4.4.F: Continuities and Changes in Economic and Labor Systems 1450 to 1750

cash (2)

AP Theme

Economic Systems

Learning Objective 4F

Explain the continuities and changes in economic systems and labor systems from 1450 to 1750.

Historical Development 1

Despite some disruption and restructuring due to the arrival of Portuguese, Spanish, and Dutch merchants, existing trade networks in the Indian Ocean continued to flourish and included intra-Asian trade and Asian merchants.

Historical Development 2

Newly developed colonial economies in the Americas largely depended on agriculture, utilized existing labor systems, including the Incan mita, and introduced new labor systems including chattel slavery, indentured servitude, and encomienda and hacienda systems.

Key ideas

The Indian Ocean trade network and peasant agriculture remained important economic and labor systems.

Europeans established new maritime trade routes across the Atlantic and Pacific oceans.

Europeans established new colonial economies in the Americas.

Colonial economies centered around mining and cash crop agriculture.

Europeans created various systems of forced labor and slavery within their colonial economies.


There Were Significant Continuities in Economic and Labor Systems

European maritime expansion brought substantial changes to global economic and labor systems. Despite these changes, there were significant continuities within these systems.

Existing Trade Networks in the Indian Ocean Continued to Flourish

The arrival of Portuguese, Spanish, and Dutch merchants in the Indian Ocean led to a restructuring of trading relationships in the region. While Europeans sought control over Indian Ocean commerce, they never achieved dominance over trade in the area. European powers successfully moved some goods through their trading posts and collected taxes on certain merchant vessels. However, traditional Asian trading powers persisted and continued to thrive in the Indian Ocean commercial network. Much of the trade in the region did not include European merchants, and goods moved with Asian merchants and between Asian communities and peoples.

Traditional trading powers that continued to persist in Indian Ocean trade included:  

  • Swahili Arabs
  • Omanis
  • Gujaratis
  • Javanese

Peasant Agriculture Remained the Dominant Economic System

While commerce and global exchange networks continued to expand in this historical period, the vast majority of the world’s population continued to engage in peasant agriculture. Day to day, most people worldwide worked to produce just enough for their family’s survival.

There Were Significant Changes in Economic and Labor Systems

Global trade and economic networks underwent massive changes between the 15th and 18th centuries as European explorations resulted in new maritime trade networks and Europeans conquered the economies of the Americas. 

New Trade Routes Established Across the Atlantic

Before the 15th century, there was no sustained trade across the Atlantic. With the European rediscovery of the new world, Europeans established new commercial trade routes across the Atlantic that connected the Americas to Africa and Europe. The movement of people, animals, foods, products, and diseases on the Columbian Exchange resulted from these new Atlantic trade and communication networks.

Europeans established new colonial economies in the Americas

As Europeans conquered the new world, they established new colonial economies in the Americas. These new economies stretched across North and South America and were no longer under the control of native peoples, and Europeans had near domination over profit and labor. In these new colonial economies, most non-European peoples were simply used and exploited for European gain. Major economic activities in these new colonial economies were mining precious metals such as silver and plantation agriculture.

Agricultural plantations: European agricultural plantations quickly spread across the New World. Plantations are large commercial farms that produce products for commerce and export. The items made are not for the personal consumption of those living on the plantation. The Portuguese set up the first plantation in the Americas in Brazil. By the 18th century, the Spanish, Dutch, French, and English also maintained plantation economies across their conquered territories in the Americas. 

Major cash crops: Sugar and tobacco plantations were the first significant cash crops established in the Americas, and the Caribbean islands became one of the world’s largest sugar-producing regions. Later production in the Americas expanded into coffee, cotton, and cacao, and bananas. 

Mining operations: The Spanish established mining operations in Spanish America. The most famous of these mines was Potosi in modern Bolivia. At one point, the Spanish mined the vast majority of the world’s silver supply from Potosi. The Spanish utilized forced and slave labor systems to staff mines like Potosi. 

Europeans established various systems of forced labor in their American colonial economies

Plantation and mining operations were labor-intensive. Production on plantations required a lot of workers and the conditions on plantations were harsh. The new economies led to mass human rights and labor abuses. Initially, European plantation owners forced natives to work on the plantations. However, natives could easily escape. Natives also quickly died due to the spread of diseases that had reached the Americas from Europe. As a result, Europeans introduced new forms of labor into the Americas.

Mita Labor

In the area that had been the Inca Empire, the Spanish continued to use the Incan mita labor system with modifications that turned it from a system that collected taxes through labor to one that worked people to death in slave conditions.

Mita under the Inca: The Incan mita was a rotating group of workers who labored for the state as a form of taxation. Men between the ages of 15 to 50 performed Inca Mita labor. Under the Inca, Mita labor was short-term and only performed when the men were not working on their own family farms. 

Mita under the Spanish: However, the Spanish required villages to provide a set number of people for mita labor. Often Spanish mita labor was in Spanish mine, and the work was dangerous and exhausting. Many people never returned from Mita labor performed under the Spanish. 

Indentured servitude

Indentured servitude is a form of labor, sometimes involuntary. A person who took out a loan (an indenture) agrees to work without salary for the lender for a specific number of years. European indentured servants began arriving in the Americas in the 16th century.

  • Much of the European population in the Caribbean and Latin and South America came to the Americas as indentured servants.
  • After their terms of service ended, most indentured servants stayed in the Americas. Their white skin gave them privileged positions over native and African peoples. While indentured servants’ living conditions were rough, they had legal protections that prevented them from the worst forms of exploitation, brutal work, and physical violence.

Encomienda was a system in which the Spanish gave conquistadors and other Spanish settlers land grants in the Americas and the Philippines.

  • On these land grants, cash crops were grown for the profit of the landowners. 
  • The Spanish allowed holders of land grants to exploit the labor of natives living on the land. 
  • These forced labor systems brought natives into close contact with the Spanish, resulting in mass death from overwork and disease. Because the monarch granted the encomienda, they could also be taken back by the monarch. As a result, they were not necessarily private property. However, in practice, encomiendas were rarely taken back.

Haciendas were similar to encomiendas, except they were not land grants given by monarchs but were private property.  

  • Like encomiendas, haciendas exploited both native and slave labor for the profit of their white European owners. 
  • Haciendas were often plantations producing crops for both local consumption and international markets. 
  • Some haciendas also contained mines and factories that produced goods. Hacienda labor was a mix of paid laborers and debt farmers. 
  • While there were some slaves, hacienda owners paid most workers near-poverty wages. Many farmers were in a consistent state of debt to the hacienda owner, and this debt prevented them from ever leaving and reduced the indebted farmers to near slaves. 
Chattel slavery

Europeans first brought African slaves to the Americas in the 16th century. 

  • Chattel slavery in the Americas was different than other slave systems throughout history in its high level of brutality. Europeans stripped slaves in the Americas of all rights. They were slaves, and their children would be slaves, and they were property to be bought and sold. Freedom was nearly unattainable.
  • When the first African slave ship arrived in Jamestown in the British colonies in North America, there were already 500,000 enslaved Africans working in brutal forced labor systems across the Caribbean and South America. 
  • Plantation agriculture required large labor forces for the back-breaking labor. The death rate among workers from extreme work in tropical conditions, disease, and mistreatment was high.