FOR TWO HUNDRED YEARS, FROM the mid-1500s through the mid-1700s, the world that Spain had made had struggled against fiscal failure. The empire whose motto had once been a rousing Plus Ultra! had glutted world markets with silver, thwarted the economic growth of its colonies, and brought itself more than once to the brink of financial ruin. Nowhere was Spain’s misguided fiscal strategy more evident than in the streets of Caracas in the late 1700s, where a deep rage against the madre patria was on the rise.
The case of the Spanish American colonies had no precedent in modern history: a vital colonial economy was being forced, at times by violent means, to kowtow to an underdeveloped mother country. The principal—as Montesquieu had predicted a half century before—was now slave to the accessory. Even as England burst into the industrial age, Spain made no attempt to develop factories; it ignored the road to modernization and stuck stubbornly to its primitive, agricultural roots. But the Bourbon kings and their courts could not ignore the pressures of the day: Spain’s population was burgeoning; its infrastructure, tottering; there was a pressing need to increase the imperial revenue. Rather than try something new, the Spanish kings decided to hold on firmly to what they had.
At midnight on April 1, 1767, all Jesuit priests were expelled from Spanish America. Five thousand clerics, most of them American-born, were marched to the coast, put on ships, and deported to Europe, giving the crown unfettered reign over education as well as over the widespread property of the Church’s missions. King Carlos IV made it very clear that he did not consider learning advisable for America: Spain would be better off, and its subjects easier to manage, if it kept its colonies in ignorance. Absolute rule had always been the hallmark of Spanish colonialism. From the outset, each viceroy and captain-general had reported directly to the Spanish court, making the king the supreme overseer of American resources. Under his auspices, Spain had wrung vast quantities of gold and silver from the New World and sold them in Europe as raw material. It controlled the entire world supply of cocoa and rerouted it to points around the globe from storehouses in Cádiz. It had done much the same with copper, indigo, sugar, pearls, emeralds, cotton, wool, tomatoes, potatoes, and leather. To prevent the colonies from trading these goods themselves, it imposed an onerous system of domination. All foreign contact was forbidden. Contraband was punishable by death. Movement between the colonies was closely monitored. But as the years of colonial rule wore on, oversight had grown lax. The war that had flared between Britain and Spain in 1779 had crippled Spanish commerce, prompting a lively contraband trade. A traffic of forbidden books flourished. It was said that all Caracas was awash in smuggled goods. To put a stop to this, Spain moved to overhaul its laws, impose harsher ones, and forbid Americans even the most basic freedoms.
The Tribunal of the Inquisition, imposed in 1480 by Ferdinand and Isabel to keep a firm hold on empire, was given more power. Its laws, which called for penalties of death or torture, were diligently enforced. Books or newspapers could not be published or sold without the permission of Spain’s Council of the Indies. Colonials were barred from owning printing presses. The implementation of every document, the approval of every venture, the mailing of every letter was a long, costly affair that required government approval. No foreigners, not even Spaniards, could visit the colonies without permission from the king. All non-Spanish ships in American waters were deemed enemy craft and attacked.
Spain also fiercely suppressed American entrepreneurship. Only the Spanish-born were allowed to own stores or sell goods in the streets. No American was permitted to plant grapes, own vineyards, grow tobacco, make spirits, or propagate olive trees—Spain brooked no competition. It earned $60 million a year, after all (the equivalent of almost a billion today), by selling goods back to its colonies.
But, in a bizarre act of self-immolation, Spain enforced strict regulations on its colonies’ productivity and initiative. Creoles were subject to punishing taxes; Indians or mestizos could labor only in menial trades; black slaves could work only in the fields, or as domestics in houses. No American was allowed to own a mine; nor could he work a vein of ore without reporting it to colonial authorities. Factories were forbidden, unless they were registered sugar mills. Basque businesses controlled all the shipping. Manufacturing was rigorously banned, although Spain had no competing manufacturing industry. Most galling of all, the revenue raised from the new, exorbitantly high taxes—a profit of $46 million a year—was not used to improve conditions in the colonies. The money was shipped back, in its entirety, to Spain.
Americans balked at this. “Nature has separated us from Spain by immense seas,” exiled Peruvian Jesuit Viscardo y Guzmán wrote in 1791. “A son who found himself at such a distance would be a fool, if, in managing his own affairs, he constantly awaited the decision of his father.” It was as potent a commentary on the inherent flaws of colonialism as Thomas Jefferson’s “A Summary View of the Rights of British America.”
Far Outliers 