trade, conflict, institutional reform, and economic growth - portal guarani

8/7/2019 Trade, Conflict, Institutional Reform, And Economic Growth - Portal Guarani

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by Mario H. Pastore"

"Trade, Conflict, Institutional Reform, Ecancm:ic Growth:The Long Eighteenth Century Expansion and I be ri an -A me ri ca n F ro nt ie r' lI i

The basic theorems of international trade lead economists to expectsecular world trade expansions and contractions to directly affect domesticeconomic performance in the same direction. These theorems, however, assumethat trade leaves unaffected the institutional framework assumed at theoutset. Yet, the record abounds with cases which suggest that trade expansionmay eventually lead to institutional changes that will in turn reinforce thedomestic effects of the original trade expansion, and conversely. In addition,from the recent theoretical political economy literature on changing tradeexposure and coalitions, as well as on trade and conflict, one can hypothesizethat trade expansion and contraction may also affect econamic performanceindirectly, by way of their effects on coalitions and international conflicts,which may induce institutional changes from below and above that may reinforcethe direct effects of expanding or contracting trade. Both available evidenceand economic theory suggest, then, that trade and institutions may much as,aggregate demad and suply do in Keynesian income determination models, leadto a simultaneous economic and institutional equilibrium. 1

However, to support the contention that the theoretically specifiedrelationship between changing trade exposure and coalitions has in fact

1Address to the Academia Paraguaya de la Historia, Asuncion, given in Spanish on induction as Academico deNumero, on 23rd March 2000. Text published in Spanish, in Historia Paraguaya, Anuario de la Academia Paraguayade la Historia, Volume XLII, 2002, pps 123-158, but for the tables, graphs, and maps included here.

reading and commenting on an early draft I thank Jerry W. Cooney and Stanley Engerman, and for discussingcertain issues in the paper, Pedro Vives Azancot,


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2obtained its proponents have offered evidence fram the nineteenth century

d t oto W W Iend of WWII. They have advanced little if Any evidence fram the previoussecular expansion and contraction of world trade, that of the long eighteenthc~Dtury and the early decades of the nineteenth, more important in somerespects. Sirrdlarly, though a recent study has found the notion that trade mayexacerbate conflict between countries with sirrdlar endowments and tastes thatcompete for the same export markets to be consistent with the evidence formajor South American wars of the nineteenth and twentieth centuries, littlehas been said about the influence that the long eighteenth century expansionand the early nineteenth century contraction of world trade may have had inunleashing international conflicts and, through them, bringing aboutinstitutional changes that may have reinforced the domestic economic effectsof the original expansion and contraction.

I will focus here on the long eightepnth century expansion of worldtrade and its effects on a paradigmatic Spanish American frontier colony,distant and isolated Paraguay, on both the Indian and Portuguese frontiers.Here, the long eighteenth century world trade expansion led to a domesticexpansion which in turn resulted in attempts to effect institutional changefrom below. Thus arose the first serious expression of creole nationalism inthe Spanish American colonies, the so-calJ:.d "Comuneros Revolts" of 1720-1735.However: these revolts were repressed by the Bourbons, who, after their defeatin the Seven Years' war, recentralized political power. The so-calledBourborii,cReforms of the late eighteenth century ensued, and have recentlybeen credited with bringing about an econoni c boam in frontier Paraguay. 1

I will argue here, therefore, that the long 18th century world trade


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3

expansion, ln addition to inducing a domestic economic expansion throughchannels that the staples growth model would lead one to expectr also led inParaguay to changes in domestic political cleavages and to opposing attitudesregarding protection and liberalization that 1 to internal conflict in amanner consistent with Rogowski's analysis of changing trade exposure ondomestic political coalitions. I will also contend that the early 18th centuryrise of anti-colonial creole nationalism had rrrilitary origins, consistent withNorth's view that the state requires physical and ideological coercion tocurtail the free rider problem and assure compliance.l I will furthermoreargue that the long eighteenth century expansion of world trade, byencouraging more rapid growth in the British than in the Spanish empire, ledby way of a Gerschenkronian, game-like challenge-response mechanism to Britainand Spain's entry into the Seven Years War, which ended with the defeat ofSpain. This is consistent with the notion I have elsewhere suggested with

Carlos Seiglie, that though competitive trade according to comparativeadvantage may be expected to lessen international conflictr imperfectlycompetition in international trade will lead to strategic behavior that mayencourage international conflict. In turn, international conflict can lead, asOlson has shown, to changes in domestic political institutions and in econamlCpolicy that by altering incentive systems for private agents and establishinga more proper sphere for public sector activities may reinforce the positivedirect effects of trade expansion on economic performance.! Spain's defeat inthe Seven Years' war directly resulted in the Bourbonic Reforms of the 1770sand 1780s, which recentralized political power after the Camuneros revolts.Even so, many of the reforms proposed by the Comuneros were later incorporatedinto the late colonial Bourbonic Reforms.


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4Following ' s on appears to

have turned into a veritable econcrni.cboom that lasted until the first decadeof the nineteenth century. However, shortly after the Napoleonic wars causedworld trade to begin to contract and the French invasion of Spain in 1808 ledto the collapse of the Spanish empire, creole political entrepreneurs inParaguay seized political power in what eventually became a new Latin American"province-state." The world trade contraction of the first half of thatcentury induced a dcrnestic contraction that together with the coalitionalchange that ensued turned the contraction into a depression that ushered inthat country's 19th century experiment with "state-socialism" so called, whichreally was a creole version of Bourbonic mercantilism. s The peak that thelate colonial economy reached in the late eighteenth century was not attainedagain in the national period for another century.

The portait I will offer here of the eighteenth century economicperformance of this isolated backwater of the Spanish American empire willdiffer substantially from those the best known historians of Paraguay -armedwith a different conception of what role colonies generally fulfill in animperial systemr have preferred.! I will also suggest that nationalism hadrrrilitary origins in early 18th Century Spanish America, even though theconsensus is that it originated in nineteenth century Europe and that -contrary to what most econorrrists raised on the traditional/modern dichotomy ofeconomic development textbooks would not expect- institutional innovation didtake place in a Spanish American frontier colony in the early eighteenthcentury. This paper and my earlier one on the effects of the trade contractionof the first half of the nineteenth century -if taken together- offer a viewof the effects of changing trade exposure during the late eighteenth century


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5f

In the following sections I will examine in detail the record of thelong eighteenth century, which I define as extending from 1680 to 1808. Theneoinstitutionalist staples growth model within which the analysis isconducted will be developed in the process. Section One will discuss thesegment stretching from 1680 to 1750 that is, from the first signs of traderevival late in the seventeenth century to the end of the Camuneros Revoltsand the rrdddle of the eighteenth century. section Two will consider the lastsix decades of the late colonial period, and will focus in particular on therrrilitary, a drrrinistrative, and commercial policy aspects of the post SevenYears war Borbonic Reforms. Section Three gathers the conclusions and drawssome contrasts with the British American continental colonies.1

Section One.Trade Expansion, Internal Conflict, Institutional Reform fram Below, and

Irrperial Repression: Late Seventeenth to Mid Eighteenth Century Paraguay.Economic activity quickened in Western Europe as the seventeenth century

crisis lifted, earliest of all in Holland and England, where mcmentousinstitutional innovations obtained. Particularly important among theseinnovations was the exchange of revenue for rule-making power betweensovereign and Parliament, central to the transition from absolute toconstitutional rule that first appeared in England in the late seventeenthcentury. Parliamentary rule raised the costs of seeking mercantilistregulations and consequently led to a more competitive econamy. It also led togreater stability of tax rates that increased the ability of individuals toccmnit and encouraged the development of capital markets, and in those and


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6other ways helped the Industrial Revolution eventually get under way.'

trade with the peripheral Spanish coloniesof the southern cone of South America increased since late in the seventeenthand early in the eighteenth centuries r and helped to erode the generalizedeconomic depression that had characterized that region for much of theseventeenth century. The vitality of contraband trade is suggested by the 1680founding of the Portuguese colony Sacramento on the so-called eastern bank ofSpanish South America. As Lynch puts it: "Sacramento became a huge entrepot

for English contraband: what Jamaica was to the Caribbean, Sacramento was forthe Rio de la Plata.~ In addition, discoveries of gold and its rrrininginBrazil in the late seventeenth and early eighteenth centuries and the recoveryof silver rrriningproduction in Potosi after the 1730's increased demand formules, cattle, and cattle by-products from the grazing lands centered on themesopotarrria of the Parana, Paraguay and Uruguay rivers, which include parts oftoday's Southern Brazi 1 and Paraguay, Uruguay; and eastern Argentina: as wellas for yerba mate from the area north of the mesopotarrria straddling thecurrent borders of Argentina, Brazil and Paraguay."c Increased exports ofyerba mate led to rising demand for cattle -which yielded the hides in whichthe yerba mate was packed and the meat with which the crews that gathered itwere fed- and land. The center of gravity of the colonial economy began toshift from the inland mines of Potosi to Buenos Aires, the port through whichthe resource intensive silver and other output of the region could most easilybe traded for comparatively more capital and labour intensive Europeanmanufact.ures ;'!

