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Inca Empire

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

The Inca Empire was a politically centralized and complex civilization, not a society whose later poverty followed inevitably from geography or limited technology. Its roads, records, and arrangements for famine relief formed part of an organized political order. After the Spanish conquest, however, the empire’s institutions and population became the material for a new colonial labor system. The transformation of the Inca mita into the Potosí mita—and the enduring contrast between Acomayo and Calca—shows how institutions inherited from one political order could be repurposed for another and leave unequal outcomes in their wake.

Political organization and social provision

At the time of the Spanish conquest, the Inca Empire was among the complex, politically centralized civilizations of the Americas. Its people lacked money and writing in the forms available to the Aztecs, but they recorded extensive information on knotted ropes called quipus. The empire built roads and provided famine relief, capacities that distinguished it from many societies in the temperate regions farther north and south. These features matter to the account of conquest: the Spanish encountered an organized state with its own political institutions, not a society without systems of coordination or administration.

The empire’s labor institution known as the mita illustrates how those arrangements linked work to political authority and collective provision. In Quechua, mita means a turn. Under the Inca system, forced labor was used on plantations that supplied food to temples, the aristocracy, and the army. In return, the Inca elite provided famine relief and security. The system thus joined compulsory work to obligations of provision and order, a relationship that would be substantially altered when Spanish colonial authorities revived and adapted it.

Conquest and the rupture of rule

In 1531, Francisco Pizarro set out for Peru intending to imitate strategies used by other Spanish conquerors. He began on the coast near Tumbes and marched south, reaching Cajamarca on November 15, 1532. There, the Inca emperor Atahualpa was encamped with his army. Atahualpa had recently defeated his brother Huáscar in a succession struggle following the death of their father, Huayna Capac. He was also angry at reports that the Spanish had committed atrocities, including violating a temple dedicated to Inti, the Sun God.

The following day, Atahualpa came with his retinue to the Spanish camp. The Spanish set a trap, killed his guards and retainers—possibly as many as two thousand people—and captured him. To obtain his freedom, Atahualpa promised to fill one room with gold and two more of the same size with silver. He fulfilled the promise, but the Spanish did not honor their side of the bargain: they strangled him in July 1533.

That November, the Spanish captured Cusco, the Inca capital. They imprisoned members of the Inca aristocracy until they produced gold and silver; when the offerings did not meet Spanish demands, they were burned alive. The conquerors also stripped the gold from artistic treasures, including the Temple of the Sun, and melted it into ingots. The sequence—from the capture of the ruler, through the coercion of the aristocracy, to the conversion of sacred and artistic objects into bullion—marks the violent replacement of Inca political authority by a regime organized around colonial extraction.

The colonial mita and Potosí

After consolidating control, the Spanish divided the people of the Inca Empire into encomiendas, assigning one to each conquistador who had accompanied Pizarro. The encomienda became the principal institution for organizing and controlling labor in the early colonial period. A second system, adapted from Inca practice, would become an especially extensive means of supplying labor for silver mining.

In 1545, Diego Gualpa, a local searching for an Indigenous shrine high in the Andes in what is now Bolivia, was thrown to the ground by a sudden gust of wind. A cache of silver ore appeared before him, part of a vast mountain the Spanish named El Cerro Rico, or “The Rich Hill.” The city of Potosí grew around the mountain; by 1650 its population had reached 160,000, larger than that of Lisbon or Venice at the time. Exploiting the silver required a very large workforce, making labor supply a central problem for Spanish colonial officials.

Francisco de Toledo, the viceroy sent to address that problem, arrived in Peru in 1569. He spent five years traveling through and investigating the territory and commissioned a massive survey of the adult population. He then moved almost the entire Indigenous population into new towns called reducciones, or “reductions,” to make labor easier for the Spanish Crown to exploit. Within this reorganized population, he revived and adapted the Inca mita. The resemblance in name and institutional ancestry concealed a decisive change in purpose: the colonial system centered on supplying workers to the mines rather than on the Inca arrangement of labor and reciprocal elite provision.

De Toledo defined a catchment area of about 200,000 square miles, stretching from the middle of modern Peru across most of modern Bolivia. One-seventh of its male inhabitants, newly concentrated in reducciones, were required to work in the mines at Potosí. The resulting Potosí mita became the largest and most onerous labor-exploitation scheme of the Spanish colonial period. Its area overlapped the heartland of the former Inca Empire, including Cusco, and the system persisted through the colonial era until its abolition in 1825.

Unequal legacies and institutional change

The contrast between Acomayo and nearby Calca demonstrates the mita’s long regional legacy. Both provinces lie high in the mountains and are inhabited by Quechua-speaking descendants of the Incas, and their inhabitants grow the same crops. Yet people in Acomayo consume about one-third less than people in Calca. The difference is visible in both the way people make a living and the physical accessibility of the two places. In Calca, crops are sold in the market for money; in Acomayo, they are grown for subsistence. Calca has a surfaced road, while the road to Acomayo is in very poor repair, and beyond Acomayo travel requires a horse or mule. Acomayo is also harder to reach from Cusco, the regional capital and former Inca center.

The account connects this divergence to colonial institutional history rather than to an evident difference in crops, climate, or ancestry. Acomayo lay within the catchment area of the Potosí mita; Calca did not. The comparison gives geographical form to a broader argument: institutions can shape economic opportunities long after the authorities that created them have disappeared, and the effects can be carried through differences in markets, infrastructure, and living standards.

The Inca Empire’s history also sits within a wider account of how conquest and institutional change affect prosperity. The existence of Inca roads, quipus, political centralization, and famine relief complicates explanations that attribute present-day poverty in Peru simply to tropical geography or an absence of earlier development. The book argues instead that colonial arrangements and later institutional paths are crucial: Spain’s initial income advantage over the Inca Empire was probably less than a factor of two, whereas the average Spaniard is now more than six times richer than the average Peruvian. The history of the mita is one concrete part of that account, linking the conquest of an organized empire to an extractive labor regime and, through the contrast between Acomayo and Calca, to inequalities that remained visible in the present.