For the most parts of the 17th and 18th centuries, the Portuguese and the Spaniards held sway in Latin America. They were in control of not only the political but economic and social structures of these areas. They, thus, monopolized trade, agriculture, mining and industrial developments. This paper provides a sketch of the colonial policies of Portugal and Spain in these countries and arrived at some consequences those policies had on the Brazilian and Mexican societies in the 17th and 18th centuries. The paper first starts by briefly describing the land and people of these areas before the arrival of the Europeans, the arrival of the latter, proceeded to describe the kind of structures that evolved in these colonies and then the responses of both the Spanish and Portuguese governments and individuals in agriculture, mineral and industrial development. Last, the consequences all these had on the local Indians and their societies were highlighted. The study of colonialism, no doubt, is still essential as it provides students and teachers with important tools both to appreciate and reply to some of the critical political and economic questions of the world. Such tools can empower students to develop practical solutions to problems that hinder global peace, stability and economic equality. Also, the study of colonialism represents one of the most important ways of understanding the roots of contemporary global political and economic processes and seeks to give students the tools both to understand the detailed histories of particular regions of the world as well to analyze broader international issues.

A Brief on Latin America before the Arrival of the Europeans:

At the time of European ‘discovery', the territory of current day South America had as many as 2,000 tribes who were traditionally mostly semi-nomadic who subsisted on hunting, fishing, gathering, and migrant agriculture [1]. In areas such as Brazil, Indians were just beginning to farm while others were organized into tribal levels [2].But the Aztecs of Mexico on the other hand, were settled cultivators producing crops like maize, cassava, beans and squash. The mass of the people were peasants who pay tributes and cultivate public lands devoted to the upkeep of the nobility and priesthood that hasbeenimposedonthem.Unlike the Brazilians, these people have left many testimonies to their greatness in forms of various religious monuments built with more skills than the Egyptian Pyramids. Also, they had technically efficient construction for the battle against nature – irrigation works and artificially built islands, an organized system of government, and efficient numerical system based on solar year [3]. Trade was also organized so also a writing system. In short as Galeano reveals, there was something of everything in Latin America, from astronomers to cannibals, engineers and Stone Age savages. But none of the local people knew anything like glass, iron, and gun powder or used wheels [2].            

The Arrival of the Europeans

Although there were certainly some camouflages in the forms of bringing the Indians within the reach of civilization and Christianity, today we know that what brought the Europeans into Latin America was different. They came to seek the mysterious hordes of gold and silver in these areas. 

There was also the need for pepper, ginger, cloves, cinnamon and nutmeg prized as salt in preserving meat against putrefaction and loss of flavor during winter [1]. It was the search for these that led to the drastic change of Latin American economy in the 17^th and 18^th centuries. From the beginning of the 16^th century, the Indians, thus, despite their achievements in life very soon fell as easy prey to the might of the Portuguese and Spanish colonialists. The Indians were subjugated by either one or two or all of the following methods – direct military conquest through the usage of superior weapons, exploitation of the inter-tribal division and resentments, and then of course through contact with new diseases like leprosy, small pox, tetanus, yellow fever, gonorrhea, tuberculosis etc. that accompanied the new introducers [4]. The people, for example, were helpless due to lack of immunity against the European diseases as such killed tens of thousands of indigenous people. The diseases spread quickly along the indigenous trade routes, and whole tribes were likely annihilated without ever coming in direct contact with Europeans. These developments coupled with the culture shock that the Indians were later to witness as a result of colonialism saw both Brazil and Mexico enter in to the 17^th century with the most disastrous structural economic and demographic declines in world history [5]. With this background, this paper will now proceed to look into the colonial structures that came about in these areas during the 17^th and 18^th centuries.

