It was not until the eighteenth century that Latin America constituted an important market for European manufactures. The great bulk of goods consumed before then—textiles, tobacco, foodstuffs—were produced by the colonists themselves. This thesis, which finds broad support among colonialists, is the basis for Juan Carlos Garavaglia’s study of the production and distribution of yerba maté. Beginning in the 1560s, the Spaniards entered the trade in Paraguay, and maté rapidly displaced sugar and wine as the region’s principal export. Facilitated by an extensive riverine system of transport composed of the Paraná and its tributaries, the export of maté grew rapidly. At the end of the colonial era, 300,000 pesos’ worth of maté were traded in Buenos Aires, and until 1778, only wheat sometimes surpassed it in value. Garavaglia’s work indicates a geographically wide market, encompassing the River Plate, Peru, Quito, and even New Spain. The cultivation of maté shaped the economic and institutional evolution of the area upriver of Asunción, and the larger implications of this development are Garavaglia’s central concern.

The distribution of the costs and benefits of supplying maté clearly reflected the colonial division of labor. In an absorbing analysis, Garavaglia demonstrates that the labor of the Guaraní subsidized the production of maté, and underwrote the profits of encomenderos, Jesuit fathers, and merchants in Santa Fe and Buenos Aires. For the Indians, the demographic consequences followed a familiar pattern. In the reducciones around Asunción and Xerez, population fell by 50 percent between 1555 and 1632. In the Guairá region, the decline exceeded 60 percent. Epidemic disease, the raiding of the bandeirantes, overwork, and forced migrations all took their toll. Many Indians simply fled their villages and, by the late eighteenth century, formed the nucleus of a landless Paraguayan peasantry. In his most interesting chapters, Garavaglia touches upon the formation of a peasant culture and upon the equivocal connection between the peasantry and the market. Historians interested in questions of acculturation will find this illuminating.

There are a few problems. The book is prolix, occasionally repetitious, and imperfectly integrated. There is a slight ideological overlay, which leads Garavaglia into a definition of capitalism that will amuse even advocates of marginal productivity theories of distribution. Some explicit consideration of the overall economic significance of the trade is also absent in an otherwise comprehensive investigation.