In Paraguay, increased regional demand Ied in the first hal f of theeighteenth century to the construction of forts that improved security againstequestrian Indian attacks from the west. Greater security facilitated navigation


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7downriverParaguay had a comparative advantage in resource-intensive goods produced byusing abundant resources like yerba mate forests and grazing land. Higher exportsof these goods Ied to increased demand for the natural resource inputs needed fortheir production, which were extracted under different property rights regimes.Yerba mate was extracted from royal forests by private entrepreneurs licensed bythe crown, but the yerba mate forests themselves remained state property, thatis, private property rights were not defined over them. On the other hand,prospective cattle ranchers could obtain royal grants of lands on which tograze their heards. The grantees could become private proprietors of the landsthey initially received in usufruct by fulfilling certain conditions. The firstroyal grants of land for private cattle raising made in Paraguay coincidentallydate from the 1670"s . Recipients of these land grants subdivided them and rentedthem out to owners of cattle stocks. That is, a form of share tenancy arose.

Finally, the ccmnonly-owned lands of Paraguay's pueblos de indios were alsosought after by non-Indians. These "forasteros" so-called married into theindigenous communities to obtain access to their lands 13

The population at the beginning of the period was made up -at one end ofthe ethnic spectrum- of the indigenous people who had survived the drasticpopulation decrease of the sixteenth and early seventeenth centuries, the Africanand black slaves reexported to Paraguay from Brazil, and the manumitted freebl acks and mulat toes. At the opposite end were the Spaniards, the SpanishAmerican "cr iol los" (American-born children of Spaniards), and the mestizooffspring of Spanish and Indian unions. Manymestizos in effect became "cr iol l os"during the seventeenth century, because Spanish rrrrgration to Paraguay was verysmall. Spaniards I Spanish-American criollos J and mestizos could hold encomiendas,


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8restricted grants 1 crown toexchange for the payment of taxes and for rrrilitary service contributions, butthese enccmenderos were now a distinct rrrinority. Those who did not holdencamiendas largely made up the peasantry, which was now the majority of thepopulation.H

Most of the indigenous people were confined to towns of their own("pueblosde indios") for collective taxation and other purposes. Those entrusted toSpaniards and confined to towns founded by Franciscan friars early on wererelatively fewer nowthan those living in the Jesuit rni ss ions that were foundedbeginning in the early seventeenth century. Neither the privately owned Africanand black slaves nor the bal ck freedmen were to be confined to towns, but by theend of the colonial period three towns of black freedmen ("pueblos de negros")had arisen, for public finance reasons sirrdlar to those that gave rise to the"pueblos de indios. ,,15

The population of the province rose as a result of both natural increaseand irrnrigration. Surveys for 1682 and 1782-1792 allow us to closely approximatethe provinces' total population as well as its ethnic composition at thebeginning and the end of the period under consideration. The 1682 survey puts thetotal population at 38,666. The administrative jurisdiction of Paraguay includedthe Spanish towns, their towns of Indians subject to encamiendas, and the Jesuitrrdssion towns, most of which were not subject to the encamiendas. H Accordingto the late eighteenth century surveys, after the expulsion of the Jesuits thepopulation approached 100 r 000, reaching 96,630 in 1782 and 97I480 in 1792YRoughly speaking, therefore, the population of the province increased 2.5 timesover the course of 12 decades.

The indigenous population -as well as the population of the province


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9in general- rose the late 1 ybecause the indigenous population Jesuitmissions increased by more thanthat of the Franciscan rnisions decreased. The Jesuit mission population increasedrapidly following the commutation of their encarrUenda labor services for moneypayments and mi litary servi ce between 1660 and 1680. On the other hand, theFranciscan mission population -whi ch was still subject to rendering laborservicies to some Spaniards and mestizos in lieu of the tribute they owed thecrown but was not required to render military services- continued to declineuntil the 1730s .11 The mestizo population in particular and, therefore, themestizo peasantry, continued to grow.1! Spanish-American imnigration fromadjoining provinces was also attracted to the province as demand for exports andi mp or ted i np ut s i ncr ea se d.H

Figure 1 Goes About Here

Table 1 Goes About Here




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~ - ~ ~ ~ ~ ~ ~ ~ = ~ ~ = = = = = = = = = = = = - ~ - - ~ - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - - - - - - - - - - - - -Table 2 Goes About Here

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - ~ ~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Graph 1 Goes About Here- - - - - - - - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - -- - - - - - - - - - - - -- - - - - - - - - - - -- - - - - - - - - - - - -- - - - - - - - - - - -- - - - - - - - - - - - -





The rrdlitary power of Paraguayan settlers was also relatively high andcomparatively diffused, because Paraguay was located on the empire's Portugueseand Indian frontiers and because the absence of silver in Paraguay had led thecrown to delegate the provision of defense services onto the settlers,respectively.21 In addition, from its very inception the province of Paraguayhad enjoyed a "special dispensation," that of electing its own governor when theoffice was left vacant by the individual the crown had designated, subject onlyto eventual royal conf i .rrnati.on." This most unusual expansion of the rights to


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f to11

separated Spain fran Paraguay and transportation and ccmrn.m.ication difficul tieskept local officials fran consulting with the crown before making pressingdecisions. Having both the legal right to a measure of participation ingovernment and the means to enforce it, settlers of Paraguay frequently exercisedthe special dispensation in the sixteenth and seventeenth centuries. On occasion,settlers would forcefully depose sitting governors in order to exercise theirspecial dispensation. Settlers of Paraguay I therefore, earned a well deservedreputation as an unruly lot.

Confrontations between governors and settlers arose as a result offrictions traceable to a number of sources. Particularly relevant in the case athand were the sale of gubernatorial and municipal offices as well as the conflictbetween recentralizing Bourbon viceroys eager to assert their authority overregional courts of appeal (the Audiencias) and municipal councils. The purchaseof offices gave governors an incentive to recover the investment they made inacquiring the office by using their rule-making power for personal gain.Municipal office holders found a way of bequeathing the offices they hadpurchased through the simple subterfuge of letting outgoing members of themunicpal councils elect the inccrning members. While the governor's commercialexcesses sparked the Comuneros revolts in the 1720s, the conflict between Bourbonviceroys and governors on the one hand and the Audiencias and municipal councilson the other led to the spread and radicalization of the revolts in the 17305.

TheComuneros revolts were in fact sparked by the actions of a governor whowas seeking to recoup the investment he had made to purchase the office and whomthe settlers contended favored the Jesuits at the settlers' expense.ll Whenhesought Jesuit support the settlers' revolt turned into a conflict with the


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Jesuits as well. a 1 power consequence Jesuimission Indians were exempted fran the encrmi enda and were allowed to carryfirearms. The Jesuits became, to the settlers, a state within a state.

Settlers and Jesuits had struggled before. In the seventeenth century,however, they had fought over control of indigenous people. Now they fought overland rather than labor, and what they regarded as unjust tax exemptions that thecrown had granted the Jesuits and which diminished the ccmpeti ti veness ofParaguayan products in the regional market. A similar revolt arose in theneighboring province of Corrientes.H

Relatively larger landowners led the first phase of the Camuneros revolt,consistent with Rogowski's framework. The settlers primari 1y demanded theexpulsion of the Jesuits from the cattle raising lands between the Parana and theTebicuary rivers, liberalization of trade restrictions with the Jesuit missionsthat the colonial administration had imposed, and the curtailment of preferentialtax treatment granted to the Jesuit missions. During the second phase, however,1eadership of the movement passed onto the hands of the lower rank 1 eaders of themilitia of poor and landless peasants laden with military duties, and the revoltchanged aims. It ceased to primarily seek liberalization, and began advocatingwealth redistribution towards smaller landowners, who had become more numerousas a result of population growth and made up the bulk of the militia.lS It alsodemanded that the sale of provincial offices be ended, and that these offices bereserved for natives of the province who would be elected to their posts byresidents of the province, a demand that would be echoed by the independencemovement of the early nineteenth century. In the process, the settlers assertedthe supremacy of the cammon folk over the king, challenging the authority of thecrown to the point of appointing a Junta Gubernativa and executing the governor


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13crown sent to ve

Significantly, this is the first time that lower rank 1eader s of themi Li,tia took independent act ion of this kind. II Though the settlers earned amilitary victory over the colonial administration and the supporting Indianarmies from the Jesuit missions, the colonial administration eventually defeatedthe revol t and exempl ar.i1y punished its 1eaders Y

Local militia leaders furnished the defense services whose provision thecrown had shirked for unprofitable. In effect, then, the settlers werealternative providers of these services and, in a sense, competitors of thecrown. Creole public entrepreneurship in Paraguay, therefore, may be said to bemilitary in origin. Conversely, the military origins of Paraguayan publicentrepreneurship has a lot to do with the formati on of Paraguay's sense ofnationhood and the development of a separatist conscience there. This observationmay also be applicable to other Spanish American frontier colonies. l s

Theoretical reasons would lead one to expect just such a connection betweenproviders of public goods like defense and ideologies of nationalism. Nationaldefense providers rrrusthave a comparative advantage in the supply of coercion,which is also a required input to enforce property rights and curtail the freerider problem that arises when governments tax individuals to finance theprovision of defense and other services. However, physical coercion alone doesnot suffice to curtail the free rider problem and has to be supplemented byideological means. Collective action entrepreneurs, therefore, are likely to seekto persuade the individuals they defend of the desirability of the defenseservices they provide and of the need to comply with the taxes levied to financetheir provision. To that end, they may stress an us-versus-them attitude. Thatis, they are likely to give rise to an ideology of nationalism, and to use that


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14~e~ a ~

groups that settle the area defended ~d taxed. The ideology of nationalism,therefore, may be expected to precede the nation rather than to follow it.l!