Europeans in Latin America:

When the Portuguese reached Brazil they found that the people had no treasure hoards, no any mines of gold and silver but an immensely coastal forest. The people were also mainly hunters and gatherers and their industrial activities were only confined to the making of pots, cloths, hammock and weapons. But no sooner had the new immigrants settled when this setting changed. During the early years of Brazilian colonial history, the economic exploitation of the territory was based first ondyewood (Brazil wood(pau brazil) extraction) (16th century), which gave the territory its name [6]. Since the initial attempts to find gold and silver failed, the Portuguese colonists adopted an economy based on the production of agricultural goods that were to be exported to Europe.Tobaccoandcottonand some other agricultural goods were produced, but sugar became by far the most important Brazilian colonial product until the early 18th century.From 1530s however, sugar, which had now changed from the position of luxury to that of necessity became the dominant culture in the northeast of Brazil. The first sugarcane farms were established in the mid-16th century and were the key for the success of the captaincies of São Vicente and Pernambuco, leading sugarcane plantations to quickly spread to other coastal areas in colonial Brazil. At first this business was held back by the Crown for its competition with Madeira and Sao Tome. But by the second half of the 18^th century wealthier Portuguese individuals who had experiences in managing large estates and could build sugar refineries were attracted to Brazil. From the start, the Portuguese entrepreneurs encountered favorable conditions – a coastline of excellent black soil easily worked once cleared, adequate rainfall, and low transportation cost to shipping centers at Recife and Bahia [5].

But upon all these favorable conditions, labor force was absent for the Indians have been almost wiped out.To supplement that the Portuguese, who had experience of African slaves, readily shipped in large numbers. In the 16^th century, for instant, the Portuguese shipped about 50,000 slaves to Brazil. By the 17^th century this figure had risen to over 500,000 in recognition of the fact that, ‘No Slaves, no sugar, no Brazil’.

In the Northeast, sugar plantations grew. Many crushing mills that employed between 20 -100 labor force and used water power in crushing cans also came in to existence. By 1570 there were about 50 sugar mills in Brazil; this number later rose to 346 in 1629 and 528 by 1710 [3] including small, medium and large mills. The result of all these developments was that by the early part of the 18^th century Brazil was to become the world’s chief source of sugar. The period of sugar-based economy (1530 – c. 1700) is known as the sugar age in Brazil[7]. In the interior at the mouth of the Amazon, there developed some settlements engaged in tobacco and cotton. The southern coastline on the other hand developed cattle economy to provide meat for the plantations and goldfields that later emerged. Many industries linked with pastoralism like tanning, cheese production also emerged. Hides also became very important for export in the 18^th century. In Maramboa cotton also witnessed a brief boom encouraging simple ginning. The 1781 Royal Decree also stipulated the production and processing of indigo around Rio de Jenairo [5]. Meanwhile, the Portuguese like most colonialists, attempted to severely restrict colonial trade. Thus, Brazil was only allowed to export and import goods from Portugal and other Portuguese colonies. In this way, Brazil exported sugar, tobacco, cotton and other local products and imported from Portugalwine,olive oil,textilesand luxury goods – the latter imported by Portugal from other European countries. Africa played an essential role as the supplier of slaves, and Brazilian slave traders in Africa frequently exchangedcachaça, a distilled spirit derived from sugarcane, and shells, for slaves. This comprised what is now known as thetriangular tradebetween Europe, Africa and the Americas during the colonial period [8].

Meanwhile in Mexico, the economic basis of colonialism was first initiated in agriculture which was built from the growing agricultural activities alongside with the Indian peasant economy. The Spaniards later introduced new crops such as bananas, citrus, fruits and wheat. But plantation economy never became as successful as that of Brazil. In the first place, there was the ecological factor – unsuitability of the land and there was also lack of expertise. In animal husbandry the colony also failed. But here this was as the result of the Crown’s policy of raising certain animals to the detriment of others. A clear example here is when the Spanish Crown prohibited the raising of cattle, sheep, and horses among the Indians less they should compete with Spaniards who were involved in the business [3]. This and other policies of this kind led to the failure of plantation economy in Mexico.

