to deal kindly with the natives and the need for a stable and continuous labour supply" ... "The practice was legalized by Ferdinand as regent of Castile in 1509" . .."The Indians were assigned in lots of fifty, a hundred, or more, by written deed or patent, to individual Spaniards  to work on their farms and ranches or in the placer mines for gold dust. Sometimes they were given to officials or to parish priests in lieu of part of their annual salary. The effect was simply to parcel out  the natives among the settlers to do with as they pleased" ..."The term of service in the mines at first was six months, later eight  months. But in any case the results were disastrous. Men and women

Latin America: blockages to development                                                   96

were worked beyond their strength, infant mortality was high, the birth rate declined. If the Indians fled to the hills and woods, they were hunted down like fugitive slaves. And the consequence was the rapid disappearance of the aborigines from the American island". (12)
         Such was the first act of genocide committed by merchant's capital in America, in the name of christiandom and western european civilisation. Afterwards, some twenty or thirty million Aztec, Maya, Inca and other South american indians were slaughtered to provide gold and silver for european merchant's capital, along with about 40,000,000 (13) african negroes to supply labour power for the plantations in the West Indies and Brazil (14) in about 350 years.
         The way in which the encomienda operated in the Antilles was described in the early XVl century by the Spanish priest Bartolome de las Casas: "I saw with my own eyes how a royal official who had 300 indians encomendados (assigned as encomienda), murdered two hundred and seventy of them in three months by overworking them" (15). Naturally, the good Spanish priest suggested that the best way to protect the indian was to authorize the use of negro slaves!
          The reason for the collapse of the Carribean encomienda system was primary economic: West Indian tribal classless societies did   not have the capacity to produce sufficient surplus-labour to be appropiated by non-labourers. So, submitted to servitude (as brutal as it was, it was not the main cause of failure), these tribal societies were expropiated of a considerable part of their necessary labour, and collapsed, being decimated.

Latin America: blockages to development                                                   97

        Colonial needs, then, developed a slave system of production in the area, in what was called the plantation. Firstly indigenous slaves, and then negro slaves. Moreover as gold placers became exhausted, merchant's capital developed the production of sugar and tobacco, cash crops as valuable as gold at the time.
        The island which today comprises Haiti and the Dominican Republic was the center of dispersion of sugar cane in the New World. There, the first sugar mill (ingenio) was built up in 1516. In 1523, sugar cane was being cultivated in Cuba and Puerto Rico. With British merchant's capital Jamaica had started cultivation in 1519. In Mexico, it was sown in 1520, in Brazil in 1522, and Peru in 1533 (16). One hundred years later, sugar, coffee, cacao, tobacco, and negro slaves were commodities as valuable as the gold and silver coming out from the New World.
         In the West Indies and northern coastal Brazil the collision with the western european feudal mode of production destroyed the indigenous tribal classless mode of production; the former destroyed the latter, because there was no way to obtain surplus labour, given the latter's level of forces of production and development. So, to produce commodities such as gold, silver, sugar, coffee, tobacco and cacao, merchant's capital had to work out the most suitable system at the  lowest cost. Africa provided slave labor, and merchant's capital provided the rest: sugar cane to be sown, capital, technology, machinery, oxen, and mules.
          The plantation was born as a particular need of merchant's capital   in an area where there was an increasing shortage of labour supply on the spot, and the means of subsistence for the plantation slaves was

Latin America: blockages to development                                                   98

possible to obtain (cheap or cost free) from the encomienda and then hacienda systems of production, alongside a cheap supply of slaves.
        As such the plantation was a specific merchant's capital enterprise in the final stage of the western european feudal mode of production, suitable to the mercantilist colonial system in those areas in which the use of slave labour was cheaper, more profitable, than the use of servile labour.
         These features become crystal clear from a superficial study of plantation economy in the Spanish West Indies and Brazil. In the islands, plantation economy developed in a weak way during the XVI and XVII centuries, and only after the mid-XVlll century did the "sugar period" begin in Cuba. During the period 1521 to 1763, there was negro slave import of 60,000 people to Cuba. In the eighty years after, there was an import of 400,000.
         As Cortes Conde rightly points out, "sugar which was known early in Cuba, did not enjoy the same success that it did in Brazil, precisely because Cuba lacked the conditions -primarily a labour supply - that made its exploitation possible in the Portuguese colony. Whereas Portugal had specialized in navigation along the East African coast, which was extremely close to northeastern Brazil, and therefore was in a position to search for and import slave labor from Africa, the Spanish colonizers lacked that same possibility at the very time when they were confronted with a sudden decline of the Indian population (which furthermore was ill-suited to plantation work). Whereas the association of the Dutch and Portuguese furnished relatively large   sums of capital from the outset of the operation, and also channels

