Lynch, John. "The Origins of Spanish American Independence", In The Cambridge History of Latin America, Vol.3, From Independence to c.1870, edited by Leslie Bethell. Cambridge: Cambridge University Press, 1985.

Lynch, John. "The Origins of Spanish American Independence", In The Cambridge History of Latin America, Vol.3, From Independence to c.1870, edited by Leslie Bethell. Cambridge: Cambridge University Press, 1985.

• During the late 1700s, Spain was still an underdeveloped country with an economic system very similar to that of its colonies. Both Spain and its colonies produced primary commodities for sale elsewhere, imported almost all manufactured goods, and depended on foreign merchant ships to facilitate transatlantic trade. The only significant difference in the metropolitan and colonial economies was that some colonies produced precious metals (3).
• Although some cotton and wool mills had developed in Catalonia, they remained marginal to the overall economy. Capital in Spain was overwhelmingly concentrated in land and not invested in industry. Poor infrastructure throughout the Spanish Empire further hindered commerce or the development of industry (4-5).
• Since Spain did not have an industrial base, the Spanish Americas imported most of its manufactured goods from Britain, either legally or through smuggling in the Caribbean. Manufactured goods were usually exchanged for silver bullion (7, 16).
• The Spanish colonial government in the Americas was supported by the Catholic Church, which owned large properties and had many legal privileges, and large landowners and merchants. Most of these local elites were Criollos, descendants of European settlers, or new immigrants from Spain, called Peninsulares. Spanish colonial governments were dominated by these local interests (8). 
• Spain experienced rapid population growth during the 18th Century, growing from around 8 million to 12 million. This created more demand for food and land, pushing up agricultural prices and enriching large landowners at the expense of everyone else (4).
• The Bourbon dynasty in Spain did try to reform the economy along Enlightenment principles from the mid-1700s onward. These reforms were intended to revitalize the economy by improving agricultural productivity (3). As a result, they mainly benefitted existing landowners (4).
• These reform strategies were not coherent and drew from several different intellectual currents of the time, including the physiocrats, mercantilists, and liberals (3).
• Pressures on agricultural productivity led to a number of reforms in 1765, opening up commerce with the Americas and abolishing price caps on grain. Restrictions on the use of grazing lands and commons were removed in 1788, allowing landowners to expand agricultural production (4).
• During the Bourbon reforms of the 1780s, the Spanish colonial government sought to limit the power of local elites by centralizing administration and appointing intendants to replace the corrupt local systems of administrative finance (8-9). Previously, Spanish colonial officials did not receive a salary and instead made money by abusing their position to force peasants to sell directly to them at low prices rather than directly to merchants (9).
• These reforms backfired, as many peasants depended on the forced monopoly system for credit and were unable to purchase necessary inputs. Private merchants were largely unwilling to extend credit to farmers, based on the widespread belief that doing so was illegal. The original system usually reemerged illegally (9).
• The Bourbon government also moved against the Church, attempting to abolish its separate court system and make more of its property taxable. These moves were strongly resisted by both priests and laymen (10), with lower-ranking priests particularly angered by the removal of the legal distinction between themselves and parishioners (11).
• The Jesuits were expelled from the Americas in 1767 and their lands expropriated for sale at auction. The Jesuits possessed massive amounts of property and the entire territory of Paraguay, and thus had the power to challenge the colonial government. The expelled Jesuits and their families became a major center of opposition to Spanish rule and some of the first advocates for independent American identities (10, 41).
• From the 1750s, the Spanish government tried to increase tax revenues from Spanish America by creating new monopolies on tobacco, alcohol, gunpowder, salt, and a number of consumer goods. Taxes were also directly collected by the colonial government, rather than being contracted to tax farmers. This resulted in massive increases in tax revenue, almost all of which was used in Spain, not the colonies. During peacetime, colonial taxes represented around 20% of total Spanish revenue (12).
• The Bourbon government did not like that commerce with the Americas was dominated by foreign merchants and tried to restore Spanish control over trade with its colonies. To accomplish this, between 1765 and 1776, they lowered tariffs, abolished the mercantile monopolies of Sevilla and Cadiz companies, and legalized intra-colonial trade (15). These moves helped the Spanish export economy, but did remove the restrictions on the colonial economies (16).