Were the Camuneros a modem phenomenon similar to other eighteenth centuryrebellions or should we conclude from the fact that they had an antecedent in thesixteen fourties that they were an anachronism? To the extent that the CamunerosRevolts were a consequence of increased exposure to world trade during the longeighteenth century they belong with other similar phenomena of the eighteenthcentury and are a modern phenomenon. The fact that settlers and Jesuits alsofought during the seventeenth century crisis should not lead to the conclusionthat they were an anachronism, for the earlier confrontation was over indigenouslabor and its protection, i.e., was of a different nature. Under conditions ofworld trade contraction we would expect owners of scarce factors to actively seekgreater protection. The crown owned indigenous labor in the sense that it had aclaim to collecting part of its earnings as tribute, and the colonialadrrUnistration actively sought the spread of Jesuit missions.

Following the province's ill-fated "Camuneros Revol t," however, the crowndid away with the special dispensation and otherwise recentralized politicalpower. From then on, only the colonial admi ni st.ration named and removedgovernors. The practice of sell ing both gubernatorial and municipal officesappears to have ended. Furthermore, the colonial administration began enforcinga seventeenth century policy to grant no new encomiendas and force vacant onesto revert to the crown. Coincidentally r the population of the Franciscan missionsbegan to increase, albeit slowly, just as it had happened with the indigenouspopulation of Jesuit mission after it was exempted from encomienda servicesbetween 1660 and 1680. 3 0 In the absence of a standing army, the policy not to


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15grant new to vacant ones to r evert to crown d

necessarily mean that the population of the province would be forced to bear ag re at er r rd li ta ry b ur de n.

Let us now turn to the consequences of the Cammeros revol ts on the Jesuitmiss.ions . The two major Cammero onslaughts against the Jesuit rni sions areclearly corrrelated with two episodes of drastic population decline in therrdssions, the precipitous one observable in the 1730s from nearly 150,000 toclose to 75,000 in particular. The Jesuit rrdssion population recovered in the1740s, but exceeded the 100,000 mark only slightly, and very briefly.

Section Two.The Seven Year's War, Institutional Reform from liliove, a nd the Late

Colonial Boom, 1775-1810.In the second half of the eighteenth century the British economy grew more

rapidly and the Industrial Revolution got underway, which led to greater imperialcompetition and to the Seven Year's War. Maria Therese of Austria joined Franceand Russia against Frederick the Great of Prussia, whom Britain then supported.Although the French were defeated by the British at Quebec in 1759, suggestingwhat the war's final outcome would be (i.e. that the French would be out of theNew World and India), Spain belatedly entered the war on France's side, in 1761.In 1762 Britain took Havana and Manila. Spain lost Florida to Britain but lncompensation received Louisiana from France. Britain encouraged emancipation ofthe Spanish American colonies. To the British challenge Spain responded with theBourbonic Reforms, which were both rrdlitary, adrrUnistrative, and econorrac.ll

The fall of the indigenous population of the Jesuit rni ssions decreased themissions ' usefulness to the crown as a source of tax revenues and military


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16tocrown a ousreason

eastern boundary problems with the Portuguese. The settlement of these boundaryquestions, however, required dividing administrative jurisdiction over the Jesuitmissions between the Spanish and the Portuguese, which provoked the so-calledGuarani wars. As a consequence of these wars, the population of the jesuitmissions declined again.

The indigenous populaton decreases r esul ting from Comuneros revol ts and theGuarani wars, as well as the prospective settlement of the eastern boundariescontributed to the Jesuit's expulsion in 1767. Itis perhaps no accident that fewyears separated the expulsion of the Jesuits from the signing of the 1777 Treatyof San Ildefonso between Spain and Portugal, by which the frontiers in the areaunder consideration were agreed . 3 ,

Administered after the expulsion by the colonial government, the formermission system began progressively to disintegrate, as can be seen from Table 1."Mission Indians" did not return to the forests, as same argued, but spread allover. Many former mission Indians became free artisans and peasants .ll Thoughlarge numbers of indigenous people then became potentially available forentrustment, privately held encamiendas did not regain their past importance. TheJesuit ranches devolved to the care of the state as well.H

As more indigenous people left the former Jesuit missions, monitoring theiradherence to social restrictions imposed on them to enforce racial distinctionsand privileges became more difficult. By simply wearing Spanish clothing l forexample, indigenous people could evade a number of obligations. This contributedto the continued decrease of the proportion of people considered indigenous,which Table 1 shows fell considerably. Same of these former Jesuit missionIndians, who had became skilled artisans in Mission workshops, migrated to the

'Ie


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urban areas I many171 1on

products, yerba and tobacco most prominently among them, was high. The postCamuneros recentralization of political power, therefore, had numerousimplications much before the reforms of the late 1770s and 1780s.3I

The Bourbonic reforms created the Viceroyalty of the River Plate out ofpart of the Viceroyalty of PerU, with Buenos Aires as its seat. The Buenos Airesgarrisons were reinforced by larger silver subsidies from the Potosi treasury andmen from the outlying provinces, Paraguay among them. The Edict of Free Trade(1778) 1ifted some of the inter-provincial trade hindrances imposed by theHabsburgs in the seventeenth century and further encouraged economic act.i vi ty inParaguay. Also I government by Intendants improved tax col l ecti ons and thedelivery of government services, defense included; to that effect the militarystructure was reformed, which in turn implied the reform of the encomiendasystem. As the encomiendas progressively disappeared, the self-financedencomendero-ledmilitias gave way to a semi-professional, salaried officer corpslargely paid out of royal revenues. In Paraguay, the old "urbane" system wasstrengthened by the "filiado" system, a corps of semi-professional, salariedofficers drawn from among the scions of old land-owning families that took overthe leadership of the militias in 1801.H As already noted, the encomiendas wereoutlawed shortly thereafter, in 1803.31

In addition, to defend the northern frontier against perceived Portugueseterritorial expansion, the two largest fortresses of the colonial period werebui l t in Paraguay during the last decade of the eighteenth cent.ury ;" There werealso twenty guard posts in 1806,H River patrols complemented forts andguardposts. H The secured area expanded considerably, and allowed the settlementof the entire littoral of the Paraguay river.c Commandof the peasant militias


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was now in the hands of a corpsrevenues derived fran increased interprovincial and foreign trade as well as franland rent. From among these rrdlitary officers arose most of the leaders of themovement that seized political power when Spanish rule collapsed in 1811. 4 1

The Reforms centralized political power in the colonial bureaucracy andreorganised the rrdlitary structure so that it more closely resembled a standingarmy. Absolutism increased and coercive power became more concentrated in thehands of the state. As a resul t , no revol t comparable to that of the "Ccrmmer os"again arose during the remainder of colonial rule. Only after the Britishinvasions of Buenos Aires and Napoleon's invasion of Spain underrrdned Spanishimperial power did grumbling against trade restrictions s irni lar to those that hadsurfaced during the Comuneros revol t s arise, but there is no evidence thatanything remotely like the second phase of the Ccrnuneros revolt again obtained.

The liberalization of trade of the late 1770's, by eliciting greaterregional trade, called forth still greater production of yerba mate in the north,of tobacco in the east and, in the south and southeast, of cattle, used as aninput in the yerba industry.41 Exports of yerba mate, Paraguay's main staple lincreased particularly rapidly; those of hardwoods and tobacco increased as well,but more slowly. Asunci6n yerba mate exports were only 26,429 arrobas in 1776but averaged 195,102 arrobas per year fram 1792 to 1796 and 271,322 arrobas peryear from 1803 to 1807. Foreign demand for exports of hardwoods was also highdue to the fact that the rising regional trade increased demand for riverain aswell as overland transportation, and the population of Buenos Aires was growingrapidly. Imports also increased but they remained substantially below exports.H

Increased production and exports attracted capi tal from outside theprovince and raised the demand for financial services. The Church had previously


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played a role as a financial intermediary, even though it was never very strongin this poor frontier colony, but in the wake of the Reforms the state itselfstrove to furnish several types of financial servi ces, among them the so-call ed"Li.branzas ;" The resulting competition between Church and state suggests thatfrictions between them may have developed. (5

Paraguay was the main source of yerba mate, hardwoods, and tobacco for theviceroyalty; both yerba mate gathering and logging thus increased at severalpoints along the Paraguay river, as did shipbuilding and cartbuilding. Costs tothe government of enforcing the terms of the licenses it issued to privateentrepreneurs who exploited yerba mate and hardwood forests were high. These,therefore, were exploited much as a corrmonly owned resource, which led todeforestation, in a manner consistent with expectations based on the econorrdctheory of corrmon property resource use. H On the other hand, tobacco was themain cash crop of mestizo, guarani -speaking small peasants, who grew it alongsidesubsistence crops on farms that in effect were privately owned, even though fewpeasants had clear title to the lands they cultivated.