Unsuccessful in this business, the Mexican economy shifted to precious stones. While silver mining and smelting was practiced before the conquest, it was never a focal point of indigenous activity. But for the Europeans, Mexico was largely about silver mining. From the mid- sixteenth century onward, it was explicitly understood by the viceroys that they were to do all in their power to “favor the mines,” as one memorable royal instruction enjoined. Again, there has been much controversy of the precise amounts of silver that Mexico sent to the Iberian Peninsula. What we do know certainly is that Mexico (and the Spanish Empire) became the leading source of silver, monetary reserves, and thus, of high-powered money. Over the course of the colonial period, most sources agree that Mexico provided nearly 2 billion pesos (dollars) or roughly 1.6 billion troy ounces to the world economy [9]. The Aztec silver deposits were the first to be discovered in 1546. And within 4 years they become the sites of mining campus with mills and many refineries. And with the immigration of the Germans in 1570 large mining ensured. The Germans introduced the mercury amalgamation process. The result was that from 1650s silver became the basis of Mexican economy. Silver thus became Mexico’s principal exportable good, and remained so well into the late nineteenth century.The residual claimants on silver production were many and varied. There were, of course the silver miners themselves in Mexico and their merchant financiers and suppliers. They ranged from some of the wealthiest people in the world at the time, such as the Count of Regla (1710-1781), who donated warships to Spain in the eighteenth century, to individual natives in Zacatecas smelting their own stocks of silver [10]. But unfortunately, by the end of the 17^th century silver export fell. This resulted in Mexico’s inability to buy less from Europe. To add salt into an injury, agricultural producers also became unable to sell to the miners whose livelihood was by now dependent on the mines. Here the result was less agricultural produce and thus low prices for them. The Mexican ranchers, for example, found prices of beef that became stabilized at about 1630 falling while that of maize which had doubled in half a century ceased to rise in 1627 and fluctuated around a stable trend for over a hundred years [11]. In Brazil, the end of the 17^th century also saw its monopoly in sugar market greatly challenged by the Caribbean. Even though Brazilian sugar was reputed as being of high quality, the industry faced a crisis during the 17th and 18th centuries when the Dutch and the French started producing sugar in theAntilles, located much closer to Europe, causing sugar prices to fall. The Dutch here with more fertile land at their disposal and better techniques came to supersede that of Brazil. Furthermore, the rise of mercantilism in France and Britain also limited the market for Brazilian sugar to protect the production of their colonies. Here also like in Mexican situation the fall in the economy also brought problems. Plantation farmers, for example, who could not make much from their plantations abandoned them or sold them and resorted to life of banditry. 

But then again in 1728, with the discovery of Minus Geraes, one of the world’s largest mines, the economy of Brazil was saved. The discovery of gold was met with great enthusiasm by Portugal, which had an economy in disarray following years of wars against Spain and the Netherlands. Agold rushquickly ensued, with people from other parts of the colony and Portugal flooding the region in the first half of the 18th century. The large portion of the Brazilian inland where gold was extracted became known as theMinas Gerais(General Mines). Gold mining in this area became the main economic activity of colonial Brazil during the 18th century. In Portugal, the gold was mainly used to pay for industrialized goods such as textiles and weapons from other European nations (since Portugal lacked an industrial economy) to, especially during the reign ofKing John V, constructBaroquebuildings such as theConvent of Mafra. Apart from gold,diamonddeposits were also found in 1729 around the village ofTijuco, nowDiamantina. A famous figure in Brazilian history of this era wasXica da Silva, a slave woman who had a long-term relationship in Diamantina with a Portuguese official; the couple had thirteen children and she died a rich woman [12]. 

