The high level of income inequality that characterizes many Latin American nations is usually explained as a long-term consequence of the Spanish conquest and the extractive institutions they imposed. But it is worth clarifying this story and letting yourself be carried away by the siren songs that refer to the supposedly idyllic past.

In a recent study, Guido Alfani of Bocconi University and Alfonso Carballo of NEOMA Business School argue that: “in the case of the Aztec empire, great inequality preceded the Spanish conquest… We reached this conclusion by assessing levels of income inequality and imperial extraction across the empire. It found that the richest 1% earned 41.8% of total income, while the income share of the bottom 50% was only 23.3%… Existing literature suggests that, after the Spanish conquest, colonial elites inherited pre-existing extractive institutions and added new layers of social and economic inequality.”

In the Western tradition of the “noble savage”, a utopian version of the civilizations of the Aztecs, Mayans and Incas, among others, is maintained, and as a counterpart, everything in the West that suppressed them is demonized. This is how angelic legends spread about empires such as the Aztec or Inca, and on the other hand, black legends about the Spanish monarchy and the English empire. This pattern is amusingly and exhaustively demonstrated by María Elvira Roca Barea in Imperiophobia and Nigel Biggar in Colonialism: A Moral Reckoning.

Alfani and Carballo’s study blurs the utopian vision of the Aztec empire, as Louis Baudin (1928) had previously done of the Inca empire. When Hernán Cortés arrived in what is now Mexico, he found not a civilization at peace, but a population in a constant state of war, subjected to ever-increasing taxes by the ruling faction and “pro-elite political reforms that worsened social stratification throughout the empire. The nobility took over the land and controlled the populace through various mechanisms, which led to a clear demarcation between the landowning class and the landless class.

The authors point out that the encomienda system — whereby the landowner provided protection in exchange for the labor of the farmer — was not supposed to be something strange for the subjugated, who were subjected to some form of forced labor. In the Aztec Empire, one of the mechanisms that the landed nobility used to control the common people was to give them access to land in exchange for their labor or part of their production (taxes) or even the sacrifice of children or young people in rituals. In some cases, Europeans adapted or retained pre-existing extractive institutions, such as the Inca mita in the Andean region.

Furthermore, the provinces that bore the highest taxes were also those that allied themselves with the conquistadors. Thanks to this alliance, Cortés conquered the Aztec Empire with a small army.

This research gives us a better view of the past and inoculates us against the siren calls that promote a return to the supposedly idyllic socialist past. (OR)