Yerba production and hard-wood logging also required large inputs ofcattle and, therefore, grazing lands, which were still available in the southeast and were now availabe in the north as well. Privately owned ranches wereformed, in the south fram lands and cattle abandoned by the Jesuits. The statealso sought to establish royal cattle ranches, to help defray the costs ofdefense arising from the expansion of the yerba and cattl e frontiers; two"estancias del Rey" (royal ranches) thus emerged where troops could raise horsesand cattle and grow crops, to help equip and feed themselves, one on the "LowerCoast," the other on the 'Upper Coast" of the Paraguay river. {l The colonialadrrrinistration rerm.lnerated military commanders in land, granted according torank. For this reason, as well as because of their access to indigenous labor,military commanders became relatively prominent among northern cattle


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20ranchers. U Azara observed that "ranches in Paraguay were small er than inArgentina, and the cows tamer and fatter." However, the absence of surface sal t(''barreros'') and the clirrate itself made cattle raising relatively moredifficult in Paraguay than in more southern provinces of the viceroyalty. Thus,late colonial Paraguay was a net ili"Porter of cattle!'

The greater domestic and foreign demand and the greater derived demand forland and labor helped expand the land frontier. Voluntary migration to the morerapidly growing yerba rrate and cattle ranching areas of the north from within and

without the province accelerated as well. A comparatively large intra-provincialmigration is observed, of landless peasants from the southern mission townsabandoned by the recently expelled Jesuits to the yerba area in particular.Irrrnigration from other provinces of the Viceroyalty and from Spain is alsoevident. Newtowns were formed, the land frontier was pushed farther out. 5 0 Morefree peasants tended to devote a greater part of their time to working for wagesin the yerba trade and progressively abandoned the old custom of growing twocrops per year. 5~

Involuntary migration also increased. Table 4 suggests that as the supplyof coerced indigenous labor available to p~ivate agents declined African slaveswere resorted to in greater quantities. The expansion of cattle production alsoincreased demand for chattel slaves, whowere used predominantly as overseers ofcattle crewsY Vertiz, second viceroy of the River Plate, first authorized theimport of African slaves and complete freedom to import black slaves into theRiver Plate was granted in 1791.5 ) African slaves predominated in the privatesector. The colonial adrrdnistration also owned black slaves. After the Jesuitswere expelled, the substantial number of .ilaves they owned -along with theirother assests- became state property and were assigned to the Colegio SerrUnariode San Carlos. However, state enterprises .it.il l relied more heavily on coercedindigenous Iabour ." The state had made use of indigenous corvee labor for a


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variety of purposes before began to encourage public enterprises in theto Han main

Spanish mercantilism before and after 1700, and it was only natural that itshould resort to coerced labor to staff these enterprises. Wages rose as well,partly because the late colonial trade expansion had raised the demand for labor,and the government sought to stimulate state-enterprise production of goods itdeemed important for military or public finance reasons. The holding ofencomiendas by individuals, though much diminished, was not abolished until 1803,and use of coerced indigenous 1abor continued in state enterprises afterabolition of the private encomiendas.

Among state enterprises established as part of the Bourbonic Reforms wasthe Royal Tobacco Monopoly. In the Viceroyal ty of the River Plate tobaccocultivation was allowed only in the province of Paraguay. The other provinces ofthe Viceroyal ty could only buy Paraguayan tobacco. The Real Renta del Tabaco thenestablished itself as the single buyer of export quality tobacco in Paraguay andthe single seller of this tobacco in the other provinces of the Viceroyalty. Thatis, the Real Renta established a monopsony on export-quality tobacco as well asa state tobacco factory to produce "black twist" with Indian labor from theencomiendas that had reverted to the crown after the Camuneros revolts. otherstate enterprises were also established that used coerced indigenous labor, thecable factory for oneY The colonial administration also assigned coercedindigenous laborers to certain private firms it wished to encourage, shipbuildersin particul ar ,H Thus, the use of coerced 1abor in state enterprises I therefore Iwas simply a logical extension of a well established practice rationalized onpublic finance grounds. That the colonial administration should have retrievedthe remaining encomiendas and used them in state enterprises like the "Fabr icade cables" and the "Estanco del Tabaco" is consistent with the notion that thethe colonial administration did not forfeit its right to collect tribute from


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Indians merely because it retrieved private enccmi endas .Consider now mil tobacco, the

small peasantry, and the colonial adrrdnistration. The Real Renta del Tabacoprohibited the cultivation of tobacco everywhere in the Viceroyalty of the RiverPlate except in Paraguay. All other provinces of the Viceroyalty would be forcedto buy Paraguayan tobacco. The Real Renta the established a monoposony of thevile weed inside Paraguay and a monopoly on the sale of Paraguayan tobaco in theother provinces. Expecting a large volume of tobacco sales, the RR contractedwith Paraguayan producers to buy tobacco fram them at a price that was not muchhigher than that these producers had previously been able to get for their outputbut that had the virtue of being fixed. In addition, the Renta did not initallyrestrict the quantity of tobaco that its Paraguayan suppliers could produce. Thatis, the Renta absorved same of the risk tobacco growers previously faced. Thisled peasants to overproduce tobacco and forced the Renta to overstock it. Whenthe Renta could not sell its accumulated inventories it reneged on its previouscomrratment to buy all output. Subsequent royal attempts to induce peasants tofurnish the Real Renta with tobacco succeeded only in 1800, when the Real Rentaoffered those who would comrrat themselves to supplying it with a certain amountof tobacco exemption fram rrrilitia service. 5 7 Predictably, numerous prospectivetobacco suppliers registered themselves with the Renta as prospective suppliers,and were exempted fram rrrilitary s ervice. However, they tended not to fulfilltheir contracts. The game was to register oneself as a Real Renta tobaccosupplier, obtain exemption for rrrilitiaservice and then claim that the weatherdestroyed the crop. The decreased reliability on the miLiti.a for provincialdefense purposes increased the relative importance of the filiado corps.

The greater d~and for staples and the fixed price for tobacco togetherwith the concomitant exemption from militia service led to an increase of thesmall peasantry and, therefore, of the land frontier, and increased the relative


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2 3importance of small peasant proprietors even if itconcentration of land

a certainy,

land market became more active: land prices rose, land rents, tenant-farming, andlandless laborers appeared, and the frontier was pushed farther out. During thisperiod, the lands of the pueblos de indios were increasingly encroached upon bystrangers (Uforasteros"), but Indian towns continued to be formally segregateduntil 1846, when they were formally dissolved. 51

Rapidly rising exports led to a surplus in the balance of trade, which wasreflected in a net inflow of specie, and a consequent increase in the moneysupply, to which cash payments to the new provincial bureaucrats andserrUprofessional officer corps contributed. These increases in the money supplywere absorbed partly by the greater volume of trade and partly by a price levelincrease. To the extent that yerba mate and other comnodi ty moneys did notfunction efficiently as media of exchange by comparison to silver coin, thesurplus in the balance of trade may have led to an increase in the volume offinal goods transactions. However, it is clear that increased econorrrrcactivitypredates the reforms of the late 1770s and that the market was fairly extensivedespite the relative absence of silver coin, which suggests that comnodity moneysserved fairly efficiently as media of exchange. I'

That a considerable inflation may have been observed is suggested by thefact that landowning families appear to have held significant hoards of silverp la te . C on ve rs el y I such hoarding -by decreasing the stock of money- may have keptinflation below levels it might otherwise have r eached ."

The old land-owning families and the newly arrived Lrrrrri.qrant.sentered intoa mutually beneficial division of labour and intermarried. The landowners raisedcattle in the countryside while the irrnrrgrants concentrated on the yerba matetrade and urban cornnercial acti vi t ies, though nei ther appears to have special isedcompletely. However, the irrnrigrants'influence on the Asuncion cabildo tended to


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increase at the expense of the landowners whoresul ted in sc:rnelIDtil the European wars disrupted trade.&:

Clearly, econrmi c conditions had improved substantially in Paraguay in the

formerly it, whicheconorny to boom

first decade of the nineteenth century relative to the late 1770's, when a royalinspector reported that the Province "needed redemption." It can also be affirmedwithou hesitation that late colonial economic activity far outstripped that ofthe early national period. II

The nature of provincial political intercourse changed as a result ofthe late colonial economic expansion. The expansion of foreign trade alteredtraditional political cleavages. Increased yerba harvesting and cattle ranchingimproved the for tunes of pursuers of those acti vi ties, but had del eteriouseffects on agriculture, that of tobacco in particular. Rising wages in the yerbaindustry bid some labourers away fram tobacco growers while the royal tobaccomonopoly lowered domestic tobacco prices. Also, expanding cattle herds could notbut have negative externalities on peasant plantings in the era before barbedwireY Furthermore, by refonning the military system, the Bourbons helped tocreate a simiprofessional military that relied on government revenues for itssupport.

