Prices, Wages and Economic Change. The Espacio Peruano Region, 1591-1790. por Eduardo Martín...

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Prices, Wages and Economic Change. The Espacio Peruano Region, 1591-1790.

Artculo publicado en Anuario de Estudios Bolivianos, Archivsticos y Biliogrficos N 16

(2010), pp. 311-325. Difundido con autorizacin de los editores.

Eduardo Martn Cuesta, Ireneo Moras and Carlos Newland

Abstract: In this paper price series for the Espacio Peruano Region (todays Bolivia, Chileand Peru) are elaborated covering the period 1591-1790. An index of relative prices isconstructed that compares land intensive versus labour intensive products. These series allowtesting (and confirming) the traditional vision presented by demographic historians, based onqualitative rather than quantitative data (since no general and comparable censuses exist for the region before the end of the 18th century). The price series, together with wage data,suggest that a rise in productivity took place during the 18th century, despite an importantincrease in population. A possible explanation of this phenomenon is that the increase in productivity was caused by a liberalization of labour markets, especially affecting the Indian population.

Precios, Salarios y Cambio Econmico. El Espacio Peruano, 1591-1790.

Eduardo Martn Cuesta, Ireneo Moras y Carlos Newland

Resumen: En este trabajo se elaboran series de precios correspondientes al Espacio Peruano(actuales Bolivia, Per y Chile) que cubren el periodo 1591-1790. Con las series se elaboranndices de precios relativos de productos tierra intensivos respecto de precios de productosmano de obra intensivos. Dichas series posibilitan el testeo y corroboracin de lasafirmaciones tradicionales sobre historia demogrfica de la regin, que han sido ms bien dendole cualitativa ya que no se poseen censos poblacionales comparables antes del sigloXVIII. Las series de precios elaboradas junto con informacin sobre salarios nominalesdurante el siglo XVIII, permiten concluir un proceso de aumento de la productividad quecontrarrest posibles tendencias malthusianas. Se especula que este aumento de la productividad se debi a una liberalizacin de la economa, en especial de la mano de obraindgena.

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Prices, Wages and Economic Change. The Espacio Peruano Region, 1591-

1790

Eduardo Martn Cuesta (CONICET), Ireneo Moras(UB and UCES) and Carlos

Newland, (ESEADE)

The relationship between factor endowments, such as population, and relative prices

has been analyzed in classical works of economic history, since Adam Smith1. From the point

of view of economic theory relative prices are directly related to factors and the intensity of

their use in production of various goods. Therefore, changes in the relative prices of different

types of goods are caused by fluctuations in population. In the classical studies on this subject

by Phelps Brown and Hopkins2, prices and wages in England and Europe since the 13th are

analysed. They show how the fall in population provoked by the Black Death resulted in a

Carlos Newland began this work as fellow of the John Guggenheim Foundation. We are

grateful to Agustina Vence Conti for her help and to Peter Lindert and Hans Vogel for their

comments.

1 See, for example, Newland, Carlos y Daniel Waissbein, Una nota sobre Adam Smith,

Ulloa y la economa de Buenos Aires, Revista de Historia Econmica , ao I, n 1, (1984),

161-167.

2 Sheila Hopkins & H. Phelps Brown, Builders Wage-Rates, Prices and Population: Some

Further Evidences, Economica, News Series, vol. 23, no. 92 (1956), 296-314.

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progressive rise in the labour costs, in terms of agricultural goods. Earl Hamiltons work on

prices in Spain between 1500 and 1800 also describes the evolution of the relationship

between the values of products differing in factor composition: during the 16th century,

agricultural goods showed a continuous increase in value in relation to non-agricultural. This

changed during the first half of the 17th century, presumably due to population decline in

Spain. The aforesaid tendency was reinitiated in the second half of the 17th century and was

continued until the 1800s3.

The most extraordinary historical case of change in the labour endowment was caused

by the fall of the American indigenous population after the arrival of the Europeans. It is

estimated that the decrease was 90% in Mexico and 50% in the Andes4. The economic

repercussions of this change have been pointed out repeatedly, although there are no specific

studies of the impact on the local terms of trade. Unfortunately, given the absence of price

series the analysis is difficult to apply to the 16th century. On the other hand, prices are

available for the 17th and 18th century. This essay analyzes the evolution of prices and relative

prices in the Espacio Peruano Region (defined here as present-day Peru, Bolivia and Chile)

between 1591 and 1790. After describing the price series used, the evolution of relative

prices is described highlighting their relationship with population trends and climatic and

epidemics catastrophes. Regional differences are also mentioned. Subsequently, the evolution

of general price levels is reconstructed, and contrasted with the fragmentary information

available on wages. The essay concludes with some hypothesis on the evolution of

3 Earl Hamilton, American Treasure and the Price Revolution in Spain, 1501-1650 ,

(Cambridge, 1934); Earl Hamilton,War and Prices in Spain, 1651-1800 , (Cambridge, 1947).