Latin America: blockages to development                                                   99

for commercialising the product in Europe, the same was not the case with the Spanish. And, finally, the Portuguese possessed a special know-how in sugar production which others lacked. Because of these circumstances, despite its suitable land and favourable climate, Cuba did not develop a plantation economy in the earliest colonial period but rather a totally different agrarian organisation of free colonies. Given the relationship of existing resources, abundant lands and scarce population, the prevalent form of agrarian development was extensive cattle raising. The hacienda, therefore, was more the result of the factors of production existing in Cuba at that time than of legal forms" (17) .
         Therefore, even in the "plantation belt of the Antilles" (mainly composed of British, French, Dutch and Portuguese colonies), the Spanish islands developed a basic rural organisation of labour that would eventually have the same fundamental pattern as in the rest of the continent. Nevertheless, this basic rural organisation of labour was not determinant in the social structure of the islands, because the plantation economy and trading activities in La Havana -as a port linking Spanish colonial commerce between the mainland and Europe- evolved as the main economic activities in that particular region.
          Conversely, in the mainland, the collision between spaniards and amerindian took the form of an encounter between two class societies. The Spaniard, feudal, the Amerindian, "asiatic" .As indigenous society was producing in that period adequate surplus-labour to sustain a non-labouring class, the spaniard conquerors were in a position to replace the indian non-labouring class as the ruling class without destroying the native system of production.

Latin America: blockages to development                                                  100

        Yet, the new ruling class -the Spaniards -was alien to the amerindian mode of production based upon communal ownership of land. The new ruling class belonged to a system based upon individual ownership of the land, and upon individual peasant economy. The Amerindian ruling class was composed of the collective body of bureaucrats of the state based upon communal economy, that is, a state being both protector and expropriator, administrator and organiser of the whole productive structure. With the defeat of this ruling class, the indian communities lost their inner articulation as a structured society -the irrigation system was abandoned, the road system wasted, and agricultural techniques were no longer developed - and the mode of accumulation of surplus-labour imposed by the Spaniards led to a mode of distribution in which no part of the indian surplus- labour returned to the indian communities.
         As a result, the indian communities entered into a process of stagnation, which eventually led them to maintain the same level of technology during four hundred years. But, as this stagnation was not in the best interests of the new ruling class -living from tribute
in kind and labour from the communities -the latter had to work out some alternative system of production suitable to the actual situation in the region. The new system was based on two given realities: one, the existence of the communities as unlimited sources of labour power, and, two, the low productivity of these communities resulting in some of its members leaving and looking for alternative sources of subsistence. In this particular period, some features of both feudal and amerindian systems of production dissolved and fused themselves into new fe:atures, this time belonging to a novel specific mode of production, as we shall see in the next two sections of this chapter.

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So, in the mainland, plantation enterprises became a meaningless element in the economy, and the social structure there was determined by the new rural organisation of labour having the hacienda as its unit of production at the basic level (18). On the mainland, slave labour, as compared with servile labour -eventually peonage - was not the best choice for the colonists. Therefore, the plantation system was not to prosper in the mainland. Slave labour was profitable only if the slave owner were an encomendero at the same time. (19) This reality worsened with the building of sugar mills and the multiplication of mining centers, because the price of the slaves increased. Available data shows that the price of a negro slave was twice that of an indian slave. At the same time, indian slaves were cheaper than negro slaves because they were ill-suited to slave work, both in plantations and mines. So, slave labour (the basis of the plantation system) tended to stagnate in the mainland and to be replaced by servile labour through the system called mita -from the Inca form of tribute in labour - and/or wage labour, both in mines and sugar plantations, which increased profits for the encomenderos who were mine-owners at the same time. It was cheaper for them not to buy slaves (even indian slaves) and utilise servile labour or pay wages which were always kept at the most basic level possible.
DISSOLUTION AND FUSION
In accordance with the Marxian theory of modes of production ... "in all cases of conquest, three things are possible. The conquering people subjugates the conquered under its own mode of production (e.g. the English in Ireland in this century, and partly in India); or it leaves the old mode intact and contents itself with a tribute (e.g. Turks and Romans); or a reciprocal interaction takes place

