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

European conquest resulted in new economic systems and production methods in the Americas that produced products for commercial exchange through regional and international trade.


Europeans introduced exploitative labor systems to maximize commercial profits.

Europeans had far less impact on the economic systems in Asia.

Colonial economies centered around mining and cash crop agriculture.

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


Europeans Established New Colonial Economies in the Americas

Main idea

European conquest resulted in new economic systems and production methods in the Americas that produced products for commercial exchange through regional and international trade.


After their conquest of the Americas, Europeans established new economic systems across the region. These systems pushed indigenous peoples aside, took their land and resources, and exploited them for European gain.


Economic systems include what types of goods societies produce, how they produce them,  and how wealth and resources and wealth are across the population.

Europeans restructured economies across their American territories.

  • They introduced large-scale cash-crop agriculture, which had not previously existed in the Americas.
  • They also expanded the mining of precious metals in the Americas by turning it into a for-profit business to enrich Europeans.
  • They connected the economy of the Americas with the economies of Afro-Eurasia through new trade routes across the Atlantic and Pacific Oceans. 
Indigenous peoples’ American economies
European colonial American economies
Under the control of indigenous peoples
Under the control of Europeans
For the benefit of indigenous peoples
For the benefit of Europeans
Hunting, gathering, and small-scale agriculture
Agriculture for profit became increasingly important
Slave systems uncommon
Forced labor slavery common
Minimal commercialization
Increased commercialization
Not connected to commerce in Afro-Eurasia
Connected to commerce in Afro-Eurasia
Comparing the American Economy Before and After the Arrival of Europeans

Cash crop agriculture: Europeans first produced cash crops on large commercial plantations on the islands (Canary, Cape Verde, and the Azores) of the Western African coast in the 15th century. Their first significant cash crop was sugar cane, which they learned to grow from contact with Muslims in the Mediterranean region during the Crusades.  

The Portuguese set up the first plantation in the Americas in Brazil. Like in the Eastern Atlantic, they focused on sugar cane production. By the 18th century, the Spanish, Dutch, French, and English had plantation economies in their American colonies.  

Early cash crop production included 

Production later expanded to include crops like 

Mining operations: Europeans also sought mineral wealth in the Americas. Mining gold and silver was a primary motive for early Spanish explorations in Mexico and South America. While mining was not new in the Americas, Europeans took control of mineral wealth and exported most of it back to Europe. Following the Spanish conquest of the Inca Empire in the 15th century, the Potosi mine in modern Bolivia became one of the world’s largest single sources of silver.

Europeans Brought New Labor Systems to the Americas

Main idea

Europeans introduced exploitative labor systems to maximize commercial profits.

Plantation agriculture and mining operations require a lot of workers. Europeans introduced new systems of forced labor and slavery into the Americas to meet their labor needs and produce as cheaply as possible.

European introduced labor systems included various types of

  • Indentured servitude 
  • Forced indigenous labor
  • Slavery

Labor systems are the types of labor and work done by workers.

Indentured servitude

Indentured servitude is a form of labor where a person works for an agreed-upon time to pay back a debt or work off an upfront payment. In the Americas, seven-year work contracts were common. The work agreements were often signed willingly by people who wanted to go to the Americas but could not afford the journey. However, vulnerable populations like the poor sometimes found themselves coerced into signing the contracts. Those who could not pay their debts in Europe were often forced into servitude in the Americas to pay back what they owed.

  • While indentured servants’ living conditions were rough, they had some legal protections that prevented them from the worst exploitation and violence in other American forced and slave labor systems.
  • 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.
  • European indentured servants continued coming to the Americas until the late 18th In the early 19th century, Asian migrants increasingly journeyed to the Caribbean, Latin, and South America as indentured servants.

Mita labor

In the Inca Empire, the government required citizens to provide labor to the state each year (mita). This labor was short-term and only performed when men were not working on their family farms. The work included various tasks like growing food for those who lived in cities, building food storage, or repairing infrastructure. Mita was like paying your taxes with work instead of money.

Mita under the Spanish: Under the Spanish, Mita became a system of exploitation. Workers often had to work dangerous and exhausting jobs like mining. Many people who left their villages for mita labor under the Spanish never returned.

Encomienda and hacienda

Encomienda and hacienda were quasi (partially) feudal systems imposed by the Spanish on indigenous peoples in the Caribbean and other Spanish-conquered lands in the Americas and the Philippines. Both allowed social elites to control nearly all the economic resources and labor of individuals who lived on their lands or assigned regions.

Encomienda: Spanish monarchs gave control over large territories (encomienda) to people they felt had served Spain and the monarchy—usually successful conquistadors. If you controlled one of these territories, you were legally allowed to force indigenous people to pay taxes, work for you, or provide other goods or services. In theory, the heads of encomienda did not own native lands. However, over time, much of the indigenous people’s land was stolen by whoever led the encomienda. The system became so oppressive the Spanish officially abolished the system in 1720.

Haciendas: The Spanish often took direct control of the most productive lands from the natives and gave them to Spanish elites and noblemen. The owners of these lands turned them into large estates called haciendas for economic production. Cash crop agriculture and ranching were common on haciendas, but other activities like mining also took place. While there were some enslaved workers, hacienda owners paid most workers poverty wages. Many farmers were in a consistent state of debt to the hacienda owner. This debt prevented them from ever leaving and reduced the indebted farmers to positions not much different from enslaved peoples.


Europeans initially attempted to exploit indigenous peoples’ labor. However, natives could easily escape. Their population numbers also rapidly decreased with the spread of diseases introduced into the Americas by Europeans. As a result, Europeans turned to the African slave trade—the first enslaved Africans arrived in the Americas in the 16th century. 

Chattel slavery: Societies throughout history have used slave labor. What was different about American slavery was the brutality of the system. European “chattel slavery” stripped enslaved people in the Americas of all rights and viewed them no differently than “chattel” (a personal possession). Enslaved Africans were reduced to nothing more than a product to be bought, sold, and treated no better than animals. Freedom was nearly unattainable.

Asians Continued to Dominate Asian Trade

Main idea

Europeans had far less impact on the economic systems in Asia.

Asians Continued to be the dominant economic force in the Indian Ocean region. Not until the late 18th century Europe began to take a dominant role in Asian trade.

Evidence of the continued influence of Asian traders included the following:

Asian states could limit the access of European merchants to their economies. The Tokugawa Shogunate in Japan only allowed the Dutch to trade in Japan through one port. No other European merchants could enter Japan—those that tried were executed. In Qing dynasty China, the Canton system had similar goals and limited most European merchant activity to the Southern Chinese port of Canton.

Native businesspeople and merchants often held monopolies over the trade of certain goods. Chinese merchants had a near monopoly over the shipping of spices between the Southeast Asian spice islands and China. In India, the powerful merchant Virji Vora (c. 1590 – c. the 1670s) held a monopoly over several goods, including certain spices. Monopoly control allowed him to control the prices Europeans had to pay.

Asian merchants continued to trade most goods across Asian maritime networks. These groups included

  • Arabs (Omanis and others)
  • The Chinese
  • Indians (Gujaratis and others)
  • The Japanese
  • Malaysians
  • The Vietnamese