In the hilly landscape of Minas Gerais, gold was present inalluvial depositsaround streams and was extracted using pans and other similar instruments that required little technology. Gold extraction was mostly done byslaves. The Gold industry brought hundreds of thousands of Africans to Brazil as slaves. The Portuguese Crown allowed particulars to extract the gold, requiring a fifth (20%) of the gold (thequinto) to be sent to the colonial government as tribute. To prevent smuggling and extract thequinto, in 1725 the government ordered all gold to becastinto bars in theCasas de Fundição(Casting Houses), and sent armies to the region to prevent disturbances and oversee the mining process. 

The large number of adventurers coming to the Minas Gerais led to the foundation of several settlements, the first of which was created in 1711:Vila Rica de Ouro Preto,SabaráandMariana, followed bySão João del Rei(1713), Serro, Caeté (1714), Pitangui (1715) and São José do Rio das Mortes (1717, nowTiradentes). In contrast to other regions of colonial Brazil, people coming to Minas Gerais settled mostly in villages instead of the countryside. In 1763, the capital of colonial Brazil was transferred fromSalvadortoRio de Janeiro, which was located closer to the mining region and provided a harbor to ship the gold to Europe. According to the historian Maria Marcílio, "In 1700 Portugal had a population of about two million people. During the eighteenth century, approximately 400,000 lefts for [the Portuguesecolonyof] Brazil, despite efforts by the crown to place severe restrictions on emigration.” [13].

Many towns and farming areas very soon became devoid of people as the prices of foodstuffs soured. Cattle ranching also expanded and many towns also grew in the south. In this way the whole weight of Brazilian economy shifted southwards causing demographic problems and distorted growth. But of course, the boom greatly enriched Brazil for it led to great addition to Brazilian population and caused the diversification of its economy especially in the southwards to feed and supply the mining and trading centers. 

Gold production declined towards the end of the 18th century, beginning a period of relative stagnation of the Brazilian hinterland but again in 1760s the gold mining passed its peak. Here also Brazil was for another time lucky for a more better plantation economy grew towards the end of the 18^th century with cocoa, cotton and coffee producing as its basis. With this development we found Brazil by the end of the century exporting sugar, cotton, leather, cocoa, tobacco, rice, indigo, dyewood and gold. While in returns she receives wine, cheese, olive oil, brandy, salt, ham, biscuits, etc. Having outlined these structures, this paper will now look into the responses of both the two colonial governments and their people to these developments.

Responses of Spain and Portugal to the New Developments

As far as Brazil was concerned, ever since when plantation economy started growing, many economic activities that were subsidiary to plantation industries and the like also came into existence. Water transportation also became an important force of Brazilian economy necessitating the emergency of ship building, repair industries and rope making in ports of Salvador, Belen and Rio de Jenairo. Carpentry, blacksmithing were also encouraged. While in many towns, artisans, tailors, bakers and brick makers also emerged. By 1792 there were over 450 such crafts in Rio de Janeiro alone [3].

Mexican economy was to become more diversified. This became so because of the latter’s inability to buy much from Europe. Realizing this, the colony from the 17^th century started to expand its own industrial production to replace some of the European goods it imported. Thus started the development of capitalist textile industries, resulting in towns like Puebla, Toluca and Texcoco developing large woolen industries. In the south, the cotton producing areas of Oaxaca, Michoacoan and Campeche also supported many manufacturing industries. But on the whole the goods that Mexico produced were the cheaper and low-quality ones, with high grade ones continued to come from Europe. In addition to all these activities, Mexico like Brazil also began ship building industry. This business which began with only a few vessels intended for inter-colonial trade by 1560s was later to be developed providing for not only the latter trade but international trade as well. So reputed was this venture that by the 17^th century nearly half the shipping that crossed the Atlantic was colonial built.

