Using gold and silver acquired from America through systems of forced labor, the Spanish purchased manufactured goods from Northwestern Europe, particularly the Netherlands, England, and France. This stimulated commercial expansion in Northwestern Europe, which began at this time to import grains from Eastern Europe. Thus the Spanish military conquest of America played a central role in the emergence of a European world-economy that encompassed Western Europe and Eastern Europe as well as those areas of America under the control of Spain and Portugal. Characterized by a capitalist mode of production, the European world-economy came into being during the period 1492-1640. .
There was a geographical division of labor in the emerging modern world-economy. Eastern Europe and Hispanic America were the regions in which raw materials were obtained using three forms of forced labor. (1) The encomienda was developed in Hispanic America, in which forced indigenous labor produced gold and silver bullion as well as cattle products (beef and leather) that were exported to Western Europe. The encomienda was a system in which the owner, or encomendero, was granted the right to indigenous labor by the Spanish crown. The encomendero was formally obligated to provide for the basic needs of the indigenous laborers, but in practice it was a brutal system of forced labor.
(2) In Eastern Europe, a form of forced labor that Wallerstein calls "coerced cash crop labor" was imposed on the peasantry by the Eastern European landholding class. With the emergence of a market demand in Western Europe for grains, timber and wool, the Eastern European landowning class began to impose demands on peasants for the production of these raw materials.
(3) African slaves in America, particularly in the West Indies and Brazil, produced sugar that was exported to Western Europe. The brutality of African-American slavery occurred not only in regard to the slave system of production in America but also in the brutal conditions of the forced transit from Africa to America.
Thus, during the period 1492-1640, a world-economy emerged, in which the peripheral regions (Hispanic America and Eastern Europe) produced raw materials (gold, silver, grains, sugar, wood, beef and leather), using various forms of forced labor. These peripheral regions were providing the raw materials that fueled Western European commercial expansion and economic development.
Thus emerged what would be the first of four stages in the development of the modern world-system and the capitalist world-economy.
Diamond, Jared. 1999. Guns, Germs, and Steel: The Fates of Human Societies. New York: W.W. Norton.
Wallerstein, Immanuel. 1974. The Modern World System, Vol. I. New
York: Academic Press.
__________. 1979. The Capitalist World Economy. New York: Cambridge University Press.
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, Wallerstein, world-system, world-economy, forced labor, slavery, encomienda, gold, silver, sugar