Viceroyalty of Peru - Economy

Economy

The economy of the viceroyalty of Peru largely revolved on the massive exports of silver. The huge amounts of silver exported from the viceroyalty of Peru and Mexico had also a deep impact on Europe where it believed by some scholars to have caused the so-called "price revolution". Silver mining was carried out using the mita system of unfree labour, a system inherited from pre-Hispanic times. Silver production peaked in 1610.

Once the Viceroyalty of Peru was established, gold and silver from the Andes enriched the conquerors, and Peru became the principal source of Spanish wealth and power in South America. The first coins minted for Peru (and indeed for South America) appeared between 1568 and 1570. Viceroy Manuel de Oms y de Santa Pau was able to send back an enormous sum of money (1,600,000 pesos) to the king to cover some of the costs of the War of the Spanish Succession. This was possible in part because of the discovery of the mines in Caraboya. The silver from mines at Potosí, Bolivia circulated around the world. Peruvian and other New World silver was so plentiful that it caused inflation in Spain and a collapse in its price. Even today, Peru and Bolivia produce much of the world's silver.

Luis Jerónimo Fernández de Cabrera prohibited direct trade between Peru and New Spain (Mexico) and the persecution of Portuguese Jews, the principal traders in Lima.