Prices, Wages and Economic Change. The Espacio Peruano Region, 1591-1790. Artículo publicado en Anuario de Estudios Bolivianos, Archivísticos y Biliográficos Nº 16 (2010), pp. 311-325. Difundido con autorización de los editores. Eduardo Martín Cuesta, Ireneo Moras and Carlos Newland Abstract: In this paper price series for the Espacio Peruano Region (today’s Bolivia, Chile and Peru) are elaborated covering the period 1591-1790. An index of relative prices is constructed that compares land intensive versus labour intensive products. These series allow testing (and confirming) the traditional vision presented by demographic historians, based on qualitative 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 important increase 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 Económico. El Espacio Peruano, 1591-1790. Eduardo Martín Cuesta, Ireneo Moras y Carlos Newland Resumen: En este trabajo se elaboran series de precios correspondientes al Espacio Peruano (actuales Bolivia, Perú y Chile) que cubren el periodo 1591-1790. Con las series se elaboran índices de precios relativos de productos tierra intensivos respecto de precios de productos mano de obra intensivos. Dichas series posibilitan el testeo y corroboración de las afirmaciones tradicionales sobre historia demográfica de la región, que han sido más bien de índole cualitativa ya que no se poseen censos poblacionales comparables antes del siglo XVIII. Las series de precios elaboradas junto con información sobre salarios nominales durante el siglo XVIII, permiten concluir un proceso de aumento de la productividad que contrarrestó posibles tendencias malthusianas. Se especula que este aumento de la productividad se debió a una liberalización de la economía, en especial de la mano de obra indígena.


Prices, Wages and Economic Change. The Espacio Peruano Region, 15911790 Eduardo Martín 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.

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

Ulloa y la economía de Buenos Aires”, Revista de Historia Económica, año I, nº 1, (1984), 161-167.

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

Further Evidences”, Economica, News Series, vol. 23, no. 92 (1956), 296-314. 3

progressive rise in the labour costs, in terms of agricultural goods. Earl Hamilton’s 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 1800’s3. 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


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).

Nicolás Sánchez Albornoz, La población de América Latina, (Madrid, 1994). 4

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 1960´s, many studies have appeared focusing on price evolution in the Espacio Peruano. Two debates can be


Angél Rosenblat, La población indígena de América (Buenos Aires, 1945). Jorge Pinto

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

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

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

Enrique Tandeter & Mario Boleda, Poblaciones Andinas (Buenos Aires, 2004). 5

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 17 th century, prices in South America tended to rise. The opposite occurred in the 18 th century, with prices showing a downward trend.9. Lyman Johnson discussed Romano’s 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 José of Ramón and Armando Larraín, 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 Potosí, analyzing various products of local and international origin.12. The first important


Herbert Klein & Stanley Engerman, Stanley, “Métodos y Significados en la Historia de

Precios”, in Enrique Tandeter & Lyman Johnson (ed.), Economías Coloniales. Precios y Salarios en América Latina, siglo XVIII (Buenos Aires, 1992).

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

& Lyman Johnson, Economías Coloniales. Precios y Salarios en América Latina, siglo XVIII (Buenos Aires, 1992).

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

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

José de Ramón & Armando Larraín, Orígenes de la vida económica chilena (Santiago de

Chile, 1999).

Enrique Tandeter & Nathan Wachtel, “Precios y producción agraria. Potosí y Charcas en el

siglo XVIII”, in Enrique Tandeter & Lyman Johnson (ed.), Economías Coloniales. Precios y Salarios en América Latina, siglo XVIII (Buenos Aires, 1992). 6

data collection of prices in Bajo Perú, 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 Macera 15 on Lima (Lower Peru); from Ramón and Larraín16 on Santiago de Chile; and from Tandeter and Wachtel17 for Potosí (Upper Peru). These sources and their reliability have been subject to a lively debate18. In this


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

(Lima, 1992).

Kendall Brown, “Movimientos de precios en Arequipa, Perú, en el siglo XVIII”, in Enrique

Tandeter & Lyman Johnson (ed.), Economías Coloniales. Precios y Salarios en América Latina, siglo XVIII (Buenos Aires, 1992).

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

(Lima, 1992).

José Larraín, “Producto y precios. El caso chileno en los siglos XVII y XVIII”, in Enrique

Tandeter & Lyman Johnson (ed), Economías coloniales. Precios y salarios en América Latina en el siglo XVIII (Buenos Aires, 1992), 119-152.

Enrique Tandeter & Nathan Wachtel, “Precios y producción agraria en Charcas en el siglo

XVIII”, in Enrique Tandeter & Lyman Johnson (ed), Economías coloniales. Precios y salarios en América Latina en el siglo XVIII (Buenos Aires, 1992), 221-301.

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

Aires virreinal”, Boletín del Instituto de Historia Argentina y Americana "Dr. Emilio 7

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 Potosí (1671 to 1790) wheat and potatoes are used as agricultural products. The textile goods are tocuyo, 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 region’s 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).