Latin America: blockages to development                                                  102

whereby something new, a synthesis, arises (the Germanic conquests, in part). In all cases, the mode of production, whether that of the conquering people, that of the conquered, or that emerging from the fusion of both, is decisive for the new distribution which arises" (20) .
        There is no doubt that the luso-spaniard conquerors tried to subjugate the native economies, under their own mode of production. But neither individual peasant economy nor private ownership of the land were present in the continent, and the attempt was impossible to put into practice. To merchant's capital, as direct entrepreneur of the colonial adventure, the question of what mode of production to impose was irrelevant. The core of the matter was how to make the quickest and greatest profits. So, at a first stage, the rational step was to leave "the old mode intact and content itself with a tribute". But, classless societies do not have a capacity to produce enough surplus-labour to be expropiated by non-labourers. And this was the case in the West Indies and Brazil. The tribute was impossible to exact, and merchant's capital imposed in these areas isolated mercantilist enterprises based upon slave labour-plantations. The   case of the Indian class societies in the rest of the continent was different. There was a surplus-labour available as a tribute, but both the development of its forces of production and the demand of merchant's capital and the Absolutist State undermined native economy, leading it to ruin.
           Therefore, from the need to keep the colonies producing enough surplus-labour, there emerged a process of dissolution and fusion, a product of "reciprocal interaction" taking place "whereby something new, a synthesis", arose.

Latin America: blockages to development                                                  103

        This "reciprocal interaction" was a process in time which developed into a synthesis during the sixteenth and seventeenth centuries. These two hundred years were a "mining time" in the colonies. For instance, in the second half of the sixteenth century, silver accounted for more than eighty per cent of all Spanish American exports. There is no doubt that during the whole colonial period, mining -as a source of gold and silver - was the decisive element in Latin America from the Iberian Crown's point of view. Alexander von Humboldt's estimate of the value (in Spanish 'pesos') of precious metals mined during the colonial period is impressive:

  PRODUCTION OF PRECIOUS METALS 1492 -1803(21)
                    Region                                          Pesos

New Spain (Mexico)	2,028,000,000
Peru and Upper Peru	2,410,200,000
New Granada (Colombia)	275,000,000
Chile	138,000,000
Portuguese colonies (Brazil)	855,500,000
Total	5,706,700,000

Humboldt's figures indicate the relative importance of the different mining areas involved; and, the picture of a comprehensive colonial system working in every corner to produce gold and silver. Moreover, the overwhelming majority of precious metals production appears to have occurred in the most populated areas (Mexico and Peru), which was only natural since the colonists relied only on native labour.

Latin America: blockages to development                                                  104

        However one cannot exploit mining areas without having the capacity to supply them with food, clothes, animals, hides, timber, and so on. So, the mining centres fostered the growth of agriculture in those areas suitable to it, and eventually whole regions saw the growth of new towns, new cultivated fields, and new routes related only to the existence of the mines. The case of Potosi, in Upper Peru, is typical: Chile and northwestern Argentina developed their agriculture, cattle raising and slave trade to feed, clothe and supply labour power to this huge mining community.
         So, although mining was the main pressure on the export-oriented colonial economy, it fostered the growth of a domestic economy to such an extent that eventually some of those areas became self-generating economies when the mines ended their production: Chile and Cordoba in Argentina are two good cases in point.
          It can thus be concluded that the specific features of most of the colonised areas permitted the appearance and growth of a domestic economy as a supporter of imperial export-oriented production. The most important of these specific features was the availability of huge amounts of labour power, which made it cheaper to develop a domestic economy in America than utilise the Iberian peninsula production to supply its most important concern there: mining. And, as a matter of fact, not only cheaper, but the only possible way to exploit the region, given the distance between Europe and America.
           Therefore, as Collier rightly says "a:lthough mining represented the decisive economic element in colonial Latin America, we should not forget that it absorbed only a fraction of the labor force, and that the overwhelming majority of the people lived on the land. This was