4 Nicols Snchez Albornoz, La poblacin de Amrica Latina, (Madrid, 1994).

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productivity.

Studying the changes in relative prices is especially pertinent for the Andean zone,

given the lack of general and accurate information regarding the magnitude of population

variations before the end of the 18th century. Studies on the demographic evolution of the

Espacio Peruano in the colonial period show some agreement on what happened in the 16

and 18th centuries. For the century after the conquest, there is unanimous evidence about that

the population dropped dramatically and it is no surprise that the discussions are centrered on

the magnitude of the size and extent of the demographic collapse. With respect to the 18th

century, there is a notable scholarly agreement on a rapid demographic recovery, especially

after the epidemic that devastated the region between 1715 and 17205. The great doubts about

the demographic evolution of Peru during the 17th century are caused by a lack of reliable

censuses6. This has led some scholars to attempt a patient reconstruction of demographic

evolution on the basis of the parochial registers of some districts7. These studies suggest that

the fall of the population initiated with the conquest ceased around 1650. The studies also

confirm population growth throughout the 18th century.

Since boom of quantitative economic history, beginning in the 1960s, many studies

have appeared focusing on price evolution in the Espacio Peruano . Two debates can be

5 Angl Rosenblat, La poblacin indgena de Amrica (Buenos Aires, 1945). Jorge Pinto

Rodriguez, Poblacin de Chile en el siglo XVIII (La Serena, 1981).

6 David Cook, Population Data for Indian Peru: Sixteenth and Seventeenth Centuries,The

Hispanic American Historical Review , vol. 62, no. 1 (1982), 73-120.

7 Enrique Tandeter & Mario Boleda, Poblaciones Andinas (Buenos Aires, 2004).

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marked around this topic, one, about the different evolution of prices of local, regional and

international origin8. The second debate is on the long run evolution of prices. It was

Ruggiero Romano, who initiated this debate by proposing that in the 17th century, prices in

South America tended to rise. The opposite occurred in the 18th century, with prices showing

a downward trend.9. Lyman Johnson discussed Romanos thesis based on his work on

Buenos Aires prices. Tandeter and Johnson, in their Colonial Economies have published

various price series10. Chilean prices were studied by Jos of Ramn and Armando Larran, as

part of a profound study of the Chilean colonial economy11. The prices in Alto Peru were a

gap in thorough colonial economic history, until Tandeter and Wachtel published their work

on Potos, analyzing various products of local and international origin.12. The first important

8 Herbert Klein & Stanley Engerman, Stanley, Mtodos y Significados en la Historia de

Precios, in Enrique Tandeter & Lyman Johnson (ed.), Economas Coloniales. Precios y

Salarios en Amrica Latina, siglo XVIII (Buenos Aires, 1992).

9 Ruggiero Romano, Consideraciones acerca de la Historia de Precios, in Enrique Tandeter

& Lyman Johnson, Economas Coloniales. Precios y Salarios en Amrica Latina, siglo XVIII

(Buenos Aires, 1992).

10 Enrique Tandeter & Lyman Johnson, Economas Coloniales. Precios y Salarios en

Amrica Latina, siglo XVIII (Buenos Aires, 1992).

11 Jos de Ramn & Armando Larran,Orgenes de la vida econmica chilena (Santiago de

Chile, 1999).

12 Enrique Tandeter & Nathan Wachtel, Precios y produccin agraria. Potos y Charcas en el

siglo XVIII, in Enrique Tandeter & Lyman Johnson (ed.), Economas Coloniales. Precios y

Salarios en Amrica Latina, siglo XVIII (Buenos Aires, 1992).

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data collection of prices in Bajo Per, was carried out by Pablo Macera, who published three

volumes prices of a large quantity of products in various rural and urban districts13. Later,

Kendall Brown published an analysis of prices in the city of Arequipa, concluding that the

cost of living of natives descended during the 18th century14.

The present study develops new price indexes and relative price series by using most

of the series mentioned above. Price data are taken from Macera15 on Lima (Lower Peru);

from Ramn and Larran16 on Santiago de Chile; and from Tandeter and Wachtel17 for Potos

(Upper Peru). These sources and their reliability have been subject to a lively debate18. In this

13 Pablo Macera, Los precios del Per. Siglos XVI-XIX, Banco Central de Reserva del Per,

(Lima, 1992).