• Most Spanish exports to the Americas were agricultural goods, and textiles from Catalonia, and competed with local products in the colonies. Liberalization of trade between Spain and its colonies, therefore, benefitted Spanish agriculture and textiles at the expense of colonial producers of these products (16, 21).
• The Spanish colonies competed both against Spain and against each other in trade. Lack of infrastructure meant that each colony maintained a separate economy, which often produced the same goods and competed against each other (18).
• Those few colonial industries that benefitted from liberalization still found their continued growth stymied by restrictions on trade and discrimination in favor of Spanish goods. The empowerment of merchants in Veracruz, Buenos Aires, and Guadalajara did not address these complaints, but only meant that the dissatisfied merchants were now more powerful (17).
• Industries in the Americas that successfully competed with Spanish producers were targeted by colonial officials for posing a threat to the 'natural relationship' between metropoles and colonies. Trade regulations were sometimes changed to hurt these colonial competitors, or the factories and farms themselves were destroyed (19-20).
• The reform movement died during the 1790s as the events of the French Revolution scared King Carlos IV into abandoning reform and adopting more traditional Absolutist strategies of governance (5).
• The liberalization of trade and expansion of administration during the Bourbon reforms encouraged large-scale immigration to the Americas, with Peninsulares filling nearly all of the new government and commercial positions. This generated resentment primarily among the Criollo, who recognized felt especially disadvantaged because they were denied opportunities available to their European anscesors (25-26, 28).
• The domination of Peninsulares in high-level positions seemed even more unfair because there were fewer than 150,000 Peninsulares out of a White population of 3.2 million and a total population of 16.9 million (26).
• Prior to the Bourbon reforms, the Criollos had become a powerful force in the audiencias and judicial system by purchasing venal offices. After these reforms, the Spanish government made a conscious effort to reduce the power of Criollos, placing Peninsulares in the positions of power in government and the church hierarchy. The sale of audiencia positions was also ended and the bodies stacked with Peninsulares (26-27).
• Recent scholarship disputes the degree to which the Bourbon reforms were successful in reducing the power of Criollos. Powerful Criollos families continued to control local economies and use their considerable influence to affect government policy across the Americas. There was also considerable intermarriage and social connection between Peninsulares and the Criollo elites (27-28). 
• Spain lacked the resources to maintain large military forces in the Americas, so Spain instead depended on local militia units. Soldiers were often enticed to join because it allowed governance by military, rather than civil, law. This trend was exaggerated after 1760, as colonial units took up nearly all military posts (11).
• There was an Amerindian revolt in Peru in 1780, during which the local militia units were badly beaten, and which prompted Spain to restrict the role of the colonial militias and reserve important command positions for Spaniards, believing that Criollo and Mestizo officers would not be sufficiently loyal. Coverage by military law was also limited among officers, especially non-Whites (11).
• This restriction of military legal privilege and the reservation of top ranks for Peninsulares annoyed colonial subjects, especially in Peru. Most Criollos, however, were willing to accept these new laws because they helped to maintain the White supremacy of Criollos above other racial groups in the Americas (11-12, 31).
• Racial divisions in the Americas began to blur more during the 18th Century, particularly because of the expansion of rights for Pardos, free Blacks, and Mullatos. These groups were allowed to join colonial militias and, from 1795, were allowed to purchase legal Whiteness, conferring upon them the right to hold public office, join the priesthood, go to university, and marry Whites. This lead to a reaction among the Criollos, who feared that blurred racial distinctions in the Americas would rob them of their status as White and further disadvantage them against Peninsulares (30).
• The expansion of rights for Pardos and Blacks disadvantaged Criollos because it simultaneously allowed Pardos and Blacks to compete with Criollos for trade and government positions, and heightened distinctions between Peninsulares and Criollos by reducing the distinctions between Criollos and other natives of the Americas (30-31).
• These anxieties over race were particularly tense in Venezuela and other colonies with large numbers of slaves, where they interplayed with more general anxieties about slave revolts (30-31).