Section Three. Conclusions.The long eighteenth century world trade expansion, therefore, had positive

economic and institutional effects even in distant, isolated Paraguay, leadingto both institutional reform movements fram below and from above. Most of thecharacteristics of the movements for institutional innovation from belowobserved towards the end of the first third of the eighteenth century can beaccounted for by changing exposure to world trade and relative factorproportions, but a part was also played by conflicts that arose from attempts to


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25redefine rights over resources that were accruing rising I and by publicfinance pol . However J the Ccrnun.eros

recentralized political power. They were not again similarly challenged until theSpanish American empire collapsed.

The Bourbonic recentralization, however, did have same positive economicand even institutional effects. The sales of offices ended. The expulsion of theJesuits essentially opened the missions to commerce with outsiders and allowedthe settlers to penetrate the lands between the Parana and the Tebicuary. Thisfulfilled two of the main demands of the Camuneros: it increased the supply ofland to the settlers and liberalized the markets for goods of the Mission towns.

The Bourbonic reforms properly speaking also had liberalizing aspects. Forexample, the abolition of the repartimiento de mercancias in Indian townseliminated the monopolistic and monopsonistic control that Spaniards previouslyexercised on those markets. In addition, the military reform did away with theencomi enda and freed numerous non-Indians from the requirements of militaryservicel even if at the same time it set up the basis for what would become thefirst early national standing army that buttressed the dictatorship of JoseGaspar Rodriguez de Francia. Al though the Indians freed from the encemi.endacontinued to owe tribute to the state, which could therefore compel 1 them to workin state enterprises the Bourbons encouraged, the 1 8 0 3 abolition of theencomi enda liberalized the labor market. state enterprises like the Royal TobaccoFactory actually helped decrease the burden of mi litary services on thepopulation. The rrdlitary reform also helped increase security against Indianattacks and policing against cattle rustlers in the country side. Rural dwellersbenefited from law and order. The military reform and state enterprises f togetherwith the rrrilitary reform helped increased the supply of labor.

The export-led economic expansion in turn benefitted owners and intensiveusers of abundant resource whose demands for further liberalization are clearly


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26evident in the beginning of the transition to the earlyI have suggested elsewnere

peri . But as1

because the world contraction world trade gave political impetus to conservativesocial sectors that benefitted from protection and led the transition to theearly national state socialism, which further accentuated the recession and mustbe regarded as an institutional regression. ~4

Whether the Comuneros could have been successful or would have followed apo litical path similar to that the thirteen colonies British Continental coloniesdid is difficult to say. It is, however, clear that contrary to what was the casein Bri tish A mer ica , the B our bon .i ,cr ece ntr ali za tio n r eim pos ed po lit ic al a bs ol ut is mi n P ar ag ua y. It is al so c1ear that after a brief inter Iude following the ccl lapseof the Spanish empire Bourbonic absolutism and mercantilism reappeared in earlynational Paraguay as the country's "state socialism" so-called. This neoborbonicearly national regime contributed to the collapse of regional federativeattempts, which together with the contraction of world trade of the first halfof the nineteenth century brought about the Paraguayan Great Depression of the19 th Ce ntu ry.


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Endnotes

1.Tnis is true, for one, the cCf!"!Parat ivea dvanta ge theore m in eith erRicardian or Heckscher-Olin version. Among the cases I am referring are mostLatin American countries fram the 1840s to the 1930s. See Cortes Conde'sExport Economies. For the effects of changing trade exposure on coalitions seeRonald Rogowski, Commerce and Coalitions. The theoretical literature onconflict and defense dates to Kenneth Boulding's Conflict and Defense andSolomon Polachek's "Trade and Conflict."2. The consensus among students of nationalism J.S that it arose in nineteenthcentury Europe. Benedict Anderson, however, suggests that nationalismoriginated in the eighteenth century New World and observes that "Paraguayforms a case of exceptional interest." However, his reference in thisconnection is to the early national regime of Francia in the first half of thenineteenth century, not to the Comuneros Revolts of the first third of theeighteenth century. See Imagined Communities especially p. 64. footnote 52.3.See Richard Caves, "Vent For Surplus Models of Trade and Growth," in R.E.Baldwin et al (editors) Trade, Growth and the Balance of Payments (Chicago:1965) and, for a good review of the subsequent literature on the staplesgrowth to the early 1990s, see John McCusker and Russel Menard, The Economicsof British America, 1608-1789 (Chapel Hill, NC: University of North CarolinaPress, 1991), pp. 17-34. For the effects of trade on domestic coalitions andthe use of ideology to curtail the free rider problem, respectively, seeR on al d R og ow sk i I Ccmnerce and Coalitions. How Trade Affects Domestic PoliticalAlignments (Princeton, New Jersey: Princeton University Prss, 1989) andDouglass C. North, Structure and Change in EconrrUc History (New York: Norton,1981), chapter 5.


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284.See Mangur Olson, The Rise and Fall of Nations: Econ~c Growth,stagflation, and Social Rigidities Press,Haven, Conn.: e1982). On trade and conflict see Mario Pastore and Carlos Seiglie, Trade,Rent/ Revenues, and War: Analysis and Implications of Major Latin AmericanConflicts," an early version of which was presented at the panel on ''War-Making States, state Breaking Wars, and Econ~c Development," XIXInternational Congress of the Latin American Studies Association, Washington,D.C., September 28-30,1995, and Seiglie and Pastore, "The Effects of Trade onMilitary Spending," presented at the Peace Science Society Meetings, Houston,TX, October 24-26, 1996.5.The main aspects of Paraguay's early national experiment with statesocialism -the social revolution, agrarian reform, and state-ledindustrialization attempts of which it supposedly consisted- are discussed inmy "Trade Contraction and Economic Decline: The Paraguayan Economy Under'!:' ._rancJ.a, 1810-1840," Journal of Latin American Studies Vol 26, Part III(October 1994) and "State-led Industrialization: The Evidence on Paraguay,1852-1870," Journal of Latin American Studies Vol 26, Part II (May 1994). Thisexperiment led to - and was destroyed by- the Triple Alliance War, analyzed inPastore and Seiglie, "Trade, Rent, Revenue, and War."6.For example, White observes that n.Paraguay's political economy was notdesigned to benefit the province; its political and ecoomic structures existedto promote the interests of American and European metropolises. VI S ee Ric hardAlan White, Paraguay's Autonomous Revolution, 1810-1840 (Albuquerque:University of New Mexico Press, 1978), p. 17, which also epitomizes the casefor Paraguay' s early nationa l "state-s ocialism."7.For economic conditions at the end of the seventeenth century see MarioPastore, "Coercion, Taxation, Trade and Development in Early and Mid Colonial


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29Paraguay," Journal of Latin American studies Vol 291 Part 1 (the earlier version publ in Tam Brass V~lUnfree Labor (Berne and New York: Peter Lange, 1997).8.On institutional innovation in Holland see Douglass C. North and Robert P.Thomas I The Rise of the Western World (New York, 1973)1 in England, Douglass

1997) or

C. North and Barry Weingast, "Constitutions and Comnitment: The Evolution ofInstitutions Governing Public Choice in Seventeenth Century England," Journalof Economic History vol 49, nQ 4 ( December 1989):808-832. On the effects ofparliamentary rule on the costs of seeking regulation see Baysinger, Ekelund,and Tollison, "Her cant ilism as a Rent-Seeking Society," in J . M.Buchanan et al(editros) Towards a Theory of the Rent Seeking Society (Texas A&M UniversityPress: College Station, TX, 1981).9.See John Lynch, Spanish Colonial Adrrdnistration 1782-1810; The Intendent inthe Viceroyalty of the Rio de la Plata (London I 1958)1 pp.32-33.10.Yerba ~ate (Ilex Paraguayensis) grows spontaneously between 25 and 32degrees latitude south. See Adalberto Lopez i "The Economics of Yerba Mate inSeventeenth Century South America," Agricultural History Vol. 48 (1974), p.493. The leaves are toasted and crumbled. The higher quality tea powder isknown in Guarani as "caa miri, the lower quality tea as "caa vira" or "yerbade palos." Either one yields a hot or cold infusion (mate coddo 0 terere,respectively) that is sipped with a straw.II.The renewed economic expansion of the River Plate region in the first halfof the eighteenth century is discussed by Magnus Morner in "Panorama de 1asociedad del Rio de la Plata durante la primera mitad del siglo XVIII,"Estudios Americanos Revista de la Escuela de Estudios Hispanoamericanos,Sevilla, Vol. XVII, nQ 92-93 (Mayo-Junio 1959):203-216. Economic conditions inParaguay in the same period may be discerned from Rafael Eladio Velazquez,


