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New Spain

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

New Spain was the Spanish colonial province governed by Hernán Cortés after the conquest of the Aztecs, completed in 1521. Its significance in the book lies in the institutions through which conquest became colonial rule: the encomienda made Indigenous people themselves a resource to be allocated, compelling tribute and labor while presenting Christian conversion as the encomendero’s charge.

Conquest and Colonial Government

The end of military conquest did not end the transfer of wealth. As governor of New Spain, Hernán Cortés began distributing the most valuable resource identified by the account—the Indigenous population—through the encomienda. The arrangement connected Spanish authority over the province to colonists’ claims on Indigenous labor and tribute.

The Encomienda

The encomienda had a precedent in fifteenth-century Spain, where it formed part of the reconquest of the south from Muslim rulers and communities. In the New World, however, the book describes a more pernicious institution: Indigenous people were granted to a Spaniard, the encomendero, and required to provide tribute and labor services. In exchange, the encomendero was formally charged with converting them to Christianity. The structure thus joined an asserted religious obligation to a material system of colonial extraction.

New Spain in the Atlantic World

New Spain belonged to a larger expansion of European commerce and colonization that accelerated after 1600. England, the Dutch Republic, France, and Spain all participated in overseas expansion, but the political effects differed: in England, Atlantic commerce helped create a wealthy group of traders less dependent on the Crown, while Spanish trade remained subject to royal monopoly. The book’s comparison places colonial provinces such as New Spain within a wider history in which commercial expansion could enrich imperial powers while reinforcing extractive institutions elsewhere.

Historical Significance

The encomienda illustrates how colonial rule could turn military victory into continuing claims over people, their work, and their produce. The book situates such institutions within the broader consequences of European expansion: colonial empires often rested on the destruction of independent polities and indigenous economies or on the creation and strengthening of extractive arrangements. New Spain therefore appears not simply as a territorial possession, but as a setting where conquest was organized into a durable system of colonial power.