Jeremy Baskes. Staying Afloat

The “monopoly merchant” is one of the favorite villains of Spanish American colonial history. The monarchy granted the merchants of the consulados of Cadiz and Mexico a monopoly of the carrera de Indias. Irrational regulations allowed them to squeeze colonial and peninsular societies alike by excluding competitors, restricting supply, and charging “monopoly” prices for their wares. Earning legendary profits, they turned economic dominance into political and social power reaching deep into society. Only the concerted efforts of late Bourbon reformers secured the promulgation of the comercio libre (free trade) decrees of 1778, which finally broke these merchants' hold over transatlantic trade. Competition drove prices down and traded quantities up. Or so we were told. Jeremy Baskes challenges most of that story. He argues that historians have misrepresented the organizational structure of Spanish American trade, and that in their blanket condemnations of supposed “monopoly merchants,” they have chosen to ignore the single largest challenge of Spanish American trade: uncertainty. Baskes is not the first to point out that Spanish American colonial trade was never organized in a monopoly. His contribution is to refute the myth of such a monopoly point by point through a comparison of how risk and uncertainty worked before and after comercio libre.

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