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30"Navegaci6n paraguaya de los siglos XVII y XVIII VI Estumos Paraguayos Vol. I(November 1973): 45-84, Juan Rivarola i f(Asunci6n, 1986), and Branislava Susnik Una visi6n socio-antropol6gica delParaguay del siglo XVIII (Asuncion, 1991), pp.7-59.12.In 1706 there were eleven forts and garrisons, n~ne spread over fiftykilometers along the Paraguay river and the other two in mountain range knownas "Cordillera," in the Indian towns of Altos and Tobati. In the decade of1710 the Castle of Arecutacua was founded and, in that of the 1740's, threemore forts were founded in the eastern region, and four more in the Chaco.These, together with the presidio at Angostura and the guard at Remolinos onthe left margin of the Paraguay river, secured navigation towards the RiverPlate. From about the same time is the guard post at San Fernando delTebicuary. See Rafael Eladio Velazquez, "Orqarrizacion militar de IaGobernacion y Capitania General del Paraguay," Estudios Paraguayos Vol. V, nQ1 (Junio 1977), p. 45.13.On the royal grant lands for cattle raising of the 1670s, the so-called"mercedes de Riquelme," see Regina Gadelha, As missoes jesui b cas do Itabm:urn e studo das estruturas socioecon6micas coloniais do Paraguai (seculos XVI eXVII (Rio de Janeiro: Paz e Terra, 1980); on the subdivision of these landsand their subletting see Branislava Susnik, "Vision socio-antropol6gica." Thelatest essay on pueblos de indios is Thomas Whigham's "Paraguay's Pueblos deIndios, Echoes of a Missionary Past," in Eric Langer and Robert H. Jackson(editors), The New Latin American Mission History (University of NebraskaPress: Lincoln and London, 1995):157-188.14.The small peasantry's family-sized farms sprung up ~n the sixteenth centuryalongside the relatively larger, privately-owned estates worked mostly bySpaniards with encamienda labor, the corrrnonlyowned lands of the towns of


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31Spaniards and of Indians, and the lands owned by the state. peasantrybecame progressively moreTaxation, Trade, and Development."15.On the "pueblos de negros" see Carlos Pastore, La lucha par la tierra en el

the 1630's. See Pastore, on,

Paraguay (Montevideo, 1972).16.See Rafael Eladio Velazquez, "La poblaci6n del Paraguay en 1682," RevistaParaguaya de Sociologia Ana 9, nQ 24 (Mayo-Agosto 1972):128-143.17.See Anneliese Kegler Krug, "La poblaci6n del Paraguay a traves de loscensos de Azara y Aguirre (1782-1792)," Revista Paraguaya de Sociologia VolII, n Q3 0 ( Ma yo -A go st o 1 97 4) :1 79- 21 3.18.On the behavior of the indigenous population of the Franciscan rrUssions seeGaravaglia, Mercado interno y econamia colonial (Mexico: Grijalbo, 1983), onthat of the Jesuit rrUssions see the recent study by Rafael Carbonell,Estrategias de desarrollo rural en los pueblos guaranies (1609-1767)(Barcelona: Antoni Bosch, 1992), Ch. 12.19. See Garavaglia Mercado interno pp. 353-379L and "Campesinos y sol dados :dos siglos en la historia rural del Paraguay," in Juan Carlos Garavaglia,Econamia, sociedad y regiones (Buenos Aires, Ediciones de la Flor, 1987), pp.19 3- 26 0) .20.In the late eighteenth century Spanish irrrrrrgrationis observed as well. SeeCooney, "Foreigners in the Intendencia of Paraguay," The Americas Vol 39(1982-83), pop. 333-358.21.The crown had -for budgetary reasons- delegated its defenseresponsibilities onto the settlers in exchange for "encomiendas de indios,"which were relatively small and numerous as compared to those of Mexico, forexample. In provinces on other Indian frontiers such as Chile the crownstationed a large standing army and rrrilitarypower was therefore more


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concentrated, and in the hands32

the colonial adrrUnistration. For theencarrUenda in Mexico see Charles Gibson, The Aztec Under Spanish Rule. AHistory of the Indians of the Valley of Mexico, 1519-1810 {Stanford, CA:Stanford University Press, 1964. Chilean rrUlitary organization is discussed byGUnther Khal e , "La encomi enda cerro instituci6n milit.ar en la Arrl!ricahis pa ni c acolonial." in Anuario Colombiano de Historia Social y de la Cultura nQ 9(1979):5-16.22.For the "special dispensation" see Efraim Cardozo, Efemerides de lahistoria del Paraguay (Asunci6n: 1967).23.The governor was Diego de los Reyes Balmaceda. See James Schofield Saeger,"Origins of the Rebellion of Paraguay I" Hispanic American Historical ReviewVol. 52 (May 1972):215-229.24.On the Comuneros revolts, see Saeger, "Origins," Adalberto L6pez, TheRevolt of the Comuneros, 1721-1735: A Study in Colonial History of Paraguay(Cambridge, MA, 1976), and Juan Carlos Garavaglia Econamia, Sociedad yRegiones (Buenos Aires: 1987), pp. 193-260; On the Camuneros Revolt inCorrientes, an easily accessible source is David Rock, Argentina, 1516-1980:From Colonization to the Falklands' War (Berkeley, 1985).25.In this sense it should perhaps not be referred to as a revolt but as arevolution. A s such, the Comuneros revolt or revolution belongs in a classwith other eighteenth century upheavals in the New World that could

conceivably be accounted for in similar theoretical terms. Whether it may becompared with other movements involving land redistribution -like that in ledby Artigas in early nineteenth century Uruguay, or with the Mexican orBolivian revolutions of the twentieth century is a question that will not bec on si de re d h er e.26.This observation is credited to Juan Carlos Garavaglia, Economia, sociedad,


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33Y regiones (Buenos Aires: Editorial de la Flor, 1987).27.On the punishments, see Lopez, The Revolt of the Comuneros.28.See Eduardo Saguier, "La crisis revolucionaria en el Paraguay y elcamportarrdento de la rrrrlicia.La Real Renta del Tabaco como motor de la crisisagraria colonial," Folia historica del Nordeste vol 11 (1995):65-91.29.This account is consistent with Ben Anderson's notion in ImaginedCommunities that the ideology of nationalism tends to precede the formation ofthe nation, captured by the title of the book.30.This observation suggests that the removal of compulsory labor requirementson indigenous people is positively associated with its recovery or,converselYt that the imposition of coerced labor obligations was a majorcontributing cause of depopulation, which implies that the widespread notionthat the indigenous population declined largely because of lack of resistanceto pathogens may be in need of revision.31.On the Seven Years War see George Brown Tindall, America. A NarrativeHistory (W.W.Norton and Co.: New York, 1988), ch 4, pp. 171-176. On Britainencouraging Spanish American emancipation and the rrUlitary and other reformswith which the bourbons responded see Lynch, Spanish Colonial A~nistration.32.However, it would be unwise to conclude that decreased defense needs werealone responsible, or even principally responsible, for the crown's decisionto expel the Jesuits.

33.See Mariluz Urquijo.34.See Benigno Riquelme Garcia, "El Colegio SerrrrnarioConciliar de San Carlosde Asuncion, 1785-1822," in Cuadernos Republicanos nQ 10 (n.d), p. 74 and JuanBautista Rivarola Paoli, "La A~nistracion de Temporalidades en la Provinciadel Paraguay," Historia Paraguaya vol 25 (1988), p.200.35.For suggestions on the political effects of the Reforms see Carlos Pastore,


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"Introduccion a una Historia34del Paraguay en el o XIX," Historia

Paraguaya vol. XVI (1978), pp.103-12691, ftnt. 58.36.For the Bourbonic Reforms see John Lynch, Spanish Colonial AdrrUnistration1782-1810; The Intendent in the Viceroyalty of the Rio de la Plata (London,

..p.

1958). For an analysis of the late colonial econarrdc performance and regionalspecialization in Juan Carlos Garavaglia, "Econcmi,c Growth and RegionalDifferentiation: The River Plate Region at the End of the Eighteenth Century,"Hispanic American Historical Review vol 65, nQ 1 (1985):51-89. Garavaglia doesnot, however, discuss Paraguay. Conditions in pre-Edict Paraguay weredescribed in Governor Pinedo's 1773 and 1777 reports to the king, excerpted inWhite, Paraguay's Autonomous Revolution, pp.17-21. For a summary of conditionsin Paraguay after the Edict see Jerry W. Cooney, " An Ignored Aspect of theViceroyalty of the River Plate," Intercambio Internacional Vol. 2, nQ1(January 1977):10-13. For detailed elaboration see Jerry W. Cooney, Econ~a ysociedad en la Intendencia del Paraguay (Asuncion, 1990). For insightfulcomments and further sources on the rrrilitary reorganization in the Province ofBuenos Aires see Rock, Argentina, in Paraguay, John Hoyt Williams, "From theBarrel of a Gun: Scrne N otes on Dr. Francia and Paraguayan Militarism,"Proceedings of the American Philosophical Society Vol. 119, nQ 1 (February1975):73-86, and Jerry W. Cooney, "The Paraguayan Independence Movement, 1806-1814," (Ph.D. dissertation, University of New Mexico, Albuquerque, NM, 1971).37.See PIa, Hermano Negro and Oscar Creydt, Formacion Historica de la NacionParaguaya for reports that the encorrriendawas abolished in 1803. That bothprivate encorrriendas and the use of coerced laborers in state enterprises mayactually have continued past the encomiendas' abolition is suggested by thefact that, after Independence, an early national government took pains to