Latin America: blockages to development                                                  105

to remain true until the twentieth century. With the important exception of the Brazilian sugar plantations, most farms and ranches in colonial times were in business to supply the local market or a neighbouring colony rather than to export to Europe" ..."The Spanishsettlers' preference for urban life and the consequent proliferation of colonial cities meant that there was always a steady demand for the products of the countryside" (22)
        Moreover. "a consideration of the subject seems to reveal the existence (in the colonies. R.R.) of an economy, lively, robust and expansive, that stands in sharp contrast to the arthritic decaying state of Spain's general economy in the seventeenth century" (23). And. finally on this matter. "from about 1600 onwards. the American colonies were becoming increasingly self-sufficient in the primary commodities they had traditionally imported from Spain -grain. oil and wine- coarse cloth was also now starting to be locally produced; ship-building developed rapidly. and inter-colonial trade boomed. These changes coincided with the growth of a creole aristocracy in the colonies. whose wealth was derived from agriculture rather than mining"... "The mines themselves were subject to a deepening crisis from the second decade of the 17th century onwards" (24)
        At the basis of this relatively productive boom in the rural economy was the formation and development of what came to be a main feature in this particular society: the large estate.
        The large estate. which took three forms -the hacienda, ranch and plantation -appeared as a landed property within an organisation of labour based upon direct labourers submitted to labour tribute.

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In other words, the great estate appeared alongside the first unit of production in the colonies: the encomienda. The latter was not a landed estate but a grant of indian labour and tribute in kind. But, as I mentioned before, this organisation of native labour demonstrated itself incapable of coping with the needs of an export- oriented economy, and with the needs of the growing domestic economy. So, the landed estate was probably a response to the continued demand for food in the colonial cities and the increasing inability of amerindian communities (submitted to the encomiendas) to cope with that demand.
However, at the same time, these large estates needed to have labour power available at a cost similar to the encomiendas. For the plantations, in depopulated areas, this problem didn't arise, so they resorted to negro slave labour. Conversely, as I described above, slave labour was expensive in populated areas as compared with the utilisation of indian encomendados, or it was worth using it only if the owner of the estate was at the same time an encomendero. At the same time, forced labour (as a tribute) meant that its cost was nil. So, the large estates, to be competitive, had to use cost free labour power. That is why the hacendados and rancheros initially used labour power allotted to the colonial bureaucracy by the system of repartimiento. However, this particular source of labour power became increasingly insecure as the economy of indian communities declined. In other words, necessary labour (realised in the communities) was taking almost the total labour time of direct labourers. In such conditions, utilisation of wage labour was out of the question, since the availability of surplus means of subsistence was so scarce.
So, the dilemma was to secure a source of labour power in ways other

Latin America: blockages to development                                                  107

than through tribute (which was the main cause of communities declination) or wages.
              The big landowners had as their task to find a type of "economic compensation" other than salary. Eventually, this "economic compensation" took the form of the subsistence plot given to Indian labourers in exchange for their labour power on the large estates other than plantations and ranches. This was the first stage of what is called peonage in general, receiving various names in different regions -huasipungueros, inquilinos, yanaconas, etc. The road that led to this situation was debt-peonage. That is, landowners lending food, clothing, and sometimes money to individual indian labourers, and the former receiving the payment of such debt as labour on the large estate. At the end of this road was the attachment of the labourer to the large estate through the right to use a plot to cultivate his means of subsistence in exchange for work on the landowners lands. Thus the hacienda was created upon a secured source of labour power.
              As Collier describes it "the masters of the new estates found themselves increasingly dissatisfied with the supply of labor through the repartimiento or mita system, which proved cumbersome and unreliable for their purposes. The alternative was to attract indians from their own communities and to persuade them to take up permanent  residence on the estate" ..."the landowner could guarantee the newcomer a small plot of land for his own subsistence, a modest wage, and plentiful credit. The practical effect of these arrangements was to bind the indian, or mestizo peon as he became known, to the latifundio. The estate itself provided the peon with food, clothing, and perhaps implements -and as part of the deal plunged him into