With all these developments in both colonies neither ever emerged as well developed and structured economy. Was it because of the ‘laziness’ of the Indians or the ‘stupidity’ of the blacks as many bourgeoisie scholars would have us believe? The answer to these questions lies behind the fact that these two colonial powers had never ventured to help the autochthonous people in developing their areas. But rather their aim was to pillage rape and exploit their colonies. Mercantile policies designed to prevent the production of certain goods and trade with certain people and passing through certain ports clearly show the hypocrisy behind colonial minds. Both the two powers also restricted the manufacture of certain products less it should compete with the home ones. They also closed the gates of their colonies to other European powers and doors of other European powers to their colonies. Until the end of the 18^th century, for example, Brazil could not trade with any other country but Portugal. Moreover, instead of investing their surplus capital in more meaningful and lucrative ventures most Spanish and Portuguese individuals ended up becoming landed gentries and providing for wasteful projects such as building churches to provide what Marx called the opium to the masses.

Accepting that the larger part of the wealth stolen from these two colonies was sent to the metropolis, one might be tempted to ask as to why wasn’t either Portugal or Spain developed today? In an attempt to answer these questions a lot of explanations have already been advanced. But the most popular and acceptable being that the bullion revolution brought to both these powers monetary inflations at home that pushed prices ahead of the rest of Europe. And that the high prices in Portugal and Spain encouraged the inflow of foreign manufactures that begun to run the two metropolis’ industries. The bullion outflow that points for these goods and that which financed the expenditures of the two powers abroad, spread silver through Europe, and rising prices along with it. Thus, the gains of Europe on the one hand and the loss of Portugal and Spain on the other hand.

Socio – Economic Consequences

The first consequence was the horizontal division of the two societies into the Lords and the vassals, master and serfs – situations that still survives. At the top of the ladder were definitely the Portuguese and the Spanish land owners and merchants and the missionaries. Throughout the colonial period the latter were to become the largest and wealthiest land holding class in Latin America controlling as much as half of the land. And when the banks were non-existing, the church organized banks. Consequently, when a land owner needs to borrow money, he applied to the monasteries, for they alone had accumulated surpluses to invest. They, therefore, became the real banks of the colonial era (Stanley, op.cit). But this is not to say that all churches were birds of the same feathers in Latin America. In fact, the Jesuits did try to uphold their vows. They were said to have established numerous villages, organized industries such as flour mills, bakeries, lime manufacture, rope making, pottery and textiles, etc. for the betterment of the Indians. But of course, the colonialist wouldn’t allow these. In 1767 they were expelled.

The Indians were turned into a situation that was worse than slavery. They were at first granted with land to the new landowners free of charge. Later when force labor was prohibited, they were tied with debts to keep them in total bondage to their employers. The African slaves, on the other hand, were commoditized with no any rights in spite of the fact that it was their labor that served all developments in these colonies. The consequence of this entire dichotomy is the creation of mutual suspicion among the Latin Americans – a situation that is dangerously preventing the development of the region today. This is because as long as this remains so the political situation would always remain fragile and thus the lack of the peaceful atmosphere needed for any meaningful development.

Colonial practices destroyed much of the Brazilian forest [14]. This was made possible in part by colonial conceptions of the natural world as a disposable collection of utilities with no inherent value. Mining practices significantly harmed the land. To facilitate the extraction of gold, in some region’s large swaths of forest along hillsides were burned [15].In addition, 4,000 square kilometers of theAtlantic Forest regionwere denuded for mining, leaving the terrain “bald and deserted” [14]. This massive destruction of the natural environment was a consequence of the colonial culture of extraction and unsustainability [14]. This resulted into the turning of Latin American land of tropical forests into regions of the savannah. Naturally endowed with food they now became places of hunger. Where everything once bloomed, the destructions of the Latifundas left sterile rocks and washed-out soil. At first there were mangos and orange plantations, but all that were left to their fates or reduced to small orchards reserved exclusively for the sugar mills owners’ houses. Fire used to clear the forest also devastated the flora and fauna, dear, wild boar and rabbits. All these were sacrificed to entrench sugarcane monoculture. Brazilian northwest, for example, is today the most underdeveloped area in the Western Hemisphere [2]. The activities of the colonialists were also to render Latin America one of the most important sources of development – human resource as we have already pointed out where many Indians were sacrificed during the periods of conquest and in the mines.

