Enrique Tandeter has written a masterful work of social, economic, and institutional history focused on the mining industry of eighteenth-century Potosí. Silver production at Potosí, the largest mining center in Spanish South America, declined almost continuously from the early 1600s to the 1730s. Potosí’s production then revived and grew steadily until crisis struck again in the late 1790s. Tandeter’s book provides the first thorough analysis of that revival and growth, its causes, consequences, and ultimate collapse.

Tandeter attributes Potosí’s revival in the 1730s to favorable shifts in terms of trade (the flood of Brazilian gold raised silver’s relative value) beginning in the late 1600s, and to the arrival of French smugglers in ever larger numbers during the first decades of the eighteenth century to exchange European wares for millions of pesos of silver. He also links the revival to three nearly simultaneous actions of the Spanish colonial government between 1725 and 1732. The crown reaffirmed the mita obligations of thousands of Indians from the provinces surrounding Potosí, reduced taxes (the Royal Fifth dropped to a Royal Tenth), and reinstituted credit sales of mercury from the government monopoly just as production at the Huancavelica mercury mine began to rise again.

Like their counterparts in Mexico, Potosí’s mining enterprises were vertically integrated operations. Except for their multifaceted dependence on the colonial state and their lack of significant technological change, however, Potosí’s mines and miners differed sharply from those of Mexico. The scale of their operations was much smaller. Output depended on exploiting the low-grade ore tailings left unprocessed in earlier periods. Except for a failed government-sponsored tunneling effort late in the eighteenth century, entrepreneurs of the time invested almost nothing in the mines themselves. And the profitability of the industry depended on forced labor, the mita that supplied half of Potosí’s mine labor force for most of that century.

Tandeter succeeds brilliantly at laying bare the structure of an industry whose eighteenth-century prosperity rested on the most precarious and archaic of foundations. The richest ore was extracted by quasi-illicit weekend thieving (the kajcha) by labor gangs whose booty was processed in rough trapiches that competed with the registered ingenios of the wealthy and often absentee owners (or azogueros). The profits extracted by the owners depended on draconian work quotas imposed on the mitayos by the rough men who rented the mines and ingenios. The azogueros squabbled among themselves for access to government-subsidized loans and to official positions they exploited to loot the treasury. Every enlightened effort to reform and modernize the industry during the Bourbon era failed.

The collapse of silver production at Potosí began in 1796, when the tailings finally ran out and war cut off mercury supplies from Europe. Then drought, famine, and epidemics ravaged the Potosí region between 1800 and 1805. Finally the mita was abolished, and stable government collapsed in the independence wars. Tandeter’s book replaces or substantially modifies all previous accounts of Bourbon Potosí and simultaneously makes a major contribution to the economic and “business” history of colonial Latin America. Richard Warren’s translation is lucid and graceful.