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debt, a debt which could be transmitted from one generation to the next"..."Debt-peonage of this kind became basic to the Spanish- American agrarian economy during the seventeenth century, after which the earlier device of drafted, forced labour survived only for mining and for public works. The new system applied not only in agriculture but also in mining and manufacturing " ..."The hacienda became the fundamental unit of landholding in the Spanish- American countryside, just as the plantation did in colonial Brazil. Its owner was a creole or a Spaniard, sometimes a successful trader or miner who had acquired land for reasons of prestige as well as profit"... "It stamped colonial society with ineradicable marks of deep immobility, economic conservatism, and rigid class differences" (25)
At the time the Iberian conquerors arrived in the New World, Amerindian class societies had an organisation of labour in which there was a neat separation between necessary labour and surplus-labour. In the Aztec-Maya societies the direct labourer's necessary labour was conducted in the plot allotted to him from the communal land, and his surplus-labour was carried out on the land of the nobility (bureaucracy), public works and military service. In Inca society, direct labourer's necessary labour was also carried out on the plot allotted to him out of communal lands, and the surplus labour on the lands of the nobility (bureaucracy) allotted from communal land for that purpose, and in public works and military service. In both societies, the direct labourer could distinctively separate necessary labour (the one done for him and his family subsistence) as his own work, and surplus-labour (the one done for the State) as a work for which he should receive benefits from the state in the form of irrigation systems, roads, and food storage to use in case of scarcity.

Latin America: blockages to development                                                  109

In this particular way the relation of production state-labourer's community (typical of asiatic modes of production) was readily apparent to the Amerindian labourer.
        Conversely, the Iberian conquerors arrived in the New World with an ideology based on feudal relations of production at a stage in which the development of tenancy and wage labour tended to further conceal the separation between necessary labour and surplus-labour, in conditions of private ownership of land and individual peasant economy. Hence, the appropriation of surplus labour appeared to direct labourers as expropriation of part of their labour time, on the one hand, and the non-labourers regarded actual labour as a matter for direct labourers alone, on the other hand, the latter not expecting any significant role to be played by non-labourers in the organisation of actual labour.
         So, from the standpoint of production, the feudal ruling class was in a position to build up a State mainly directed towards the exaction of tribute from the direct labourer without taking any significant part in the labourer's process of production.
         Conversely, the Amerindian ruling class, acting in a mode of production with a clear separation between necessary and surplus- labour, in conditions of collective ownership of land and collective economy, built up a State directly involved in the process in which labourers produced, hence its tight organisation of labour, size of public works -irrigation systems, road, storage facilities, and so forth -and the State concern to feed the labourers when they were paying tax in labour. So the amerindian State, unlike the western feudal State, which was only repressive and coercive, was both repressive, coercive, and protective from the point of view of the labourers.

Latin America: blockages to development                                                  110

            The first step taken by the Iberian conquerors in the New World when faced with Amerindian class societies was simply to replace the conquerors as the new ruling class of these societies. But, in doing so, the conquerors destroyed the Amerindian State as well -mainly its religious, organisational and political instances - and attempted to replace the latter by a copy of the Iberian feudal State.
             So, the original relation Amerindian State-labourer's community was destroyed by the conquerors. On the other hand the basic feudal relation of production landlord-(individual) tenant, was distorted when the attempt was made to impose it on the New World. Since there was no individual ownership of land, and therefore no small peasant economy, the relation became landlord- communal tenant, producing an antagonistic contradiction between an individual mode of appropriation of surplus-labour and a communal mode of production of surplus-labour.
             In the first stage of collision, both Amerindian State and feudal individual tenant disappeared from the transitional relations of production, which became those defined by the unit landlord-labourer's community (considered as feudal tenant).
             The progress, and then the failure of this new relation of production produced the dissolution of both feudal rent as a mode of appropiation of surplus-labour, and communal labour as a mode of production of that surplus-labour, on the one hand; and the fusion of feudal landed property (as big estates) with the Amerindian way of producing necessary labour, on the other hand, bringing forth a synthesis: big estates {haciendas) were worked by labourers who were compensated (paid) individually with a subsistence plot for necessary labour,