These weights are 8.2% for Chile, 38.22% for Alto Perú and 53.58% for Bajo Perú. 8

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 landintensive 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 in reducciones. At the same time it established forced labour (mita) and tribute cash payments. The concentration of the occupied space left vast territories unused 22. On the


Carlos Newland, “Evolución macroeconómica del Espacio peruano, 1680-1800”,

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

Sánchez Albornoz, La población de América Latina. Ward Stavig, “Ambiguous Visions: Nature, Law and Culture in Indigenous- Spanish Land


Relations in colonial Perú”, Hispanic American Historical Review, 80:1(February 2000), 77101. 9

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


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

America, 1999).

Susan Ramírez, Patriarcas provinciales, (Madrid, 1986), p 223. Charney, Indian Society in the Valley of Lima, 1532-1824, 44-45. Stavig, “Ambiguous Visions: Nature, Law and Culture in Indigenous- Spanish Land



Relations in colonial Perú”, 111. Land appropriation during the 16th and 17th centuries can be observed in other regions, for example Cuzco (Glave and Remy, 1983; 87-89).

Ramírez, Patriarcas provinciales, 130-131. Miriam Salas de Coloma, Estructura colonial del poder español en el Perú Huamanga


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

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, 10

lack of manpower30. 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.

Ramírez, Patriarcas provinciales, 167. Mario Gongora, Origen de los inquilinos de Chile central, (Santiago de Chile, 1960), 39,



Enrique Tandeter, “Población y economía en los Andes. Siglo XVIII”, Revista Andina, año

13, no. 1 (Lima, 1995).

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

Relations in colonial Perú”. 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 18 th century, in: ABNB, EC, 1741, 93. 11

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 Amaru’s 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 1720´s, due to natural catastrophes36.


Ramírez, Patriarcas provinciales, 303. Alejandro Diez Hurtado, “Tierras y comunes de indios a fines de la colonia”, in Scarlett


Godoy O´Phelan (comp.), El Perú en el siglo XVII. La era borbónica. (Lima, 1999), 291.

See Gongora, Origen de los inquilinos de Chile central, 74. Larraín, “Producto y precios. siglos XVII y XVIII”, 103-07, 227 and 283-89. And Sergio 12

El caso chileno en los

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 Larraín39 observe a rise in

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

Broke Larson, Cochabamba, 1550-1900, (Duke University Press, 1998), 98. Enrique Tandeter & Nathan Wachtel, “Precios y producción agraria en Charcas en el siglo



Armando Ramón & José Larraín, Orígenes de la vida económica chilena 1659-1808

(Santiago de Chile, 1982). 13

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 in obrajes, encomiendas) became less dominant


Larson, Cochabamba, 1550-1900. Newland, “Evolución macroeconómica del Espacio peruano, 1680-1800”. Carlos Newland & John Coastworth, “Crecimiento económico en el Espacio peruano,



1680-1800”, Revista de Historia Económica, vol. 18, no. 2 (2000), 277-393. 14

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


This does not contradict existing historiography on repartimientos de mercancías as the

institution reached its momentum between 1750 and 1782, when it was abolished (for example: Moreno Cebrián, El corregidor de indios y el reparto forzoso de mercancías, (Madrid, 1977) and Jürgen Gölte, Repartos y rebeliones, (IEP, 1980)). Neither does it contradict specific research on the mita (for example: Enrique Tandeter, Coacción y Mercado. La minería de la plata en el Potosí Colonial, (Siglo XXI, 2002)), since the impact of the mita was relevant in few regions.

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? Población y economía en México durante el siglo XVIII”, in Historia Mexicana, XLI:4, abril-junio, (Mexico, 2002), 615-664.


Peter Bakewell, “La minería en Hispanoamérica colonial”, in Leslie Bethell (ed.), Historia

de América Latina, tomo 3 (Barcelona, 1990), 70. 15

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 Potosí mita; this was compensated by salaried miners47. Also, Potosi’s production lost its overall importance for the area, since mines employing free labour, like Oruro, Charangas, Chucuito, Pasco and Huaylayoc, were growing faster48. 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 in obrajes, 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 Cacamarca obraje towards 1730 many workers were salaried50. Some workshops would even raise wages in


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

(México, 1980).

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

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

John Fisher, “Estado y minería en el Perú borbónico”, in Carlos Contreras & Manuel

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

Albert Meyers, “La situación económica en la comunidades en la Sierra Central a fines de

la época colonial”, in Jacobsen & Pule (comp.), The economies of México and Perú during the Late Colonial Period 1760-1810, (Berlín, 1986), 101. 16

order to keep their workers51. In the second half of the century, indigenous domestic production (chorrillos) competed with obrajes, resulting in a general price fall52. Towards the end of the 18th century, many obrajes had vanished53. According to a contemporary traveler, Concolorcorvo54, chorrillos were the cause of the obraje crisis and the drop in prices. Several studies show that chorrillos 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,


Salas de Coloma, Estructura colonial del poder español en el Perú Huamanga (Ayacucho)

a través de sus obrajes, siglos XVI-XVIII, 394.

Salas de Coloma, Estructura colonial…, 339, 468. “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 Perú, (Lima, 1964), 33.

Pablo Macera & Felipe Abanto, Informaciones geográficas del Perú colonial, (Lima,

1964), 100, 114.

