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

effective exploitation of indigenous labor. The major historical difference between Acomayo and Calca is that Acomayo was in the catchment area of the Potosí
mita
. Calca was not.
    In addition to the concentration of labor and the
mita
, de Toledo consolidated the
encomienda
into a head tax, a fixed sum payable by each adult male every year in silver. This was another scheme designed to force people into the labor market and reduce wages for Spanish landowners. Another institution, the
repartimiento de mercancias
, also became widespread during de Toledo’s tenure. Derived from the Spanish verb
repartir
, to distribute, this
repartimiento
, literally “the distribution of goods,” involved the forced sale of goods to locals at prices determined by Spaniards. Finally, de Toledo introduced the
trajin
—meaning, literally, “the burden”—which used the indigenous people to carry heavy loads of goods, such as wine or coca leaves or textiles, as a substitute for pack animals, for the business ventures of the Spanish elite.
    Throughout the Spanish colonial world in the Americas, similar institutions and social structures emerged. After an initial phase oflooting, and gold and silver lust, the Spanish created a web of institutions designed to exploit the indigenous peoples. The full gamut of
encomienda
,
mita
,
repartimiento
, and
trajin
was designed to force indigenous people’s living standards down to a subsistence level and thus extract all income in excess of this for Spaniards. This was achieved by expropriating their land, forcing them to work, offering low wages for labor services, imposing high taxes, and charging high prices for goods that were not even voluntarily bought. Though these institutions generated a lot of wealth for the Spanish Crown and made the conquistadors and their descendants very rich, they also turned Latin America into the most unequal continent in the world and sapped much of its economic potential.
 … TO J AMESTOWN
    As the Spanish began their conquest of the Americas in the 1490s, England was a minor European power recovering from the devastating effects of a civil war, the Wars of the Roses. She was in no state to take advantage of the scramble for loot and gold and the opportunity to exploit the indigenous peoples of the Americas. Nearly one hundred years later, in 1588, the lucky rout of the Spanish Armada, an attempt by King Philip II of Spain to invade England, sent political shockwaves around Europe. Fortunate though England’s victory was, it was also a sign of growing English assertiveness on the seas that would enable them to finally take part in the quest for colonial empire.
    It is thus no coincidence that the English began their colonization of North America at exactly the same time. But they were already latecomers. They chose North America not because it was attractive, but because it was all that was available. The “desirable” parts of the Americas, where the indigenous population to exploit was plentiful and where the gold and silver mines were located, had already been occupied. The English got the leftovers. When the eighteenth-century English writer and agriculturalist Arthur Young discussed where profitable “staple products,” by which he meant exportable agricultural goods, were produced, he noted:
    It appears upon the whole, that the staple productions of our colonies decrease in value in proportion to their distance from the sun. In the West Indies, which are the hottest of all, they make to the amount of 8l. 12s. 1d. per head. In the southern continental ones, to the amount of 5l. 10s. In the central ones, to the amount of 9s. 6 1/2d. In the northern settlements, to that of 2s. 6d. This scale surely suggests a most important lesson—to avoid colonizing in northern latitudes.
    The first English attempt to plant a colony, at Roanoke, in North Carolina, between 1585 and 1587, was a complete failure. In 1607 they tried again. Shortly before the end of 1606, three vessels,
Susan Constant
,
Godspeed
, and
Discovery
, under the command of Captain Christopher Newport, set off for Virginia. The colonists, under the auspices of the Virginia Company, sailed into Chesapeake Bay and up a river they named the James, after the ruling English monarch, James I. On May 14, 1607, they founded the settlement of Jamestown.
    Though the settlers on board the ships owned by the Virginia Company were English, they had a model of colonization heavily influenced by the