14 Kendall Brown, Movimientos de precios en Arequipa, Per, en el siglo XVIII, in Enrique

Tandeter & Lyman Johnson (ed.), Economas Coloniales. Precios y Salarios en Amrica

Latina, siglo XVIII (Buenos Aires, 1992).

15 Pablo Macera, Los precios del Per. Siglos XVI-XIX, Banco Central de Reserva del Per,

(Lima, 1992).

16 Jos Larran, Producto y precios. El caso chileno en los siglos XVII y XVIII, in Enrique

Tandeter & Lyman Johnson (ed), Economas coloniales. Precios y salarios en Amrica

Latina en el siglo XVIII (Buenos Aires, 1992), 119-152.

17 Enrique Tandeter & Nathan Wachtel, Precios y produccin agraria en Charcas en el siglo

XVIII, in Enrique Tandeter & Lyman Johnson (ed), Economas coloniales. Precios y

salarios en Amrica Latina en el siglo XVIII (Buenos Aires, 1992), 221-301.

18 Johnson, L. y Ruggiero Romano, "Una polmica sobre la historia de precios en el Buenos

Aires virreinal, Boletn del Instituto de Historia Argentina y Americana "Dr. Emilio

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respect, there is a consensus that the best sources are those of ecclesiastical origin. These

sources meet two important requirements. Firstly, the registrations had various controls that

assure that the data is correct and reliable. Secondly, because of the characteristics of these

organizations, the sources contain data covering extensive periods. Values are generally

market prices of products. The series consist of retail prices originating from the registration

books of convents, hospitals and haciendas.

Price index components are divided into two categories: agricultural and textile.

Agricultural products are considered land intensive, whereas textile products are considered

labour intensive. The products selected to establish the agricultural index for Lima (1591 to

1790) are corn, wheat, and potatoes. The textile index was constructed using the prices of

tocuyo (a cotton textile) and sayal (a wool textile). For Potos (1671 to 1790) wheat and

potatoes are used as agricultural products. The textile goods aretocuyo , sayal and sayalete

(wool textiles). For Santiago de Chile (1691 to 1790), wheat, potato and local textile prices

were used.

For some years the data on some products is lacking. When missing data correspond

to two or more consecutive years, they have been filled in accordance with the linear trend of

the series. Agricultural and textile price indexes were obtained with the simple average of

partial indexes for all products in each group. In the case of General Price Index for the

Espacio Peruano , each regions weight was determined according to its share in production

for the 1741-175019 decade. Production in this decade was estimated, by Newland using fiscal

Ravignani" , Tercera Serie, no. 6 (1992).

19 These weights are 8.2% for Chile , 38.22% for Alto Per and 53.58% for Bajo Per .

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sources, taking into account agricultural and mining aggregate output20. The Espacio

Peruano relative price index is the result of the quotient between the agricultural and textile

index.

The 1591-1600 decade is taken as a base for the relative price series and the general

price index, while the 1671-1680 decade is used a base for the wage index.

In general, the evolution of relative prices for the Espacio Peruano corresponds to the

images presented by demographic historiography. In Figure A, the evolution of land-

intensive versus labour-intensive price indexes since the late 16th century can be observed. It

should be pointed out that the index falls until mid-17th century, which corresponds to the

common view that the population continued its downfall from its high initial numbers due to

diseases and ill-treatment21. During these decades, labour was consistently scarce.

The impact of demographic decline on agriculture was significant. Marginal land was

abandoned in order to focus production on more productive land. On an institutional level,

the Spanish Crown applied a policy of spatial reorganization until 1570, forcing natives to

concentrate inreducciones . At the same time it established forced labour (mita ) and tribute

cash payments. The concentration of the occupied space left vast territories unused22. On the

20 Carlos Newland, Evolucin macroeconmica del Espacio peruano, 1680-1800,

Economa, vol. 20, no. 49 (2002), 63-84.

21 Snchez Albornoz, La poblacin de Amrica Latina.

22 Ward Stavig, Ambiguous Visions: Nature, Law and Culture in Indigenous- Spanish Land

Relations in colonial Per, Hispanic American Historical Review , 80:1(February 2000), 77-

101.

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other hand, natives saw themselves in the need to sell their land in order to pay the tribute.

