Why Nations Fail: The Origins of Power, Prosperity, and Poverty

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    Buenos Aires, the “Paris of South America,” a city of wide European-style boulevards based on the great agricultural wealth of the Pampas, was not resettled until 1580. The abandonment of Buenos Aires and the conquest of the Guaraní reveals the logic of European colonization of the Americas. Early Spanish and, as we will see, English colonists were not interested in tilling the soil themselves; they wanted others to do it for them, and they wanted riches, gold and silver, to plunder.
F ROM C AJAMARCA …
    The expeditions of de Solís, de Mendoza, and de Ayolas came in the wake of more famous ones that followed Christopher Columbus’s sighting of one of the islands of the Bahamas on October 12, 1492. Spanish expansion and colonization of the Americas began in earnest with the invasion of Mexico by Hernán Cortés in 1519, the expedition of Francisco Pizarro to Peru a decade and a half later, and the expedition of Pedro de Mendoza to the Río de la Plata just two years after that. Over the next century, Spain conquered and colonized most of central, western, and southern South America, while Portugal claimed Brazil to the east.
    The Spanish strategy of colonization was highly effective. First perfected by Cortés in Mexico, it was based on the observation that the best way for the Spanish to subdue opposition was to capture the indigenous leader. This strategy enabled the Spanish to claim the accumulated wealth of the leader and coerce the indigenous peoples to give tribute and food. The next step was setting themselves up as the new elite of the indigenous society and taking control of the existing methods of taxation, tribute, and, particularly, forced labor.
    When Cortés and his men arrived at the great Aztec capital of Tenochtitlan on November 8, 1519, they were welcomed byMoctezuma, the Aztec emperor, who had decided, in the face of much advice from his counselors, to welcome the Spaniards peacefully. What happened next is well described by the account compiled after 1545 by the Franciscan priest Bernardino de Sahagún in his famous Florentine Codices.
    [At] once they [the Spanish] firmly seized Moctezuma … then each of the guns shot off … Fear prevailed. It was as if everyone had swallowed his heart. Even before it had grown dark, there was terror, there was astonishment, there was apprehension, there was a stunning of the people.
    And when it dawned thereupon were proclaimed all the things which [the Spaniards] required: white tortillas, roasted turkey hens, eggs, fresh water, wood, firewood, charcoal … This had Moctezuma indeed commanded.
    And when the Spaniards were well settled, they thereupon inquired of Moctezuma as to all the city’s treasure … with great zeal they sought gold. And Moctezuma thereupon went leading the Spaniards. They went surrounding him … each holding him, each grasping him.
    And when they reached the storehouse, a place called Teocalco, thereupon they brought forth all the brilliant things; the quetzal feather head fan, the devices, the shields, the golden discs … the golden nose crescents, the golden leg bands, the golden arm bands, the golden forehead bands.
    Thereupon was detached the gold … at once they ignited, set fire to … all the precious things. They all burned. And the gold the Spaniards formed into separate bars … And the Spanish walked everywhere … They took all, all that they saw which they saw to be good.
    Thereupon they went to Moctezuma’s own storehouse … at the place called Totocalco … they brought forth [Moctezuma’s] own property … precious things all; the necklaces with pendants, the arm bands with tufts of quetzal feathers, the golden arm bands, the bracelets, the golden bands with shells … and the turquoise diadem, the attribute of the ruler. They took it all.
    The military conquest of the Aztecs was completed by 1521. Cortés, as governor of the province of New Spain, then began dividing up the most valuable resource, the indigenous population, through the institution of the
encomienda
. The
encomienda
had first appeared in fifteenth-century Spain as part of the reconquest of the south of the country from the Moors, Arabs who had settled during and after the eighth century. In the New World, it took on a much more pernicious form: it was a grant of indigenous peoples to a Spaniard, known as the
encomendero
. The indigenous peoples had to give the
encomendero
tribute and labor services, in