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Use Cases
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Pricing
1492 - 1493
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Colombus arrived somewhere around Cuba
1494 - 1495
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This treaty is signed by the Spanish colonizer and the Portuguese colonizer, separating Brazil from the rest of Latin America
Brazil did not have much silver or gold, so they started out with agriculture.
1500 - 1600
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This system first started in Brazil and later spread all over Latin America. Lands and slaves (indigenous people) were divided into sectors and given to the lords. With in the Encomienda, there were small Mitas: the small portion on the land that people lived a subsistent farming life style.
1520 - 1600
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Cortes came to Central America. He arrived with 500 hundred soldiers and met the Aztec. They wanted gold. The Aztec thought they were gods so they gor devastated by the Spanish and nearby tribes. They became slaves working in the mines. Temples got burned and gold was extracted. Instead of gold, the Spanish found lots of silver in stead. Aztec people got infected by diseases from outside. They died off. The evidence shows that at that time total GDP fell sharply but per capital GDP increased! Scary!
The gold and silver extraction lasted for 50 - 60 years
Recovery of GDP started in 1600
1600 - 1800
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The Spanish solidified the economy by restricting what could be produced in the colonies.
The colonies could not trade among each other.
Everything was controlled by the Crown.
Pirates emerged. They were highly democratic people. (Market will find its way!)
1600 - 1900
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As the encomienda system lost its effectiveness, it was gradually replaced by the hacienda and latifundio systems of landed estates. These are quite similar systems, but with some important differences. The hacienda, called estancia in Argentina and Uruguay and fazenda in Brazil ("Hacienda"), is a more neutral term that can mean the same as a ranch.
It was a labor-intensive enterprise cultivating only a portion of land under its control for a small-scale market; haciendas were usually self-sufficient. The hacienda provided the owner with economic return as well as social prestige and political influence. The labor force was usually Indians who were theoretically free-wage workers. However, in practice, their employers were able to bind them to the land by keeping
them in an indebted state by giving them loans or advances on wages (Delpar 271). In fact, by the 19th century, up to half of the rural population of Mexico was entangled in this peonage system ("Hacienda"), reflecting the influence of the encomienda system. Many of these estates were broken up as the result of the Mexican Revolution of 1911.
1800 - 1801
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People in Spanish colonials started rebelling against the Spanish Crown.
The main reasons are
2 Big Complains:
1) Lack of services (restricted trade)
2) Lack of leadership for American-Born people
1 Opportunities: The French was controlling the Spanish crown (weak)
1800 - 1821
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1820 - 1870
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These are very bad years.
Economic relationship disrupted.
The rest of Europe had already established strong ties with the US/France, so Latin American countries couldn't break in for trade.
Trade friction e.g. Rum vs. Hard cider
1821 - 1824
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The achievement of independence for Brazilian wasn't that bad.
Portuguese just gave Brazil up because they were observing the frequently disruptive wars in Spanish colonies.
1870 - 1910
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Industrial Revolution started in US and Europe.
Technological Revolution: railroads and refrigeration enhanced export or agricultural commodities.
This cause the big raw material sucking boom by US and Europe from Latin America for the industrial revolution.
Export Led Growth based on primary product started and continued for a while.
1910 - 1920
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People got frustrated with the export model
Why?
1. They were being subjected to foreign demand
2. The model inhibits industrialization because of specialization in primary product.
The Dutch Disease: no diversification, let financial resource rely on on particular industry, which in this case was raw materials like coffee, tin and banana. When the price of the commodity fell, the whole economy collapsed.
4.Quantity needed is stable but the price was very volatile. The input is much more volatile than the output. Highly elastic.
1910 - 1911
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This was a war over land and people. They wanted to get rid of the old, unequal land system. Very bloody; around 1 million death.
1919 - 1920
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Mexico: Ejidos land reform from lords to communal land split.
This gave rise to the PRI (Institutional Revolutionary Party)
The PRI governed for the next 70 years
1930 - 1960
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ISI took root in Latin America
1960 - 1980
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Domestic market was saturated and ended with debt crisis
1973 - 1974
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The Oil Crisis: OPEC pushed oil price up.
There was "petrol dollar": oil exporters were so rich so they put money in banks in NYC. Those banks then lent out money to Latin American countries with very low interest rates, thinking that it would stay like that forever....but it didn't
1980 - 1990
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1990 - 2013
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