The wars of independence in Spanish America interrupted the Atlantic and Pacific trade networks that had sustained the region’s colonial economies. Amid the political instability that followed independence, investment dried up and trade networks collapsed. For rural peasants and indigenous communities, this was a benefit in disguise: the decline of trade made lands less valuable. The rents landowners could charge tenant farmers decreased, making it easier for peasants to gain access to land.

By the second half of the nineteenth century Latin American elites reached a compromise that combined liberal political ideas about the way national government should be structured with liberal economic policies that favored large landowners. Political stability and economic growth returned. Foreign investment intensified. By the turn of the twentieth century Latin American countries were firmly tied to the world economy. Indigenous and rural communities paid a high price for this return to economic growth: as the value of agricultural exports increased, so did the value of land. Governments, foreign investors, and large landowners seized lands through war, legal action, or coercion at a dizzying rate.

As Latin American governments stabilized, they consolidated control of national territory in part by eliminating, subjugating, or displacing indigenous communities. Through this process, Latin American governments opened new lands for private ownership.

After the Conquest of the Desert in the 1870s and 1880s, the Argentine government sold off lands it took from indigenous communities. The land was inexpensive, but because it was sold in such large parcels, the few who could purchase it did so by mortgaging existing landholdings. Consequently, more than 20 million acres were sold to just 381 landowners, who created vast estates known as latifundios. In contrast, the Brazilian Land Law of 1850 restricted land ownership by prohibiting anyone from gaining title to land by settling it. The law was a response to pressure from Britain to end the slave trade: planters used the law to keep slaves or free workers on their plantations by preventing them from setting out to farm on their own.2

Liberal economic policies and the intensification of foreign trade concentrated land in the hands of wealthy exporters. Governments represented the interests of large landowners by promoting commodity exports and industrial imports. Brazil became the world’s largest exporter of coffee and experienced a brief but intense boom in rubber production. Argentina’s conquests on the frontier and economic modernization made it one of the most efficient and profitable exporters of grains and beef. Chile and Peru served the international market for fertilizers by exporting nitrates and bat guano.

These export booms depended on imported capital and technology. In the Circum-Caribbean this came mostly from investors in the United States, while in South America it came from Britain. (See “Individuals in Society: Henry Meiggs, Promoter and Speculator.”) British capital and technology built Argentina’s network of railroads and refrigerated meatpacking plants. By 1890 British companies controlled 90 percent of Chile’s nitrate-mining industry.

The rise in the quantity and value of primary commodity exports concentrated wealth in the hands of oligarchs. Large landowners, such as Brazilian coffee planters, relied on cheap labor provided by slaves until 1888 and, increasingly, by tenant farmers and free laborers who worked for little pay. The exported coffee produced by these workers reaped profits so great that, although coffee planters were the main slaveholders, they could afford to give up slavery and pursue immigrant labor from Europe. In the late nineteenth century planters united to create colonization companies in southern European cities that promoted and subsidized immigration to Brazil. The planters combined economic liberalism with Social Darwinism: they believed that free workers were more efficient than slave laborers and that white workers were more productive than black ones.