The scarcity of Labour led to the downfall of relative prices for land intensive products. In

Lower Peru (current Peru), the demographic collapse of the 16th century led to the

abandonment of marginal land23. For some regions, like Trujillo, the demographic impact of

the Conquest was so strong that, in the 16th century, land was sold on the value of the cattle

grazing on it24. Facing this situation, Spaniards occupied any available land25. A vast part of

land transfer to Spaniards took place in the 16th and 17th centuries26. In the first half of the 17th

century, due to the continued decrease in population, the lack of manpower became acute.

For this reason wages might even have doubled27. Natives would abandon agricultural firms

where labour conditions were abusive28. This drove landowners to compete for available

manpower, as has been stated in judiciary files29. At the same time, land was abandoned for

23 Paul Charney, Indian Society in the Valley of Lima, 1532-1824 (University Press of

America, 1999).

24 Susan Ramrez, Patriarcas provinciales, (Madrid, 1986), p 223.

25 Charney, Indian Society in the Valley of Lima, 1532-1824 , 44-45.

26 Stavig, Ambiguous Visions: Nature, Law and Culture in Indigenous- Spanish Land

Relations in colonial Per, 111. Land appropriation during the 16th and 17th centuries can

be observed in other regions, for example Cuzco (Glave and Remy, 1983; 87-89).

27 Ramrez, Patriarcas provinciales , 130-131.

28 Miriam Salas de Coloma, Estructura colonial del poder espaol en el Per Huamanga

(Ayacucho) a travs de sus obrajes, siglos XVI-XVIII (Lima, 1998), 466-467.

29 National Archive and Library of Bolivia (Archivo y Biblioteca Nacional de Bolivia -

ABNB), EC, 1656, 1. See also: EC, 1659, 7; EC, 1661, 8; EC 1664, 4; EC, 1665, 10; AM,

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lack of manpower 30. In Chile, until mid 17th century land was abandoned due to a shortage of

population. This explains why natives received higher salaries than those stipulated by

official regulations31.

Figure A supports the idea that population decline halted in mid 17th century, as has

been suggested by demographic historiography32. This situation, reflected in the growth of

agricultural versus textile prices, continues until the 18th century. Demographic growth

increased the available labour supply. Prices of labour intensive products (textiles) descended

on a greater scale than those land intensive (agricultural), leading to an increase of the

relative price index. The rise of agricultural prices and population in the 18th century -in a

context of scarce technological change-, put pressure upon available land. Since 1750 land

became scarcer. Proof can be found in the increase of indigenous demands petitioning for

sold or formerly abandoned lands33. Due to the shortage of land, these demands turned violent

1611, 1; AM, 1612, 9; AM, 1616, 3, among others.

30 Ramrez, Patriarcas provinciales, 167.

31 Mario Gongora,Origen de los inquilinos de Chile central, (Santiago de Chile, 1960), 39,

67.

32 Enrique Tandeter, Poblacin y economa en los Andes. Siglo XVIII, Revista Andina , ao

13, no. 1 (Lima, 1995).

33 Stavig, Ambiguous Visions: Nature, Law and Culture in Indigenous- Spanish Land

Relations in colonial Per. In these conflicts, many times the request would be originated on

land lost in the past century. One of these cases can be observed in the first half of the 18th

century, in: ABNB, EC, 1741, 93.

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in Upper and Lower Peru34. In other regions, like Piura (north of Lower Peru), an expansion

of the agricultural frontier was attempted, recovering land abandoned in the 17th century and

incorporating new land35.

Two catastrophes altered this gradual tendency. The first was the earthquake that

affected the region of Lima in 1689, producing a collapse in land productivity. Consequently

an increase in the price of agricultural goods ensued. The city of Lima saw itself increasingly

dependent on wheat imports from Chile; causing a rise of agricultural prices on the Chilean

market. The second catastrophe was the severe plague devastating Upper and Lower Peru

between 1717 and 1723. Hence the decrease of the relative price index for the decade of

1721-1730. Since 1731, the index rises, a clear sign of the continuous growth in population.

In the last decade the index drops, perhaps due to the casualties caused by Tupac Amarus

Great Rebellion.

Differences in the evolution of land and labour for each region can be observed in

Figure B. Since 1690 in Chile the relative agricultural/textile relative price increased thanks

to Peruvian demand. The cost of land lease, once insignificant, took on a new importance. As

a result, new farming land was incorporated until 1750. The supply sought a new balance

with the expanded demand, peaking towards the middle of the 18th century. Interruptions in

this process can only be observed in the 1720s, due to natural catastrophes36.


