The history of the nation of Bolivia truly begins in 1532. While the history before this date is certainly rich and storied, the events that led to the creation of the Bolivian revolution and worked in the shaping of its people did not begin to occur in earnest until the Spanish conquest. The questions as to why the Spanish were able to so easily overturn the established Incan empire are, while interesting, also not for this study.
One may begin to look at the Bolivian revolution at the point when, for good or ill, the Spaniards took over the area which they termed Upper Peru. This geographic area was defined immediately after its conquest by the silver it produced. This primarily took place at the rich mines of Potosí. The entire Spanish interest in the region was driven by how much silver they could extract and export to the Spanish crown in Europe.
Initially, this industry experienced a boom as the existing refined silver was exported to Europe and many Indians rushed to take advantage of the employment opportunities provided by the new industry. Indians were the principle agents of silver extraction since Spaniards refused to do any of the actual mining with an abundant source of cheap labor present. Additionally, the European methods of smelting the ore to extract refined silver were inadequate due to the high altitudes of the mines at Potosí. These conditions caused the majority of the labor to default upon the native Quechua and Aymara Indians.
The emerging economy thus centered on Indian labor to gain silver from the mines. However, there was also a lucrative sector designed to provide those Indian laborers with everything necessary. The principle commodity necessary was, of course, food. According to the Spanish system that was adopted throughout the new conquests, common soldiers were rewarded for their service with grants of land, or encomiendas. With this grant of land, the former soldier was entitled to all of the labor and produce of the Indians living on that land. Additionally, Indian migrant workers flocked to the silver mines of Potosí to provide the miners with every conceivable amenity from washing clothes to making candles.
This initial focus on the mining potential of Bolivia did not change throughout the Spanish administration of the territory of Upper Peru although the method through which this focus was applied did change quite significantly. The early boom years of exporting existing silver artifacts and utilizing encomiendas did not last. The cheap indigenous labor that initially flooded the mines quickly evaporated as the Quechua and Aymara realized that they could lead better, richer lives if they supplied the miners and the Spanish administrators rather than doing any of the mining work themselves. Additionally, the encomenderos began to prove difficult to control for the Spanish crown as well as being repressive to their indigenous workers. Both of these conditions led to changes that would directly affect the nation of Bolivia for the next several centuries.
Firstly, as the original conquistadores began to die out, the shift to an alternative method of agricultural production began to be made. This was the shift to haciendas. Under the hacienda system, the Indians worked for the owner in exchange for land. In principle this was a less harsh and demanding relationship between Indian and landowner, but in practice the landowners dominated the Indians just as much as the old encomenderos had done. A second aspect of this new system was that it was not quite so much export oriented. While the encomienda system had seen vast amounts of food flowing from all over the countryside to the mines of Potosí and even abroad, the hacienda system produced food much more for the domestic market. Instead of shipping the food long distances, now a single hacienda might just produce food for a neighboring village or, in the case of Potosí, several nearby haciendas might provide food to a market.
The second major change that was enacted in 1573 was the creation of the Potosí mita. This was the brainchild of Francisco de Toledo, the new Spanish governor of the viceroyalty of Peru, and was a system requiring the labor of the indigenous population in the mines of Potosí. This was extraordinarily necessary from the point of view of the Spanish crown as the silver exports from Upper Peru had fallen precipitously in the decades after the initial boom. The mita system required all indigenous males to work for three weeks a year and one year in six at the mines.
This forced labor resulted in another boom period for Potosí silver. The system appeared to be working like a charm as the vast majority of Indians selected to work reported for duty and the production and export of silver reached an all-time high. However, as the years wore on, the flaws of this new system began to make themselves painfully apparent.
The explosion of silver production was not just a function of the increase in indigenous labor. It was also facilitated by the presence of numerous tailings, which are veins of silver ore that are very near to the surface and extremely easy to access for the purposes of mining. These tailings were quickly exhausted with the increase in labor. This necessitated the delving of deeper mineshafts and the general decrease in the quality of working conditions for those Indians whose job it was to do so. This decrease of easily available silver coincided with the beginnings of a decline in the number of Indians who began to report for mita labor. The system was designed in such a way that each village was required to supply a certain number of laborers for each rotation at the mines. When Indians began to desert their villages to avoid the forced labor, the quota that each village was required to meet did not decrease. This placed the added strain of more work on the Quechua and Aymara Indians that remained in the village and gave them more of an incentive to migrate. The indigenous society and the mita system interacted in such a way that those who left their home villages were no longer accounted for in the official records. They were simply known as those who had no village, often equivalent to having no family name. While they were looked down upon in society, they were also able to slip through the cracks of the Spanish administrative bureaucracy and avoid the harsh forced labor of Potosí.