Latin America: blockages to development                                                  111

blocking. in this way, the evolution of small peasant economy, and therefore, a necessary condition for developing capitalist relations of production.
         The unit landlord-labourer's community existed within the boundaries of the encomienda. This particular form of labour organisation was imposed by the Iberian feudal State -through Castile's Crown in the case of Spanish America. The entire Spanish New World was Castile's Crown encomienda (as feudal property of the king to be given in fief to his vassals). Thus, the Castile's Crown was the sole owner of all the land in the colonies, which was parcelled into grants of indian villages within each ones limits, to exact from them tribute in kind and labour, with the grantee giving tribute in kind and labour to the king of Castile. The encomendero, in the colonies, did not own the land, and the grant was for a limited time - the life of the grantee or two lives, etc. In accordance with this feudal distribution of land, the indians were given their rights to their houses, lands and animals as a mere merced real (royal will) as royal subjects (vassals), and in return for this they had to pay tribute in kind and labour to the Crown, both through the encomenderos and the colonial government.
          The Crown thus tried to establish the relation landlord-tenant in the New World. But the encomenderos were faced with the reality of having to subject labourer's communities and not small independent peasants to these relations. So, they simply subdued the indian communities living in villages, as if they were individual peasant plots, to the role of feudal tenants.

Latin America: blockages to development                                                  112

        This particular organisation of labour was bound to fail because of the combined action of the antagonistic contradiction between individual appropriation of surplus labour and collective production of surplus labour, which destroyed the superstructure suited to the latter (the Amerindian State).
         Of course, the span of the process of disintegration depended on the relative size of both participants from the economic and demographic point of view. In Latin America, the big Amerindian population played a role of a slowing down device in the disintegration. So, the conquerors searched for alternative ways of increasing their earnings through the development of private ownership of land, culminating in land being divided into big estates with labourers attached to them through economic strings.
        Eventually, then, the distorted feudal relation of production as it was in Latin America colonial times, landlord-collective tenant dissolved itself into a fresh fusion, pushing away the encomienda and bringing forth the hacienda, the relation landlord-direct individual labour as compensated by the labour time he spent on the landlords land.
        Actual separation between necessary labour and surplus-labour tended to overlap within the encomienda system, because tribute in kind was exacted from the whole of the community's land -not separate in kings' land, priests' land, etc. as in the Amerindian mode of production. Out of this overlapping, the native labourer was losing his 'ownership" in the realm of necessary labour as a product at his disposal, distinctively separated from the various forms of surplus-

Latin America: blockages to development                                                  113

labour- ruling class land tilling, labour services in public works, and so forth.
        Moreover, the benefits obtained by the Indians from their surplus-labour, through the organisation of the conditions of labour by the Amerindian State in the former mode of production, were taken away by the Spanish conquerors. So, the specific relation between necessary and surplus labour in the Amerindian mode of production dissolved itself, along with the basic relationship, state-collective labourer, on which it was based.
         Hence, when landowners (encomenderos, merchants, bureaucrats, etc.) attached individual native families to their haciendas through debts and subsistence plots, the indian labourers found themselves in a sort of fresh encounter with their former relation between necessary and surplus-labour. The separation, at least in its appearance, again became distinctive. That is, to the direct labourer,   the produce of his ceded plot was his property, not liable to expropiation. Moreover, labour exaction became less comprehensive than in the encomienda system, for labourers attached to haciendas were exempt   from any labour service to the state, as were individual labourers on private lands. In a word, work in the hacienda, meant getting rid of labour services in mines, building sites in towns etc., and   paying tribute in kind to encomenderos, priests, officials, and even being robbed by Spanish vagrants.
           So, under the new labour conditions, the individual native found himself working on the fields of the hacienda, for a ruler, as   before; tilling a small subsistence plot, not belonging to him;   having the possibility of borrowing some essentials from the ruler in    times of scarcity, in a more or less similar way as in the past;

