What Is The Economy Of New Spain?

The New Spanish economy is the economy that existed in the period of Central and South American history that occurred after the conquest by the Spanish, beginning with the arrival of Christopher Columbus.

After the conquest, the Spanish colonies were organized into viceroyalties, the first being that of Novo Hispania, which means “New Spain”. The Viceroyalty of New Spain was created in 1535 and included the southern United States, Florida, Mexico, the Caribbean islands, and the Philippines.

New Spanish economy

At first, the Spanish were content to obtain wealth from the exploitation of the territory’s soils, mining. 
However, with the passage of time, the economy in the colonies was transformed, giving way to what is known as the New Spain economy.

Among the economic activities that developed in the colonial period, agriculture, livestock, mining and commerce stand out. 
Likewise, certain organizations and agreements that are part of the New Spain economy were established, such as encomiendas.

Characteristics of the New Spain economy



One of the main sources of income for the Spanish Crown was mining in the Viceroyalty of New Spain. Since the conquest, this was one of the most relevant economic activities.

In fact, it was the gold and jewels extracted from the great empires of Mesoamerica that encouraged the Spanish to carry out the colonization of the American territory.

At first, gold was the most relevant mineral, but later its importance began to decline, giving way to silver. In the middle of the 16th century, the exploitation of silver mines began in various areas of the viceroyalty, Zacatecas being one of the first mines to be discovered (1546).

From there, the activity spread to other areas, Pachuca, San Luis Potosí, Guanajuato. Among the most relevant mines, those of Zumpango, Taxco, Sultepec, Tehuantepec and Michoacán stand out.

It should be noted that mining was not constant, but took place in stages. From 1555 to the mid-1600s, mining activity was prominent, because the mines were just discovered.

However, from the 17th century onwards, mining exploitation decreased due to lack of manpower and due to accidents that occurred in several mines (floods and landslides).

The Agriculture


Agricultural activities were the basis of the economy in the colonies. Not only did it allow to obtain food for the inhabitants of New Spain, but it also guaranteed production in the livestock area, since the animals were also fed with the products obtained from agriculture.

In the colonies of New Spain, crops typical of the area were obtained, such as chili, avocado, tobacco, cotton, vanilla and cocoa.

Similarly, the colonizers expanded agricultural production by introducing European crops that adapted to the region’s climate, including cereals (such as barley, wheat, oats, sorghum, and rice), coffee, indigo, and sugar cane. , peaches, the olive tree, the vine, among others.

These crops were not only used for domestic consumption, but were also exported to Europe, where they had great commercial value.

Production in the colonies of New Spain

The most important crops in the colonies were wheat and sugar cane. The cultivation of wheat was of economic importance because it constituted the base of the diet in Spain and throughout Europe.

There were five areas in which extensive wheat cultivation developed: the Oaxaca Valley, the Mexico Valley, the Atilixco Valley, the Puebla Valley, and in the regions of Jalisco, Guanajuato, and Michoacán.

Other extensive crops were sugar cane, which occurred in Cuernavaca, Córdoba and Michoacán.

Corn, beans, squash, chili and tomatoes, products that were cultivated in pre-Columbian times, continued to be cultivated for internal consumption.


Cattle were introduced to the colonies from the 16th century. The first species to be brought from Europe were horses. Soon after, pigs were introduced, followed by sheep.

Regarding the latter, sheep farming was one of the most relevant since the production of woolen clothing was of economic importance for Europeans.

This type of cattle was followed by goats, relevant for the production of goat cheese, and cattle, which adapted so well to the area that it allowed a decrease in the cost of meat.

Finally, mules and donkeys were introduced, beasts of burden that contributed to the work in the mines.



As previously explained, the products obtained in the colonies from mining, agriculture and livestock were used for both domestic consumption and for export.

In this sense, a trade network was created between the cities that made up the Viceroyalty (internal network) and between the Viceroyalty and the Spanish Crown (external network).

Likewise, the expansion of agricultural and livestock production allowed the creation of regional markets and the development of commercial cities, which were intended to supply the neighboring population.


The New Spain economy was based mainly on the exploitation of the land and labor. Thus, the parcel system was organized.

This consisted of granting the colonizers an extension of land and a number of aborigines to work the land; the initial agreement established that these aborigines would receive payment for their labor. In return, the owners had to transform the aborigines to the Catholic religion.

Shortly after its installation, the encomienda system was transformed into a form of slavery, since the aborigines were subjected to inhumane treatment and rarely received remuneration for their work.

The encomienda system was abolished in 1717 but, in New Spain, it continued until 1820, when Mexico declared its independence.


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