The Impact of the Production of Precious Metals
The impact of the production of precious metals in the central areas as well as the trade that linked the indigenous economies with international markets meant that interregional and intraregional integration was not as strong as conceived by traditional historiography. Furthermore, the increase in the production of precious metals during the second half of the eighteenth century may not have been as great as traditionally believed. The scholar J. H. Coatsworth has noted that the growth in this sector began not at the end of the century but at the beginning of the 1720s. Reducing the total of the mint according to the price index, he discovered that the mining industry was faced with serious problems at the end of the colonial period to the point of falling revenues. The production of a kilogram of silver was more expensive at the end than at the beginning of the eighteenth century owing to increases in the cost of production (deepening of the mine shafts, the need for greater investment, the rise in the cost of money) at the same time as the value of silver in international markets dropped. Thus the mining industry survived in the second half of the eighteenth century largely because the Crown agreed to favor it with tax exemptions while maintaining control over the prices of such vital products as gunpowder, cereals, and mercury. Traditionally it has been emphasized that growth in the mining industry was favored by the Crown's protectionist measures that drove the economic recovery and intensified the integration in spatial terms of the northern areas of the colony. Nevertheless regional analysis makes it clear that without taking away the importance of silver production, the reality was rather more complex.