Thus, the problems became quite evident. The silver required more labor to access but less labor was available through the mita. However, the crown, as well as the administrators of the colony, was reluctant to revise the system since it had provided such boom times in the past. The governing officials then were presented with the situation that no one wanted to kill the goose that might one day lay another silver egg.
Thus, the economic foundations of the oppression aspect of the Bolivian revolution were laid very early in the colonial history. The economy suffered significantly as a result of the global situation beginning in 1786. The catalyst for the massive disruptions in Bolivian socio-economics was a very short Corsican half a world away named Napoleon. The declining international trade as a result of the wars affected the Bolivian export economy significantly. This was exacerbated by epidemics in 1804-5 and costly wars for independence lasting from 1809 to 1825.
By 1825, when independence finally took full effect, the economy had been significantly disrupted as military forces from both Argentina and Peru had briefly attempted to add the region of Upper Peru to their new territories. Bolivia had to import even basic food staples and the mining industry was tremendously set back due to scarcity of labor and abandonment of the mines. In sum, Bolivia’s economy got off to a rocky start. Instead of searching out new solutions to these old problems, the elites in the new Bolivian society turned to the old methods of production which had landed them in that situation in the first place.
The most significant change in the economic system of the nation occurred with the exhaustion of the silver mines of Potosí. This lack of mining for the export sector was replaced by the discovery of tin in the second half of the nineteenth century. The methods utilized by these new tin barons were not quite on the order of those used by the mita, but they didn’t stray far. The other significant occurrence in the economic situation of Bolivia was the War of the Pacific. This conflict resulted in the loss of Bolivia’s coastal territory as well as the great reduction in the national treasury that occurred when President Daza fled to Europe with a large portion of it.
Now landlocked and seemingly committed to poor economic policies, it seems to be only a matter of time until these ingredients result in some sort of change. Various Presidents from the Conservative and Liberal parties came and went, but none of them could solve Bolivia’s chronic economic woes. These woes were exacerbated by the global great depression which occurred in the 1930s. Additionally, nothing was helped by the ambition of President Salamanca in 1934 when he declared war on Paraguay in order to seize several rich oil fields. The war dragged on over the course of several years to a loss of large tracts of the Gran Chaco region to Paraguay. The Chaco War was almost an economic footnote as the already declining economy took a nosedive in response to the capitulation.
“The country [Bolivia] is up to its reputation as an Indian land with a thin, white, upper crust. It is primarily Aymara in speech, physiognomy, dress, and custom, even down to the central plaza of the capital.” – Carl Sauer, 1942
This economic exploitation was secured by the corresponding political exploitation that the elites manufactured. The above observation by Sauer might have referred to Bolivia at any point in its history. However, it comes after more than a century of independence. This type of observation pointed to a national leadership completely and totally out of touch with the peoples it ruled.
This lead to a government that looked good for the common man on paper, but in actuality was organized for the benefit of the elites without granting the franchise to many indigenous men, not to mention indigenous women. Many outside observers of this time period simply looked at the superficial aspects of the governmental and constitutional structure and surmised that life was good in Bolivia. In reality, nothing could have been further from the truth, and after the Chaco War, only a spark was needed to begin a revolution...
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 Jeffery A. Cole. The Potosí Mita: 1573-1700. (Stanford, CA: Stanford University Press, 1985), 3.
 Ibid., 1.
 Ibid., 8.
 Ibid., 27.
 Ibid., 126.
 Herbert S. Klein. Haciendas and Ayllus: Rural Society in the Bolivian Andes in the Eighteenth and Nineteenth Centuries. (Stanford, CA: Stanford University Press, 1993), 84.
 Rex A. Hudson and Dennis M. Hanratty, eds. Bolivia: A Country Study. (Washington, D.C.: Federal Research Division, Library of Congress, 1991), 17.
 Ibid., 29.
 James Dunkerly, ed. Studies in the Formation of the Nation-State in Latin America. (London: Institute of Latin American Studies, 2002), 275.
 Ibid., 279.
 N. Andrew N. Cleven. The Political Organization of Bolivia. (Washington, D. C.: Carnegie Institute of Washington, 1940)