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35reiterate, in 1812, that the encomiendas were illegal.38 .Forts Borbon and San os / on a 11 on theParaguay River, the second, on the River Apa, See Velazquez, "Organizacionmilitar," p. 45.39.Twelve under the so-called Down-River Regiment, eight under the Up-RiverRegiment r with a total 235 men. "Las guardias de Costa Abajo, que cubrianhasta cerca de la confluencia con el Parana, eran, a partir de Asuncion,Lambare, San antonio, Vil1eta, Angostura y Macaipiramt cada una de elIas con 8hombres de efectivo; Ibiaca y Lobato con 6; Remolinos con 20; Herradura, cercade la boca del Tebicuary, con 18; Fortin (San Fernando?), posiblemente en laisma boca, con 6; Tacuaras, con 15; su Forti (de Tacuaras?) con 5; NeembucU/con 20 y el Boqueron, con 12; 10 que arroja un total de 156 hombres. Las decosta Arriba alcazaban hasta la poblacion de San Pedro de Ycua-mandiyU, 10 queindica que Villa Real se hallaba servida pro sus propias milicias, en tantoque Borbon y San Carlos constituian guarniciones aparte. Eran las referidasguardias las del castillo (antes, San Ildefonso) y del Penon (hOYt Piquete-cue) con 6 hombres cada una; Arecutacua, con 8; Manduvira, ya mencionada,tierra adentro, con 15; Ypyta, con 20; Cuarepoti, con 6; Pedernal con 12;Ycua-rrandi.yu con 6; totalizando 79 (68)." See Velazquez, Orqa rr iaa c' ion milit. ar,p . 46-47.40.Governor Diez de Andino, between 1664 and 1771 ordered the building of 140war canoes, a ship called "San Jose" and a barco longo. Local industrycontinued to provide river vessels to improve vigilance and security of rlvernavigation, and in the eighteenth century, "de sumacas artil1as, balandras yhasta de una fragata." See Velazquez, "Organizacion militar," p. 47.4 1. Se e V el az qu ez , " Or qa ni .a ac i. on m il it ar I" p. 47.42.See Pastore, "Trade Contraction and Economic Decline."


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43.See Jerry W. Cooney,3 6

to the Yerbales. The Exploitation theParaguayan Frontier, 1776-1810, Donnay ( Contested Ground(orthccrning). For the late eighteenth century boon see Cooney, "AnA sp ec t. "44.One arroba equals twenty five pounds. For the 1776 figure see EfraimCardozo, El Paraguay colonial: las raices de la nacionalidad (Buenos Aires,1959), p.106; for the 1792-1796 averages see "Tabla de Ccrnercio," inFelix de Azara, Descripcion e historia del Paraguay y del Rio de la Plata inBiblioteca Indiana. Viajes por la America del Sur Vol. 2 (Madrid: 1847, 1962),pp. 313-314), and for the 1803-1807 averages see "Razon de los Tercios deyerva que salieron de esta Provincia en el ultimo quinquenio," Ministros deR.l Hacienda Pedro de Oscariz and Jose de Elizalde, Asuncion, November 28,1898, in ANA-NE 1790, both cited in Jerry W. Cooney, "Serving the Hinterland:The Comnercial Rise of Asuncion, 1776-1810," SECOLAS Annals vol. XVIII (March1987), p. 90, footnote 46 and p. 91, footnote 48, respectively. Cooney alsoprovides figures on total exports and imports.45.For the financial activities of the Church see White, Paraguay's AutoncrnousRevolution. Asuncion merchants could pay for their purchases in Buenos Aireswith "libranzas," drafts drawn against their balances at the Royal Tobaccomonopoly in Asuncion which could be presented for payment at the Renta'soffices in Buenos Aires.46.For the expansion of hardwood and tobacco production see Jerry W. Cooney,"AColonial Naval Industry: The Fabricas de Cables of Paraguay", Revista deHistoria de America vol. 87, (Enero - Junio 1979) and "Forest Industries andTrade in Late Colonial Paraguay," Journal of Forest Industries Vol.23, nQ4(October 1979):186-197. The modern economic theory of cammon property resourceuse originates with H. Scott Gordon, "The Economic Theory of a Corrmon Pool


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37Resource: The Fishery ,n Journal of Political Econany . LXII (47.That iS I Costa48.See Rafael Elamo Velazquez, "Organizaci6n rrdlitar de la Gobemaci6n yCapi tania General del Paraguay," Estudios Paraguayos Vol. V I nQ1 (Junio1977):25-68 for the expansion of forts and Ferrer de Arrellaga, Expansi6ncolonizadora for rrdlitary status and land ownership in Concepci6n.49.See Thanas Whigham, "Cattle Raising in the Argentine Northeast: Corrientes,c. 1750-1870," Journal of Latin American Studies, Vol. 20.50.On imnigration, Jerry W. Cooney, "Foreigners in the Intendencia ofParaguay", The Americas vol XXXIX (1982-83):333-358; on internal rrdgration,Rene Ferrer de Arrellaga, Un siglo de expansi6n colonizadora: los origenes deConcepci6n (Asunci6n, 1985); Juan Francisco de Aguirre, "Diario .." Revista dela Biblioteca Nacional de Buenos Aires nU. 1 7- 20 , 1 949 -5 1.On the new towns, Rafael Eladio Velazquez El Paraguay en 1811 (Asunci6n,1965); Jose Luis Mora Merida, "La demografia colonial paraguaya," Jahrbuch furGeschichte von staat, Wirtschaft, und Gessellschaft Lateinamerikas, Band II(1974), p. 76; Ferrer de Arrellaga, Expansi6n colonizadora; Alfredo Viola,Origen de Pueblos del Paraguay (Asunci6n, 1986). See also Jerry W. Cooney,"The Yerba Mate and Cattle Frontier of Paraguay 1776-1811: Social, Economic Iand Political IIT!Pact."Paper presented at the XIV Int'l Congress of the LatinAmerican Studies Association, New Orleans, LA, 17-19 March 1988.51.Peasants devoted themselves to agriculture during the fall and winter. Theysowed tobacco in Mayor June and by September they were usually finishedtransplanting t he seedlings l "though the operation sanetimes continued for twomore months." They labored in the yerba trade during the hottest months of theyear, October through May. For the timing of tobacco activities, see ThomasL. Whi gham I "The Pol H i cs of River Corrmerce in the Upper Pl ata, 17 60-1865/'


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(Ph.D. Dissertation! Stanfordharvesting! see Reber!

r 1986), p. 175, of yerba38

." p. 33.

52.This use of slaves was fairly cammon in cattle ranches throughoutgrazing lands of the mesopotamia and the pampas. See Samuel Amaral, "RuralProduction and Labour in Late Colonial Buenos Aires, n Journal of LatinAmerican Studies, Vol 19, Part II, pp. 235-278. Contrast with John HoytWilliams, The Rise and Fall of the Paraguayan Republic, 1800-1870 (Austin:University of Texas Press, 1979).53.See Lynch, Spanish Colonial AdrrUnistration, p.49.54. That same private encamiendas ~ay have persisted after they were legallyabolished is suggested by the fact that after Spanish rule ended, an earlynational government reiterated the encamiendas' evolution, in 1812. Africanslavery remained in force as well, both de jure and de facto. For stateenterprises, see Jerry W. Cooney, "A Colonial Naval Industry: The Fabricas deCables of Paraguay"! Revista de Historia de America vol. 87, (Enero - Junio1979); "Paraguayan Astilleros and the Platine Merchant Marine! 1796-1806/' TheHistorian (1980):55-74; and "La Direcci6n General de la Renta de Tabacos andthe Decline of the Royal Trade Monopoly in Paraguay. 1779-1800," ColonialLatin American Historical Review Vol I, nQl (1992):101-116; for a hint thatstate enterprises relied on indigenous coerced labor see James SchofieldSaeger! "Survival and Aboli t.ion : The Eighteenth Century ParaguayanEncamienda." The Americas Vol 28, (July), pp.59-B5. For the private sedor'suse of African slaves see Josefina PIa, Hermano Negro. La Esclavitud en elParaguay (Madrid: 1972).55.For some of the state enterprises see Cooney, "A Colonial Naval Industry,"and for the escheating of the encamienda to the crown see Saeger, "Survivaland Abolition, p. 77.