Latin America: blockages to development                                                  114

being protected from "outside" dangers (in this case labour services and tribute in kind exacted from indian communities, by the colonial state) by the ruler. Therefore, somehow, the amerindian labourer again encountered a sort of caricature of the former amerindian state in his relation with the hacendado.
         With regard to the peones, the native labourer's ideology of depending upon a superior structure to organise his productive activities (the amerindian state), found a new basis that fitted the relation hacendado (hacienda)-peon. In the old mode of production, his surplus-labour "naturally" belonged to the state bureaucracy. Now, also "naturally" it belonged to the hacendado.
         As Charles Gibson describes the "hacienda society", in the first stage, it was "a stratification of white owners and native labourers. The peones formed the proletariat of every hacienda. The hacendado was its absolute master, euphemized in the term patron. The hacendado's house was a magnificent dwelling, the residence of his large family of relatives and the scene of banquets and elaborate receptions. To the peones of the hacienda the patron was an apotheosis of authority, inmediate in a way that the viceroy and king never were"... "Disobedience to his will brought severe and exemplary punishment. A prudent servility was essential if the hacienda labourers were to adjust peacefully to his condition, and internal revolution was   extremely rare in hacienda society. Thus the hacienda fitted the universal character of Spanish America". (26).
          So, eventually, the dissolution and fusion of the basic relations of production of the feudal mode of production in collision with the

Latin America: blockages to development                                                  115

Amerindian (asiatic) mode of production produced the synthesis hacienda-peon (individual appropriation of surplus-labour- individual production of surplus-labour as based upon an organisation of labour in which the direct labourer worked collectively for the non labourer and tilled individually his own means of subsistence), alongside a new economic role played by the labourer's community.
         The unit of production of the disintegrated Amerindian mode
of productiont the labourer's community became an isolated structure stagnating because of a lack of a superstructure destroyed by conquest and colonisation. Neverthelesst this remnant of the old (or defeated) mode of production, stagnated as it was came to play the role of unit of subsistence for the direct-labourers who were not absorbed by the new relation of production, hacendado-peon, and also remained as a source of labour power and tribute in kind for the colonial state. In turn, it suited the hacendado's needs to have a source of labour power without cost, and, moreover, served as a pressure on labourers to submit themselves to the new conditions of labour. This provided one way out from poor living conditions in the communities.
          It constituted a source of added surplus-labour which was always available to the colonial system of production, and a factor of equilibrium between labour demand and supply, to the benefit of the ruling class. At the same time, the huge amount of land available gave to this remnant of the old mode of production an opportunity to survive and to merge with the hacienda as a peripheral structure, developing links of dependence (use of roads and irrigation water belonging to the hacendado, etc.) and submission with the hacienda.

Latin America: blockages to development                                                  116

"It became physically impossible to separate haciendas from indian towns. Haciendas employed the inhabitants of indian towns as peones and controlled all their activities" ..."Haciendas repeatedly incorporated and absorbed native towns" (27). These indian towns (labourer's communities) became the units of an economy of subsistence which eventually came to provide an unlimited source of labour for the Latin American ruling class, even into the twentieth century.
         Haciendas became economic units producing not only their own food, but also clothing, pottery, implements, and even domestic furniture. They were self-sufficient units of production reproducing their own labour power and being a source of produce consumed by others than the direct labourers who worked on them - that is, the white ruling class and those labourers working in manufacturing, mining and services- and even for export.
         Being self-sufficient at the level of reproduction of labour power, haciendas had no need to enhance the level of forces of production in order to cope with increased demand for their products; the hacendados just had to resort to putting more labourers to work and more land under cultivation.
         On the other hand, being closed markets, isolated from each other, haciendas contributed to blocking the development of a domestic market, and, furthermore, limited the circulation of money between labourers paying labour power mainly in land and sometimes in food; and at best, in kind and money. Therefore, the hacienda system did put out of demand a huge majority of the Latin American population. The domestic market was limited to demand from non-labourers plus   the small middle-sectors, in all, no more than 3% of the population in 1600 and less than 20% in 1800. Thus, a doubly stratified society

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developed based upon this particular relation of production of hacendado-peon: non-labourers, the ruling class stratum, with a market of its own and the monopoly of land and means of production; direct labourers, the subjected class stratum, with no access to ownership of land, living in a subsistence economy within a considerably reduced market. Any need to increase productivity, enlarge accumulation or even import new technology from Europe was outside the rationality of this system of production. The money which circulated in the non-labourers market had to be wasted rather than accumulated in the form of capital. Any accumulation beyond the rationality of such a mode of production would break the equilibrium of the relation hacendado-peon, pushing forward wage labour, taking available labour power out of the countryside weakening in this way the basis of the political power of the hacendados. On the other hand, faced with the need to replace means of production, it was cheaper to buy them on the European market than produce them in Latin America, given its reduced market.