35 Alejandro Diez Hurtado, Tierras y comunes de indios a fines de la colonia, in Scarlett

Godoy OPhelan (comp.), El Per en el siglo XVII. La era borbnica. (Lima, 1999), 291.

36 See Gongora,Origen de los inquilinos de Chile central, 74. Larran, Producto y precios.

El caso chileno en los siglos XVII y XVIII, 103-07, 227 and 283-89. And Sergio

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For Lower Peru, the end of demographic decline can be confirmed for the second half

of the 17th century. With the rise in population, the labour supply grew, and consequently the

relative price index increased. The 1691-1700 peak can be explained by the agricultural crisis

of 1689. Also in Upper Peru, a recovery in population is observed, beginning in the late 17th

century and ending in 1719-1720 as a result of the plague37. The plague made an impact later

on in Lower Peru, also causing a temporary change in the index.

A general price index was built averaging the agricultural and textile price series

(Figure C). The general price level shows certain stability throughout the 17th century. To a

large extent, this is due because the rise in textile prices starting after 1600- was

compensated by a decline in agricultural prices. Agricultural and textile price levels converge

again towards 1700. In the last decade of the 17th century the price level strongly rises due to

the increase in agricultural prices provoked by the earthquake that affected Lima in 1689. The

price level returns to its previous level towards 1710. For the remaining 18th century a

continued deflation is observed, caused by dropping textile prices.

Available estimates show production growth for the 18th century. In Upper Peru

production rose steadily since 173038. In Chile, Ramon and Larran39 observe a rise in

Villalobos et al, Historia de Chile , Tomo 2, (Santiago de Chile, 1980), 229.

37 Broke Larson,Cochabamba, 1550-1900, (Duke University Press, 1998) , 98.

38 Enrique Tandeter & Nathan Wachtel, Precios y produccin agraria en Charcas en el siglo

XVIII.

39 Armando Ramn & Jos Larran,Orgenes de la vida econmica chilena 1659-1808

(Santiago de Chile, 1982).

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production from the late 17th century on. Larson40 suggests the probability that towards 1740

demographic and productive growth took the region out of recession. Newland41 and

Newland and Coatsworth42, providing general estimates of production for the region also note

the same increase. That is to say, deflation in the 18th century was accompanied by a growth

in production. One possible explanation is that this occurred as a result of an increase in

economic productivity. This hypothesis is underpinned by the analysis of real wages.

Normally, rising real wages are a clear sign of increased productivity in the economy,

at least when population is growing at the same time. With available but fragmentary

information on wages (for Lima, Chile, Potosi, Trujillo and Arequipa) a nominal wage series

for the Espacio Peruano Region was elaborated (Table 1). The contrast between nominal

wages and the evolution of prices allows us to estimate real wages.

The data shows that in the 18th century nominal wages grew around 4 to 7%. At the

same time prices were falling, which resulted in a real wage increase. The index shows a

clear improvement throughout the 18th century, which is particularly notable since it took

place in a time of population growth. Once again, the most plausible explanation is an

increase in general productivity. This increase could be the result of a reduction in

institutional limitations to trade and production. Feudal-like mechanisms that implied

working under coercion (mita , forced labour inobrajes , encomiendas ) became less dominant

40 Larson,Cochabamba, 1550-1900.

41 Newland, Evolucin macroeconmica del Espacio peruano, 1680-1800.

42 Carlos Newland & John Coastworth, Crecimiento econmico en el Espacio peruano,

1680-1800, Revista de Historia Econmica, vol. 18, no. 2 (2000), 277-393.

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throughout the 18th century43. These inefficient forms of labour changed towards free forms of

labour employment, or towards production on the basis of indigenous entrepreneurship44.

This led to an overall improvement in labour productivity. The following is an analysis on

some of the changes observed by region.

With the help of a tax rate reduction and the shift to employing free labour, mining

production on the Espacio Peruano increased significantly during the 18th century. The

participation of forced labour (mita ) in the total mining labour force was reduced. Forced

labour was mainly located in Potosi and Huancavelica; even there towards 1789 three

quarters of total mining labour became salaried. Hired labour increased in Potosi45 and the

43 This does not contradict existing historiography onrepartimientos de mercancas as the

institution reached its momentum between 1750 and 1782, when it was abolished (for

example: Moreno Cebrin, El corregidor de indios y el reparto forzoso de mercancas ,

(Madrid, 1977) and Jrgen Glte, Repartos y rebeliones , (IEP, 1980)). Neither does it

contradict specific research on themita (for example: Enrique Tandeter,Coaccin y

Mercado. La minera de la plata en el Potos Colonial , (Siglo XXI, 2002)), since the impact

of themita was relevant in few regions.