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3956.See Cooney, "Paraguayan Asti 11 eros r " for labor subsidies to shipyards.57 .Se e C oo ney ,58.For an analysis of the causes and significance of the dissolution oftowns see Mario Pastore, "Trade, Wars, Institutional Innovation, and Econorti cDevelopment: Frcrn state Socialism to Liberalism in Paraguay, 1845-1920,"Chapter 6 in Mario Pastore, Trade, Endowments, Institutions and Development InParaguay (ms).59.See El Monedero de los Andes. Those who identified the relative scarcity ofsilver coin with the absence of a market may have overstated the degree ofself sufficiency of this economy.60.For silver hoarding, see Jerry W. Cooney, "The Carrera del Paraguay, 1770-1810: Lifeline of the Platine Littoral," paper presented at the SouthernHistorical Association Meetings, 1988. For statements on price inflation seeA gui rr e, " Di ar io. ,n cited in Cooney, "Serving the Hinterland: p.91, footnote56,61.See Jerry W. Cooney, "Cr io ll os and Peninsulares in the Intendencia ofParaguay: Elite Acccrnodation in Place of Conflict," Dpt. of History,University of Louisville, (n.d.).62.Product estimates like those proposed for the United States by Gallman andDavid have been put forth for Mexico by Coatsworth as well as by Richard andLinda Salvucci for Mexico, for EI Salvador by Lindo Fuentes. However, I amaware of no such series for the Viceroyalty of the River Plate or any ofcountries that emerged in the region after its dissolution, though Coria hasmade an attempt for Mendoza in the first decade of the nineteenth century. SeeRobert Gallman, "The Pace and Pattern of American Economi c Growth," in LanceDavis and et aI, American Econanic Growth (1972):33--39; Paul David, "TheGrowth of Real Product in the United States Before 1840: New Evidence,


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c on tr ol le d C on je ct ur es r" Journal of Econcrnic History vol. XXV I r nQ 2, (June1967); John Coatsworth rAmerican Historical Review (1978); Richard and Linda Salvucci; "Lasconsecuenci as econ6micas de La independencia mexi cana ;" in Prados and Amaral,La independencia americana (Madrid, 1993):31-53; Hector Lindo Fuentes,"Nineteenth Century Economcm.ic History of El Salvador/' (Ph.D. dissertation,University of Chicago, 1984); and Luis A. Coria, "Determinacion del P.B. I deMendoza para 1807," in Anales del A.A.E.P, XXIII Reunion Anual Vol. 1., 1988.63.The Real Renta also had rrrilitary implications. Tobacco growers who agreedto sell it their tobacco could be exempted of rrdlitia duties. See Cooney, "LaD ir ec ci on G en er al ."64.See Mario Pastore, "Trade Contraction and Econcrn:i.cDecline," pp. 539-540.


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Figure 1Main Settlement Areas North and East of Asunci6n. ca. 1628

Source: 1a {1983, p. 123)

?OBLACIONESESPAI'loLASPQ8LAOOS DEENCOMIENOAAEOUCCIONesJESUI1ICAS


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Table 1 .P arag uay 's P op ulatio n, In dig en ou s an d N on -In dig en ou s: 1 68 2-1 81r..or, 1761 1 - { ) C , 1846IUU,," f : : J . ' : J

Popu la tio n con sid er ed 30323 52647 32018 1200mdiqenous

Popu la tio n con sid er ed 8943 "...." "1 76052 237662vi-Jv,non- ind iqenous

Tnt"! I oooutat ion 39266 85178 108070 ;1~nn6rl,'W ' ,.." f " ' W " " .G...v I ' : " w ! o o . : : .

S om c e: G ara vag lia (1 98 3, p .2 01 l.


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Legend:

Figure 2Indjan Towns and Franciscan Reductions, 1635-1670.

Source: Garavaglia (1983. p. 137)

solid circles = towns whose location 1S fairly well knownblank circles = towns whose location 1S uncertain.


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Table 2-P;


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1.'Tl'DlO DE LAS ESTRATEGIAS

Las rmsrones jesuiricas en Sudamerica fueron principalmente de frontera,A las relacionadas con eI territorio de Brasil cabe IIgregar Ills del Orinoco.(Cfr. Bruno, o. cit., pag. 254.)


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GrEvoludon del total de almss de los 30 guaranies

Habitamesen miles1401 3 613212 812412011 611210 81 0 410096928884807672

1690 1695 1700 .1705 1710 1715 1720 1725 1730 1735 1740 1745 1750 1755 1780 1785

f


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Evolueiondel total de almas de los 30 pueblos guaraniesHabitanlesen miles1 4 01 3 613 21 2 81241201161121081 0 410096928884807672

1690 1695 1700 1705 1710 1715 1720 1725 1730 1735 1740 1745 1750 1755 1780 1785


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Table 3S lave an d Free C olored P opu latio n, 1 682 -1 846popu k,t;!", ' 1 ' )1 .1 .I...'U.'VI ..

Total

Slaves 1734

F re e C ld s n.d .

Tota!

1799Total

4 .4 4598

n.d. 7948

1~')I=\A!"'....~'t!)

4.2

11.6

Total

7893

9319

7.2


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" . . . . . . . . . Table 4Tow ns Founded in Paraguay in the Late C olonial Period (1750-1800 l.Name of Tow n Year o f Found ing Population

Lambare 1766 825Lirnpio 1785 1769Concepcion i77~; 1551l cuamandiyu 1786 979Hifltif 1773 ~ 1 " ' " ,, = ,, , .. ,_ .. _,; I.:. 'I.J': 'Yacaouazu 1785 886...':.L_~::i _.I! .~_~Bobv 1789 ,1')7'IJ r..r y ~ i : . . . I'Arroyos 1781 1i'p'Y"ii c : : . ' - iCany 1770 C:&:;; i lUJ'T: 1_ : J .. .. . _ _ : , . : ""~'""'\.-I ..-rlr-.IDlljlllllll I/O":'! 00::\../Caacupe 1770 - : : - " ' . r - ,lv0Cuarepo tv 1783 540Par equan 1775 507San Lorenzo 1 7 7 ' : 5 1720Remol inos 1777 458Quiquiho 1777 1136~~,Acaay i70':1 0&:;'=';:uv U..JUC a a . J ) U C U i7Q7 (.;:1;0liVi VJJNeemoucu (Piiar 1~'7n '1 il"){'\III. J IlvVl .aureles 1790 621Tacueras 1791 520

Source: Azara (1961.), c ited in M ora M erida {1974L p.76


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from A sun cio n an d th e Jesu it M ~ sion s

Year Paraguay Tota lin arrobas, 1 anoba=25 I bs .

Missions

1 6 7 5 2 6 9 4 2 2495 2 9 4 3 71 6 7 6 3 0 7 1 6 1 8 4 6 " r , & : : r . . ',.._Ji,_ .. : 'Oi.. .1 6 7 7 n . e l . 172~3 n.d .1678 n.d . 111&:\ n . . - lI I ...; , . .-.1679 ici: Q:h.Of1 : ) /~ 1 C i( : 2I'JVVV "_ao_'oJV c.,."T,jViCOl\ ; C ' (' : P l" ' f . .1 ~ ..1;:/' 24388'UUV I'.).::t


51/51

Itflll

. , . r i > a ("rri>u)T,. l5.. r,l1(".,.Ill)8....r111(\:llrlU)

,n. ,c,'74~

Mill; i~l ("n,u)"'"rdl f~ MlIlb I:""Lllr~ "I"n~l ("""al) ,~' : . ' " ' : l r. . r e:!.ftl.11 ,.Ilknkl ('..."Ar..lOrw"l Tii"L;..il

'JKrtv,'h 11~'I.:.lOllrt '..h.. llp~.l

~,I.!';'p.!, ( rr:!:p.1) 441

O II lY J Ar lLin."

'~4

H"n,uIn'ilT~tlLl CI~'lt1N.t VI II ". ~f ~ ::~-:-r11Valul' - :- f Ir:~p:rt1

.- .-

t-n-:. ' 1 , , 1 " . (~1~1)i~ rlarrot)a ~::~!~i r . . . ." . . , . ,~~.~~

1 : : : ! " / " . . .arJ. ~,'i'~'1 r / " . ."&r1'. ;;;I:~~iNr/unlt J7

" .s ~. "e rt",'.r. '404 r . / ' ,V1l ~'4~ r./vIlfa ~!. . r/"/Iull ~!-. . . r ~O4 ~. ,~

4 ' : 1 F ~ J ! . 1 : 1~ ~. ' ~OCI- P '1 ' ... . .J_W;; P 'CI1 P !I:lr! . r !14':'J r ,3:;:,4 r

~ - r :[ F ~I:I10 ,' . s e o, .. . . . :. I' so": 1 ~:I4Q 4 - : 14 j:lltrr:b,. l,?,I!.~

i~ r , iarr - : -b . . :;''':'k~! ~)lIrr:I:1ll 47'

~ r l l . r i w b - 1 I i , ,. . . . . . . - .I...........~ F ! e : .l!' r l v l L r A 47:i),~r/ltrr.:.I:'A 4~r::,~

" , - . r .. . ~h :01,-~ F. / i>I Ir r - ' 44e p. l"r r : I : . . 1~. F ' :; ,;; ~ 4.........I' ,_

~>..,c,,~4!;':'1 I /~~I:Uj':l I

e 7 4 e ,' :::::i~41!.'~~i":r!i7'7~~

::':'Uf~.: . J I , z. . r a , Cr.l~rlp-:lc'n hllt-:'fllt -:~I"llflllJUIl'/, \0',:-11.1:j:!1!14

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