But then the worst impacts of colonialism in these territories were the repatriation of the riches of these areas to the metropolis in Europe. And to make matters even worst, the little capital that was left was squandered in ostentations and luxury and wasteful projects. On the whole the colonial experiences of the two colonies clearly prove Rodney’s dictum that ‘colonialism had only one hand – it was a one-armed bandit [16].

Mexico was established by military conquest and civil war. In the process, a civilization with its own institutions and complex culture was profoundly modified and altered, if not precisely destroyed, by the European invaders. The catastrophic elements of conquest, including the sharp decline of the existing indigenous population, from perhaps 25 million to fewer than a million within a century due to warfare, disease, social disorganization and the imposition of demands for labor and resources should nevertheless not preclude some assessment, however tentative, of its economic level in 1519, when the Europeans arrived [17].

On the whole one can rightly assert that Spanish colonization had a negative impact by creating more poverty and discrimination toward the native people. The native people faced discrimination and inequality that caused an increase in poverty and an income gap that still exists today. Any understanding of the history of the South America today must necessarily take into cognizance what the Europeans did to the region in the past. Galeano summed it all where he says: The division of labor among nations is that some specialize in wining and others in losing. Our part of the world, known today as Latin America, was precarious. It has specialized in losing ever since those remote times when Renaissance Europeans ventured across the ocean and buried their teeth in the throat of Indian Civilization [2].

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2. Galeano, Eduardo. Open Veins of Latin America: Five Centuries of the Pillage of a Continent. NYU Press, 1997.

3. Bashir, Ibrahim L. A Survey of Colonial Economic History of Brazil and Mexico in the 17th & 18th Century – A Study in Economic Policies and Growth. Sokoto, 1983.

4. Morison, Samuel Eliot. Selections from the European Discovery of America: The Southern Voyages. Oxford University Press, 1974.

5. Stein, Stanley and Barbara Stein. The Colonial Heritage of Latin America. Cambridge University Press, 1970.

6. Russell-Wood, A.J.R. “Business interest groups in nineteenth-century Brazil.”

7. Lockhart, James, et al. “Latin America, chapter 7: Brazil in the sugar age.” Cambridge University Press, 1983.

8. Lockhart, James and Stuart B. Schwartz. Early Latin America: A History of Colonial Spanish America and Brazil. Cambridge University Press, 1983.

9. Murillo, Daniel V. Urban Indians in a Silver City: Zacatecas, Mexico, 1546–1810. Stanford University Press, 2016.

10. Couturier, Edith B. The Silver King: The Remarkable Life of the Count of Regla in Colonial Mexico. UNM Press, 2003.

11. Davis, Ralph. The Rise of Atlantic Economics. New York, 1993.

12. Furtado, Júnia Ferreira. Chica da Silva: A Brazilian Slave of the Eighteenth Century. Cambridge University Press, 2008.

13. Marcílio, Maria Luiza. “The population of colonial Brazil.” In Bethell, Leslie, ed. Colonial Brazil, vol. 2, 1984.

14. Dean, Warren. With Broadax and Firebrand: The Destruction of the Brazilian Atlantic Forest. University of California Press, 1997.

15. McNeill, J.R. “Agriculture, forests, and ecological history: Brazil, 1500–1984.” Environmental Review, vol. 10, no. 2, 1986, pp. 122–33. JSTOR, doi:10.2307/3984562.

16. Rodney, Walter. How Europe Underdeveloped Africa. London, 1972.

17. Denevan, William M., editor. The Native Population of the Americas in 1492. 2nd rev. ed., University of Wisconsin Press, 1992.