Facts and Figments in Bourbon Mexico

Abstract

It has recently come to my notice that Professor John N. Coatsworth's article, 'The Limits of Colonial Absolutism: The State in Eighteenth Century Mexico', published in Karen Spalding (ed.), Essays in the Political, Economic and Social History of Colonial Latin America (Newark, N.J., 1982) has been awarded a prize by the Conference on Latin American History in the United States. There is a danger that this award may persuade students working on Bourbon Mexico to accept Professor Coatsworth's calculations without further question. In this critique I wish to raise two objections, one of terminology and the other of substance, to those calculations. My object is not to provoke controversy but rather to prevent the further diffusion of error. In fairness to Professor Coatsworth, it should be noted that his chief error is based on data supplied to him by Professors John TePaske and Herbert Klein, who in their article 'The SeventeenthCentury Crisis in New Spain: Myth or Reality' first perpetrated the same error.1 My first objection concerns the implications of the terminology adopted by Coatsworth in his appendix 2 where he presents the annual mintage figures of 18th century Mexico and an equivalent annual series adjusted for inflation under the heading 'nominal' and 'deflated'. Of course, there can be little doubt that the prices of maize and other primary produce rose in New Spain from the 1780s, so that in consequence the value of silver, defined as a medium of ex? change, fell.2 The same quantity of reales now bought less maize. But the wisdom of deflating the value of silver on an annual basis rather than by quinquennial averages is open to question. What I wish to query, however, is the description of the mintage figures as 'nominal'. For the increase they record, from 5 million pesos to 25 million in the course ofthe century, was very much a real increase, which sprang from an expansion in industrial activity. The more silver that was produced, the more men were employed in mining, refining and transport, the larger the input of materials such as mercury, wood, leather and gunpowder, and the greater the demand for maize to support the workforce and mules. There was thus nothing fictitious or nominal in the expansion of industrial activity in late eighteenth century Mexico. True, the value of silver coin fell when measured by the price ofthe maize it could purchase. But in fact most silver coin was shipped abroad either on the King's account as revenue or in payment for European imports, the chief item of which was textiles. Qualitative evidence suggests that the price of imported cloth fell during the 1780s as a result ofthe great infiux of goods after the promulgation ofComercio Libre. Although we lack any coherent price series for imported goods, there is a strong possibility that the trend was downwards.3 If this be the case, then Mexican silver, defined as an export commodity, appreciated in value in the late eighteenth century.