Calculated from Rebecca Horn, Postconquest Coyoacan: Stanford University Press, , p. The overall role of Mexico within the Hapsburg Empire was in flux as well. Nothing signals the change as much as the emergence of silver mining as the principal source of Mexican exportables in the second half of the sixteenth century. Silver Mining 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. 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. The graph below provides a picture of the remissions of all Mexican silver to both Spain and to the Philippines taken from the work of John TePaske. This production has to be considered in both its domestic and international dimensions.
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 , who donated warships to Spain in the eighteenth century, to individual natives in Zacatecas smelting their own stocks of silver ore. In the Iberian Peninsula, income from American silver mines ultimately supported not only a class of merchant entrepreneurs in the large port cities, but virtually the core of the Spanish political nation, including monarchs, royal officials, churchmen, the military and more.
And finally, silver flowed to those who valued it most highly throughout the world. Mining centers tended to crowd out growth elsewhere because the rate of return for successful mines exceeded what could be gotten in commerce, agriculture and manufacturing. Because silver was the numeraire for Mexican prices—Mexico was effectively on a silver standard—variations in silver production could and did have substantial effects on real economic activity elsewhere in New Spain.
For this reason, the expansion of Mexican silver production in the years after was never unambiguously accompanied by overall, as opposed to localized prosperity. Mexican silver accounted for well over three-quarters of exports by value into the nineteenth century as well.
If there was any threat to the American Empire, royal officials thought that Mexico, and increasingly, Cuba, were worth holding on to. From a fiscal standpoint, Mexico had become just that important. The ensuring conflict, known as the War of Spanish Succession, came to an end in The dynasty he represented was known as the Bourbons.
For the next century of so, they were to determine the fortunes of New Spain. One of them dealt with raising revenue and the other was the international position of the imperial economy, specifically, the volume and value of trade.
A series of statistics calculated by Richard Garner shows that the share of Mexican output or estimated GDP taken by taxes grew by percent between and The number of taxes collected by the Royal Treasury increased from 34 to between and An entire array of new taxes and fiscal placemen came to Mexico. They affected and alienated everyone, from the wealthiest merchant to the humblest villager.
If they did nothing else, the Bourbons proved to be expert tax collectors. From the mid-sixteenth century onwards, ocean-going trade between Spain and the Americas was, in theory, at least, closely regulated and supervised. Ships in convoy flota sailed together annually under license from the monarchy and returned together as well. Since so much silver specie was carried, the system made sense, even if the flotas made a tempting target and the problem of contraband was immense.
The point of departure was Seville and later, Cadiz. Under pressure from other outports in the late eighteenth century, the system was finally relaxed. As a consequence, the volume and value of trade to Mexico increased as the price of importables fell. Import-competing industries in Mexico, especially textiles, suffered under competition and established merchants complained that the new system of trade was too loose. But to no avail. There is no measure of the barter terms of trade for the eighteenth century, but anecdotal evidence suggests they improved for Mexico.
Admittedly, looking for modern economic growth in Mexico in the eighteenth century is an anachronism, although there is at least anecdotal evidence of technological change in silver mining, especially in the use of gunpowder for blasting and excavating, and of some productivity increase in silver mining.
So even though the share of international trade outside of goods such as cochineal and silver was quite small, at the margin, changes in the trade regime were important. There is also some indication that asset income rose and labor income fell, which fueled growing social tensions in New Spain.
In the last analysis, the growing fiscal pressure of the Spanish empire came when the standard of living for most people in Mexico—the native and mixed blood population—was stagnating. During periodic subsistence crisis, especially those propagated by drought and epidemic disease, and mostly in the s, living standards fell.
Many historians think of late colonial Mexico as something of a powder keg waiting to explode. When it did, in , the explosion was the result of a political crisis at home and a dynastic failure abroad. What New Spain had negotiated during the Wars of Spanish Succession—regime change— provide impossible to surmount during the Napoleonic Wars Internal commerce was largely paralyzed.
Silver mining essentially collapsed between and and a full recovery of mining output was delayed until the s. Thus neglected, they quickly flooded. At the same time, the fiscal and human costs of this period, the Insurgency, were even greater. With a reduced fiscal capacity, in part the legacy of the Insurgency and in part the deliberate effort of Mexican elites to resist any repetition Bourbon-style taxation, Mexico defaulted on its foreign debt in For the next sixty years, through a serpentine history of moratoria, restructuring and repudiation , it took until for the government to regain access to international capital markets, at what cost can only be imagined.