• Amerindians had consistent grievances with the Spanish colonial government and were oppressed under its system of forced labor, known as mita. Taxes on agricultural goods, resentment of the mita, and exploitation by corregidores assigned to manage them all enraged Amerindians, who repeatedly rose in revolt (37-38).
• The largest of these revolts occured in Peru in November 1780, led by Jose Gabriel Tupac Amaru, an Incan noble. Jose Gabriel Tupac Amaru first sought to end abuse and promote reform through the Spanish court system in the 1770s, but, finding that useless, he started attacking corregidores and occupying towns near Cuzco (38).
• Jose Gabriel Tupac Amaru demanded the abolition of forced labor, the corregidores system, and internal customs. He also promised to lower taxes and free slaves who joined him. Despite attempts to attract Criollo support against Peninsulares, most Criollos sided with the colonial government to preserve their own power versus the Amerindians (38-39).
• The Spanish government suppressed the revolt with military force over the course of 2 years, during which all major leaders were executed and over 100,000 people died, mainly Amerindians. The corregidores system was replaced by intendants, mainly to prevent this tension from sparking another revolt (39).
• Taxation was generally resented, but especially during wartime, when they also suffered major shortages of basic goods due to blockades. The fact that many colonial subjects opposed the wars their taxes were funding increased resentment (13).
• Resistance to taxation often became violent during the second half of the 18th Century, with resentment over taxes driving the 1780 Amerindian revolt in Peru and the 1781 Criollo and Mestizo revolt in Nueva Granada. These protests became even more common after 1796, when Spain entered a period of near-constant warfare (13, 33-34).
• The 1781 revolt began in response to the high taxation and imperious manner of Viceroy Juan Francisco Gutierrez de Pineres, as small farmers, mainly Mestizos, forced out of business by his restoration of the tobacco monopoly revolted against tax collectors in El Sorroco in March 1781. They looted government warehouses and elected a Criollo farmer, Francisco Berbeo, as their leader. In June, Francisco Berbeo and Archbishop Caballero y Gongora came to an agreement for the abolition of the tobacco monopoly and lower taxes (34-35).
• Some elements of the revolt viewed the compromised worked out by Francisco Berbeo as a betrayal. Rebels in Antioqia, representing Pardos, Mestizos, Mullatos, and some rebelling slaves, elected Jose Antonio Galan, a Mullato farmer, as their leader. Criollos panicked at this new revolt and many who had supported Francisco Berbeo fought against Jose Antonio Galan, who was executed that year. This demonstrated how all of colonial society shared grievances against Spain, but that Criollo elites were willing to ally with Spain to continue dominion over the rest of colonial society (36).
• The Spanish government began demanding forced loans and contributions from wealthy families and merchant guilds. In December 1804, Spain sequestered all charitable funds in the Americas to pay war costs, resulting in the temporary seizure of the majority of the Church's capital (13-14). The decree was abolished in August 1808 (15).
• This decree was a major shock to the colonial economies, especially Mexico, as the Church was the main creditor and lender in the Americas, providing approximately 2/3 of all financing. By taking its capital funds, Spain had essentially destroyed the colonial banking system, causing many in default on payments because of lack of capital (14).
• The sequestration threatened the livelihood of priests, as many local priests depended on the interest from loans to cover their living expenses (14). 
• Opposition to the plan was nearly universal and saw the break of many Peninsulares with Spanish rule. It demonstrated the unequal relationship between the Americas and Spain, where the wealth of the Americas was taken by Spain to use in projects that had no positive impact for the Americas and in which they had no say (15).
• There were a small number of revolutionaries during the turn of the 19th Century, many of them inspired by the works of the Enlightenment and the ideals of the American, and to a lesser extent the French, revolution. These men were, however, small in number and their efforts did not go anywhere prior to the 1810s (43-46).
• Most Criollos and other elites in the Americas were horrified at the French Revolution, which they saw as destructively radical. The associated civil war in Saint Domingue created even more fear because it foreshadowed the potential fracture of Spanish American colonial society along similar racial and class divides (46-47). Spain sought to avoid any contact between its subjects and Haitians, who were denied entry at Spanish ports (47).