44 The Peruvian case contrasts with the Mexican case, where all through the 18th century

population growth seems to have had a negative effect on the standard of living. See David

Reher, Malthus de nuevo? Poblacin y economa en Mxico durante el siglo XVIII, in

Historia Mexicana, XLI:4, abril-junio, (Mexico, 2002), 615-664.

45 Peter Bakewell, La minera en Hispanoamrica colonial, in Leslie Bethell (ed.), Historia

de Amrica Latina, tomo 3 (Barcelona, 1990), 70.

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amount of forced labour seems to have dropped during the 18th century46. By some

indications, there was a decrease in the contribution of indigenous population to the Potos

mita ; this was compensated by salaried miners47. Also, Potosis production lost its overall

importance for the area, since mines employing free labour, like Oruro, Charangas, Chucuito,

Pasco and Huaylayoc, were growing faster 48. By the end of the 18th century in Lower Peru, in

the region of Jauja (Huancavelica), a large portion of mining labourers were free. In mining

centres like Pasco the entire labour force was free49.

For much of the colonial period, textile production developed mainly inobrajes ,

medium size or large workshops of either Creole or Spanish property. Most of the production

process (from the cleaning of fibres to the weaving of the fabric) took placed here. Usually

these employed both forced labour and minimum wage labour. During the first half of the

18th century,obrajes reduced the size of forced labour. For example, in the Cacamarcaobraje

towards 1730 many workers were salaried50. Some workshops would even raise wages in

46 Silvio Zabala, El servicio personal de indios en el Per (extractos del siglo XVIII) ,

(Mxico, 1980).

47 Eduardo Saguier, La penuria del agua, azogue y mano de obra en el origen de la crisis

minera colonial. El caso de Potos a fines del siglo XVIII, en HISLA, no. 12, (1989), 69-83.

48 John Fisher, Estado y minera en el Per borbnico, in Carlos Contreras & Manuel

Glave, Estados y mercado en la historia del Per, (Lima, 2002), 132-45.

49 Albert Meyers, La situacin econmica en la comunidades en la Sierra Central a fines de

la poca colonial, in Jacobsen & Pule (comp.),The economies of Mxico and Per during

the Late Colonial Period 1760-1810, (Berln, 1986), 101.

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order to keep their workers51. In the second half of the century, indigenous domestic

production (chorrillos ) competed withobrajes , resulting in a general price fall52. Towards the

end of the 18th century, manyobrajes had vanished53. According to a contemporary traveler,

Concolorcorvo54, chorrillos were the cause of theobraje crisis and the drop in prices. Several

studies show thatchorrillos thrived in Upper Peru in the late 18th, in regions like Cuzco55 or

Cochabamba56. The production in obrajes fell, but was compensated by the increase in

chorrillo quantity and production57. The same process can be observed in Huamanga, where,

50

Salas de Coloma, Estructura colonial del poder espaol en el Per Huamanga (Ayacucho)a travs de sus obrajes, siglos XVI-XVIII, 394.

51 Salas de Coloma, Estructura colonial, 339, 468.

52 A chorrillo was a small workshop with no fulling mill, commonly set up by natives, with

no more than six looms.Chorrillo workers were usually members of a family, () basically

an exponent of domestic industry. Fernando Silva Santisteban, Los obrajes en el Virreinato

del Per , (Lima, 1964), 33.

53 Pablo Macera & Felipe Abanto,Informaciones geogrficas del Per colonial, (Lima,

1964), 100, 114.

54 Concolorcorvo, El lazarillo de ciegos caminates desde Buenos Aires hasta Lima, 1773,

(Buenos Aires, 1942).

55 Magnus Morner, Perfil de la sociedad rural del Cuzco a fines de la colonia, (Lima, 1978),

84.

56 Larson,Cochabamba, 1550-1900.

57 Neus Escandel-Tur, Produccin y comercio de tejidos coloniales. Los obrajes y chorrillos

del Cuzco, 1750-1820, (Cuzco, 1997).

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towards the end of the 18th century, the manufacture of sayal and cordellate moved from

obrajes to indigenous households58. In Chile domestic production (mostly flannel), imposed

itself over the production inobrajes , causing their decline in the 18th century59. High labour

mobility was yet another dynamic factor. In Upper Peru, during the second half of the 18th

century, Indian labourers would move fromobraje to obraje 60. Some provinces, like

Cochabamba, seem to have particularly benefited with the arrival of workers from other

regions61.