Private sector borrowing and lending continued, although to what extent is currently unknown. What is clear is that the total internal plus external indebtedness of Mexico relative to late colonial GDP was somewhere in the range of 47 to 56 percent.
Leaving aside simple questions of uncertainty, there is the very real matter that the national government—whatever the state of private wealth—lacked the capacity to service debt because national and regional elites denied it the means to do so. This issue would bedevil successive regimes into the late nineteenth century, and, indeed, into the twentieth. A rough estimate of output per head in the late colonial period was perhaps 40 pesos dollars.
By the time United States troops crossed the Rio Grande, a recovery had been under way, but the war arrested it. Further political turmoil and civil war in the s and s represented setbacks as well.
In this way, a half century or so of potential economic growth was sacrificed from the s through the s. This was not an uncommon experience in Latin America in the nineteenth century, and the period has even been called The Stage of the Great Delay. Agricultural Recovery and War On the other hand, it is clear that there was a recovery in agriculture in the central regions of the country, most notably in the staple maize crop and in wheat. The famines of the late colonial era, especially of , when massive numbers perished, were not repeated.
There were years of scarcity and periodic corresponding outbreaks of epidemic disease—the cholera epidemic of affected Mexico as it did so many other places—but by and large, the dramatic human wastage of the colonial period ceased, and the death rate does appear to have begun to fall. Very good series on wheat deliveries and retail sales taxes for the city of Puebla southeast of Mexico City show a similarly strong recovery in the s and early s, punctuated only by the cholera epidemic whose effects were felt everywhere.
It is not possible to put numbers on the cost of the war to Mexico, which lasted intermittently from to , but the loss of what had been the Southwest under Mexico is most often emphasized. This may or may not be accurate. Certainly, the loss of California, where gold was discovered in January , weighs heavily on the historical imaginations of modern Mexicans.
In the long run, the loss may have been staggering, but in the short run, much less so. The northern territories Mexico lost had really yielded very little up until the War. In fact, the balance of costs and revenues to the Mexican government may well have been negative. The reasons are several. In , the government essentially went broke. While it is true that its financial position had disintegrated since the mids, marked a turning point. The entire indemnity payment from the United States was consumed in debt service, but this made no appreciable dent in the outstanding principal, which hovered around 50 million pesos dollars.
The limits of debt sustainability had been reached: While only the French actively prosecuted the war within Mexico, and while they never controlled more than a very small part of the country, the disruption was substantial. By , with Maximillian deposed and the French army withdrawn, the country required serious reconstruction.
Their beginnings actually went back several decades earlier, to the last presidency of Santa Anna, generally known as the Dictatorship But Santa Anna was overthrown too quickly, and now for the last time, for much to have actually occurred. A ministry for development Fomento had been created, but the Liberal revolution of Ayutla swept Santa Anna and his clique away for good.
So it is appropriate to pick up with the story here. Where did Mexico stand in ? For the moment, let us look at the period leading up to , when the French withdrew from Mexico. Since the share of the illiterate population was clearly larger, we might infer that living standards for most Mexicans declined after , however we interpret other quantitative and anecdotal evidence. The regimes after were faced with stagnation.
Real per capita output oscillated, sometimes sharply, around an underlying growth rate of perhaps one percent; changes in the distribution of income and wealth are more or less impossible to identify consistently, because studies conflict. Its key elements were the creation of a secular, bourgeois state and secular institutions embedded in the Constitution of This was the beginning of the end of the Ancien Regime.
This was effectively the largest transfer of land title since the late sixteenth century not including the war with the United States and it cemented the idea of individual property rights. With the expulsion of the French and the outright repudiation of the French debt, the Treasury was reorganized along more modern lines. Equally, if not more important, Mexico now entered the railroad age in , nearly forty years after the first tracks were laid in Cuba in The educational system was expanded in an attempt to create at least a core of literate citizens who could adopt the tools of modern finance and technology.
Literacy still remained in the neighborhood of 20 percent, and life expectancy at birth scarcely reached 40 years of age, if that. Yet by the end of the Restored Republic , Mexico had turned a corner. It was a rural, agrarian nation whose primary agricultural output per person was maize, followed by wheat and beans.
For the most part, the indigenous population lived on maize, beans, and chile, producing its own subsistence on small, scattered plots known as milpas.