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

(Buenos Aires, 1942).

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


Larson, Cochabamba, 1550-1900. Neus Escandel-Tur, Producción y comercio de tejidos coloniales. Los obrajes y chorrillos


del Cuzco, 1750-1820, (Cuzco, 1997). 17

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 in obrajes, 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 from obraje to obraje60. 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-


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

económicos en el centro-sur peruano a fines del siglo XVIII”, in Jacobsen & Pule (comp.), The economies of México and Perú during the Late Colonial Period 1760-1810, (Berlín, 1986), 213.

Villalobos et al, Historia de Chile, 173. Ward Stavig, The World of Tupac Amaru, (Nebraska, 1999), 144-53. In the 18th century,


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

Larson, Cochabamba, 1550-1900, 100-01. Newland & John Coastworth, “Crecimiento económico en el Espacio peruano, 1680-1800”. Ramírez, Patriarcas provinciales, 236. Macera & Felipe Abanto, Informaciones geográficas del Perú colonial, 42. 18




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 Peru’s refineries employed free labour on a larger proportion than forced labour65. 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 labour66. 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 and mita 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 17 th century, whereas indigenous forced labour was losing its significance69. Bourbon legislative change led to the liberalization of labour. Even if the mita 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


Ramírez, Patriarcas provinciales, 180, 296. Luis Glave y María Remy, Estructura agraria y vida rural en una región andina.


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

Villalobos et al, Historia de Chile, 223, 236-39. Luis Millones, “Los ganados del señor”, Historia y Cutura, vol. 11, (1978), 21. Villalobos et al, Historia de Chile, 167. In Lower Peru (Ramirez, 1986; 181) as in Chile (Gongora, 1960; 68). 19




indigenous labour in textile obrajes and haciendas71. 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 production 73. Along


Like the 1704 Real Cédula ordering the cease of forced labour use in obrajes in the

Viceroyalty of Peru. Silvio Zabala, Silvio (1980): El servicio personal de indios en el Perú (extractos del siglo XVIII), (México, 1980), 4.

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

(Santiago, 1965), 335.

The price trends are consistent with Romano’s observations on price stagnation in the 17th

century and price decreases in the 18th century (Ruggiero Romano, Coyunturas opuestas: la 20

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 Hispanoamérica, (México, 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.

Carlos Newland & Martín Cuesta, “Revueltas y presión fiscal en el espacio peruano, 1691-

1790”, Revista Historia Económica ,año XXI, no. 3 (Madrid, 2003). 21

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 =15911600)
175 150 125 100 index 75 50 25 0
1 - 1 - 1 1 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 - 1 1 1 - 1 - 1 - 1 - 1 - 1 - 1 591 601 61 - 621 631 641 651 661 671 681 691 701 71 - 721 731 741 751 761 771 781 1 600 1 0 20 30 40 50 60 70 80 90 1 700 1 0 20 30 40 50 60 70 80 90

Relative Prices General Price Index


Sources: Elaborated with price data included in: Pablo Macera, Los precios del Perú. Siglos XVI-XIX, Banco Central de Reserva del Perú, (Lima, 1992); José de Ramón & Armando Larraín, Orígenes de la vida económica chilena (Santiago de Chile, 1999); and Enrique Tandeter & Nathan Wachtel, “Precios y producción agraria en Charcas en el siglo XVIII”, in Enrique Tandeter & Lyman Johnson (ed), Economías coloniales. Precios y salarios en América 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= 16711680)


Relative Prices (agricultural / textile) by region in the Espacio Peruano Region, 1591-1790 (base 100 = 1671-1680) 225 200 175 150 index 125 100 75 50 25 0

Lima Potosí Santiago
1601-10 1611-20 1621-30 1631-40 1641-50 1651-60 1661-70 1671-80 1681-90 1691- 1701-10 1711-20 1721-30 1731-40 1741-50 1751-60 1761-70 1771-80 1781-90 1700


Sources: see Figure A.

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

125 100


75 50 25 0

Textile Agricultural General
1591- 1601- 1611- 1621- 1631- 1641- 1651- 1661- 1671- 1681- 1691- 1701- 1711- 1721- 1731- 1741- 1751- 1761- 1771- 17811600 10 20 30 40 50 60 70 80 90 1700 10 20 30 40 50 60 70 80 90


Source: see Figure A.


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

Decade 1701-10 1711-20 1721-30 1731-60 1761-70 1771-80 1781-90

Nominal Wages 100 99 107 104 104 104 106

Prices 100 82 79 75 69 70 67

Real Wages 100 122 136 138 150 149 159

Sources: Lima: Pablo Macera, Los precios del Perú. Siglos XVI-XIX, Banco Central de Reserva del Perú, (Lima, 1992), p. xxiv; Chile: Marcelo Carmagnani, El salariado minero colonial, (Santiago,1963) pp. 81-83; Potosí: Enrique Tandeter & Nathan Wachtel, “Precios y producción agraria en Charcas en el siglo XVIII”, in Enrique Tandeter & Lyman Johnson (ed), Economías coloniales. Precios y salarios en América 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 the construction of the general price index.


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