• Venezuela, which had a plantation economy based on Black slavery, was the most anxious about the French Revolution and the Haitian Revolution. These fears were legitimate: a slave revolt was led by free Blacks who had travelled to Haiti began in Coro on May 1795, and the Haitian navy sought to assist a revolt by Pardos in Maracaibo in establishing a Black republic in May 1799 (48).
• Isolation from Spain as a result of blockades during the Napoleonic Wars benefitted producers in the colonies, as they no longer had to compete with Spanish products. In particular, onerous restrictions on manufacturing were removed, allowing the textile industry to reemerge in the Americas (20).
• The domination of Spanish merchants in the Americas made wartime embargoes more harmful to the colonial economy. When Cadiz or other major Spanish ports were blockaded, no other source of goods existed and the colonies experienced shortages of basic goods (22).
• During the war with Britain in 1797, extreme shortages in the Americas forced Spain to open first Havana, then all American ports, to neutral merchants. The situation greatly benefitted the colonial economy, which had greater access to both export markets and imports (22).
• This freedom harmed Spanish mercantile interests, however, as they were universally outcompeted, and the old system of restrictions was restored in April 1799. The American colonies did not respect the restoration of these restrictions, however, and neutral trading continued across the entire Americas (22-23).
• Spain was forced to recognize that its American colonies openly flaunted its prohibitions on trading with foreign merchants and that it lacked the naval power to enforce its own laws, agreeing to neutral trading in Cuba and Venezuela in 1801, and instituting a system of licensing for foreign merchants across the Americas in the year (23).
• Spain essentially lost its monopoly control of trade with its American colonies after 1801, with neutral merchants, especially Americans, taking the place of Spanish merchants (23). Spain tried to reverse this development during a period of peace beginning in 1802, but the renewal of war in 1804, and the destruction of the Spanish fleet, eliminated the ability of Spain to restore the previous system of mercantile relations (24).
• The loss of Spanish mercantile power was even more intense after 1804, as Britain sought to compensate for its exclusion from Napoleon Bonaparte's continental system by expanding trade in the Americas. British merchants now made active attempts to become the primary trading partner of Spanish America (24).
• One of the few industries hindered by isolation from Spain during the turn of the 19th Century was mining, which had continuously expanded during the 18th Century and saw large-scale investment from Spain. Mines were unable to purchase mercury because of the war, holding back further growth, and Spain was unable to provide the naval protection needed to prevent piracy (20-21).
• The Spanish economy was decimated by separation from the colonies, as Spanish producers now lost a key export market. The loss of silver and gold imports also crippled the Spanish state, as it depended on these as a source of revenue; the government had to resort to extreme measures, like higher taxes or the sequester of charitable funds, to cover its expenses (24-25).
• On 27 June 1806, Britain assaulted Buenos Aires. Although they easily beat the Spanish garrison, a local army formed by town residents and led by Santiago Liniers, a French immigrant, managed to force the surrender of the British force on 12 August (25).
• Britain decided to try a similar attack again and assaulted Montevideo on 3 February 1807. The local audiencia, a council of local notables with judicial powers, dismissed the viceroy and appointed Santiago Liniers in his place. A local force led by Criollos again forced the British to surrender (25).
• The failure of Spain to protect its colonies from attack, and the success of local armies in doing so, discredited the Spanish government while moving Criollos into positions of military authority. Additionally, this was the first instance of an audiencia, a local body, removing a viceroy, an imperial official (25).
• The Napoleonic Wars crippled the Spanish government and revealed just how weak and incompetent it was. In March 1808, the Spanish court forced King Carlos IV to dismiss his favorite minister, Manuel Godoy, and abdicate in favor of his son Fernando. Napoleon Bonaparte then invaded Spain and forced King Fernando VII to abdicate in May 1808 and declared his brother, Joseph Bonaparte, the new King of Spain (50).
• Joseph Bonaparte's rule was widely denounced as illegitimate and the Spanish rose up in revolt against French occupation. Local juntas united into a single body by January 1809 and declared themselves the legitimate Spanish government. The authority of neither the French-backed Monarchy nor the Junta was widely acknowledged in the Spanish Americas, making the colonies essentially self-governing (50).