The encomienda and the optimizing imperialist: an interpretation of Spanish imperialism in the Americas

During the conquest and early administration of Spain’s American colonies the most controversial policy was the granting of temporary encomiendas, or temporary rights to collect tribute from Indians, as a reward for conquest. The contribution of the encomienda to the destruction of Indian populations was recognized by Spanish authorities at the time, yet the Crown persisted in introducing the most destructive form of the institution during the early stage of each colonial venture for over 200 years. Because the Crown financed the defense of its colonial possessions against other European imperialists, an addition to colonial capital, by increasing the return to an aggressor, imposed a defense-cost externality on the Crown. Since the cost of defending additional assets was higher in the Americas than in Spain, an efficient policy would have been to encourage the rapid transformation of human services into durable assets that could be transported to Spain. According to our defense-externality argument, the temporary encomienda and its parallel modification in each colonial episode becomes a rational Crown policy. The administration of Spain’s distant colonial possessions, especially the adjustments in the restrictions on encomiendas, required information about the local conditions, and we argue that the Church, as designated “protector of the Indians,” may have played an unwitting role in the communication of information.