Agricultural production grew strongly in the 18th century62, thanks in part to the rise in

hacienda-based production, but also to the increase of indigenous production. In Lower Peru

small sugar mill production caused a drop in the price of sugar 63. In these mills, sugar cane

was cultivated and processed, generating complaints by landowners and tradesmen on

account of growing competition64. Also haciendas and refineries started employing non-

58 Miriam Salas, Los obrajes huamanginos y sus interconexciones con otros sectores

econmicos en el centro-sur peruano a fines del siglo XVIII, in Jacobsen & Pule (comp.),

The economies of Mxico and Per during the Late Colonial Period 1760-1810, (Berln,

1986), 213.

59 Villalobos et al, Historia de Chile , 173.

60 Ward Stavig,The World of Tupac Amaru , (Nebraska, 1999), 144-53. In the 18th century,

the majority of textileobrajes workers were not of local origins (Stavig, 2000).

61 Larson,Cochabamba, 1550-1900, 100-01.

62 Newland & John Coastworth, Crecimiento econmico en el Espacio peruano, 1680-1800.


64 Macera & Felipe Abanto,Informaciones geogrficas del Per colonial, 42.

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forced labour on a larger scale. For example, in Trujillo (Lower Peru), landowners had to

seduce free workers with salaries and additional in order to obtain labour. There is also

evidence that Lower Perus refineries employed free labour on a larger proportion than forced

labour 65. The same situation is seen in the region of Cuzco, where the quantity of salaried

workers rose throughout the 18th century, possibly thanks to a decrease in local forced

labour 66. In Chile we come across a particular case: the wheat exporting boom to Peru in the

18th century increased agricultural development. The growth in agricultural production took

place through wage labour. Encomienda andmita were of no significance67.

These examples of types of labour used in the 18th century are consistent with the

general view. In cities, such as Arequipa, free labour was predominant68. For the area of

Chile, it seems that free labour was already pivotal in the 17th century, whereas indigenous

forced labour was losing its significance69.

Bourbon legislative change led to the liberalization of labour. Even if themita system

continued in some regions (like Potosi), in other areas it was permanently abolished by

172070. We can also verify a strong political tendency towards the ceasing of forced

65 Ramrez, Patriarcas provinciales, 180, 296.

66 Luis Glave y Mara Remy, Estructura agraria y vida rural en una regin andina.

Ollantaytambo entre los siglos XVI y XIX , (Cuzco, 1983), 357.

67 Villalobos et al, Historia de Chile , 223, 236-39.

68 Luis Millones, Los ganados del seor, Historia y Cutura, vol. 11, (1978), 21.

69 Villalobos et al, Historia de Chile , 167.

70 In Lower Peru (Ramirez, 1986; 181) as in Chile (Gongora, 1960; 68).

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indigenous labour in textileobrajes andhaciendas 71. This can be traced back as early as 1679

in the region of Chile, where King Philip IV ruled against indigenous forced labour, and

established free labour, with wages calculated upon the cost of living72.

The evolution of relative prices in the Espacio Peruano confirms the hypothesis

developed by historical demography. The series indicate that throughout the 16th century and

in the first half of the 17th century the population kept falling, leading to a price increase for

labour intensive products in relation to agricultural ones. The opposite is observed in the 18th

century, confirming evidence of a substantial growth in population. Catastrophes, like the

1689 earthquake in Lima, and the plague that devastated the whole region in the 1720s,

affected relative prices as expected. On a regional level, the fluctuations of relative prices

were diverse. Upper and Lower Peru share similar trends, whereas Chile shows differences,

especially after 1690.

The general price level for the Espacio Peruano remains stable in the 17th century,

falling in the 18th century. The price decrease coexists with an increase in production73. Along

71 Like the 1704 Real Cdula ordering the cease of forced labour use inobrajes in the

Viceroyalty of Peru. Silvio Zabala, Silvio (1980): El servicio personal de indios en el Per

(extractos del siglo XVIII) , (Mxico, 1980), 4.

72 Prieto, Jara, lvaro y Sonia Prieto, Fuentes para la historia del trabajo en Chile ,

(Santiago, 1965), 335.

73 The price trends are consistent with Romanos observations on price stagnation in the 17th

century and price decreases in the 18th century (Ruggiero Romano,Coyunturas opuestas: la

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with wage evolution, this implies a rise in productivity during the 18th century. This was

caused presumably by a more efficient use of productive factors. The increase in productivity

favoured workers, due to the raises in real wages. On the other hand it benefited the colonial

State, which drained part of the income through a raise in taxation74.

crisis del siglo XVII en Europa e Hispanoamrica , (Mxico, 1993)). But it does not follow his

assumption that they have opposite behaviour in relation to Europe, in terms of relative

prices. Spanish and America relative prices display the same trend in the 18th century.

