Paraguay appears in the book both as a destination of early Spanish colonization and as one of the persistently poorer countries in the Americas. Its founding colonial settlement grew from the Spanish search for people and resources they could control: unlike Buenos Aires, the region offered an agricultural society whose existing tribute and labor systems the conquistadors could appropriate.

Spanish Settlement and the Guaraní

In 1537, an expedition led by Juan de Ayolas traveled up the Paraná River in search of a route to the Inca state. There the Spanish encountered the Guaraní, a sedentary people whose agricultural economy was based on maize and cassava. After a brief conflict, the Spanish overcame Guaraní resistance and founded Nuestra Señora de Santa María de la Asunción, the town that remains Paraguay’s capital.

The conquest quickly produced a colonial elite. Spanish conquistadors married Guaraní princesses and placed themselves at the head of the existing systems of forced labor and tribute. The settlement therefore suited the colonists’ aims not because they intended to cultivate the land themselves, but because they could redirect established economic arrangements to their own benefit.

The Contrast with Buenos Aires

The founding of Asunción followed an unsuccessful Spanish settlement at Buenos Aires. Pedro de Mendoza’s 1534 mission had established a town there, but the Charrúas and Querandí refused to supply food or work for the Spaniards and attacked the settlement. The Spanish, who had not planned to feed themselves, faced hunger. The region also offered no silver or gold to exploit; the silver associated with the earlier expedition of de Solís had come from the Inca state far to the west.

The contrast explains the movement of the colonists. Seeking greater riches and populations easier to coerce, Spanish expeditions moved elsewhere; within four years of Asunción’s founding, Buenos Aires had been abandoned as its Spanish settlers moved to the new town. Buenos Aires was not resettled until 1580. The book uses this reversal to show the logic of European colonization: settlers sought not simply land, but wealth and labor extracted from others.

A Persistent Regional Divide

In a comparison of income across the Americas, Paraguay appears alongside Bolivia and Guatemala in a distinct, poorer group below countries including Colombia, the Dominican Republic, Ecuador, and Peru. The book reports that this relative ordering was already visible fifty, one hundred, and one hundred and fifty years earlier. Paraguay’s place in this comparison makes the founding-era account part of a broader argument about the persistence of economic differences within Latin America, rather than an isolated episode in colonial history.