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Coerced indigenous labor and free mestizo peasantry: a property-rights, rent-seeking view of colonial Paraguay


  • Pastore, Mario H.


Here I first survey the evidence on forced and free labor in a resource-abundant, sparsely settled Spanish-American colony on the American Indian and Portuguese frontiers. The focus among forced labor forms is on the compulsory labor service obligations the Spanish exacted as tribute from the indigenous people they eventually resettled in segregated towns. The “encomienda” and “congregación,” respectively, were justified by right of conquest and in exchange for the protection and conversion to Catholicism of the new subjects of the Crown. Among free labor forms I focus on the free peasantry that arose in the lands left vacant as the indigenous population declined. Free peasants included the American born offspring of Spanish parents (creoles), as well as the “mestizo” offspring of Spanish and indigenous parents, which in distant and isolated Paraguay had led to legally consider mestizos as Spaniards, not subject to paying tribute in the form of labor services. I then offer a conceptual framework based on Domar’s hypothesis on the causes of slavery or serfdom (which I previously reviewed in Pastore 1990), augmented to include property-right and rent-seeking considerations. Next, I use this conceptual framework to interpret the evidence presented earlier. Subsequently I find the analysis to be robust, particularly in connection with the previously expressed contention that the labor services “encomienda” in Paraguay were a tax-farming scheme. Last, I recapitulate and gather the conclusions.

Suggested Citation

  • Pastore, Mario H., 1990. "Coerced indigenous labor and free mestizo peasantry: a property-rights, rent-seeking view of colonial Paraguay," MPRA Paper 27150, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27150

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    References listed on IDEAS

    1. Alchian, Armen A. & Demsetz, Harold, 1973. "The Property Right Paradigm," The Journal of Economic History, Cambridge University Press, vol. 33(01), pages 16-27, March.
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    In the Spanish american colony of Paraguay; inland and on the Indian and Portuguese frontiers; tribute extraction from indigenous people in the form of labor services took the form of the encomienda (from the Latin commenda); mit'a; and yanaconazgo. Because of the paucity of Spanish immigration; however; children of Spanish and indigenous parents (the so-called mestizos); were considered Spanish and exempt from the encomienda. However; in exchange for granting encomiendas to its worthiest subjects the Crown had required them; as well as colonists of lesser means to provide military service for their own defense against Indian and Portuguese attacks; thus saving the expenditure of royal revenues . A small peasantry free from labor services obligations but subject to military contributions to defense thus developed. In a resource-abundant frontier setting; therefore; a free mestizo peasantry thus developed; even though in similar circumstances elsewhere these were subject to the same compulsory labor as those to those imposed on indigenous people.;

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • N56 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Latin America; Caribbean


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