74 Carlos Newland & Martn Cuesta, Revueltas y presin fiscal en el espacio peruano, 1691-

1790, Revista Historia Econmica , ao XXI, no. 3 (Madrid, 2003).

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Figure A: General Price Index and Relative Prices (agricultural/textile) for the Espacio Peruano , 1591-1790 (base 100 and 125 = 1591-1600)

General Price Index and Relative Prices (agricultural/textile) in

the Espacio Peruano Region, 1591-1790 (base 100 and 125 =1591-1600)

025

50

75

100

125

150

175

1591-

1600

1601-

10

1611-

20

1621-

30

1631-

40

1641-

50

1651-

60

1661-

70

1671-

80

1681-

90

1691-

1700

1701-

10

1711-

20

1721-

30

1731-

40

1741-

50

1751-

60

1761-

70

1771-

80

1781-

90

decade

i n d e x

Relative Prices

General Price Index

Sources: Elaborated with price data included in: Pablo Macera, Los precios del Per. Siglos XVI-XIX, BancoCentral de Reserva del Per, (Lima, 1992); Jos de Ramn & Armando Larran,Orgenes de la vidaeconmica chilena (Santiago de Chile, 1999); and Enrique Tandeter & Nathan Wachtel, Precios y produccin agraria en Charcas en el siglo XVIII, in Enrique Tandeter & Lyman Johnson (ed), Economascoloniales. Precios y salarios en Amrica Latina en el siglo XVIII (Buenos Aires, 1992) pp. 221-301.

Figure B: Relative prices by region in the Espacio Peruano , 1591-1790 (base 100= 1671-1680)

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Relative Prices (agricultural / textile) by r egion in the EspacioPeruano Region , 1591-1790 (base 100 = 1671-1680)

0

25

50

75

100

125

150

175

200

225

1591-

1600

1601-10 1611-20 1621-30 1631-40 1641-50 1651-601661-70 1671-80 1681-90 1691-

1700

1701-10 1711-201721-30 1731-40 1741-50 1751-60 1761-70 1771-80 1781-90

decade

i n d e x

Lima

Potos

Santiago

Sources: see Figure A.

Figure C: General, agricultural and textile price indexes for the Espacio Peruano , 1591-1790(base 100= 1591-1600)

Source: see Figure A.

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General, Agricultural and Textile price indexes for theEspacio Peruano Region, 1591-1790 (base 100 = 1591-1600)

0

25

50

75

100

125

150

1591-1600

1601-10

1611-20

1621-30

1631-40

1641-50

1651-60

1661-70

1671-80

1681-90

1691-1700

1701-10

1711-20

1721-30

1731-40

1741-50

1751-60

1761-70

1771-80

1781-90

decade

i n d e

Textile AgriculturalGeneral


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Table 1: Prices and wages (nominal and real) for the Espacio Peruano , 1701-1790. Base=100, decade 1701-1710.

Sources: Lima: Pablo Macera, Los precios del Per. Siglos XVI-XIX, Banco Central de Reserva del Per,(Lima, 1992), p. xxiv; Chile: Marcelo Carmagnani, El salariado minero colonial , (Santiago,1963) pp. 81-83;Potos: Enrique Tandeter & Nathan Wachtel, Precios y produccin agraria en Charcas en el siglo XVIII, inEnrique Tandeter & Lyman Johnson (ed), Economas coloniales. Precios y salarios en Amrica Latina en el

siglo XVIII (Buenos Aires, 1992) pp. 299-301; Trujillo: Susan Ramirez, Patriarcas provinciales , (Madrid,1986), pp 240; Arequipa: Kendall Brown, Bourbons and Brandy , (Albuquerque, 1986) p. 48. Wages for Lower Peru were calculated based on wages in Trujillo, Arequipa and Lima. Weights are those used for theconstruction of the general price index.

Decade Nominal Wages Prices Real Wages1701-10 100 100 100

1711-20 99 82 1221721-30 107 79 136

1731-60 104 75 138

1761-70 104 69 150

1771-80 104 70 149

1781-90 106 67 159

Prices, Wages and Economic Change. The Espacio Peruano Region, 1591-1790. por Eduardo Martín...

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Transcript of Prices, Wages and Economic Change. The Espacio Peruano Region, 1591-1790. por Eduardo Martín...