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Most of the positives of this system were on the Spanish side. The encomienda system allowed the Conquistadors to get rewarded for their role in conquering New Spain. It also was a good way of extracting wealth from the land. It hurt the Spanish overall, to some extent, by making it harder to attract lots of Spanish to colonize.
For the Indians, the results were mostly negative as they were often abused and exploited. The main arguments in favor of the system are that the encomenderos treated "their" Indians better than the Crown treated theirs.
The encomienda was a disguised form of slavery practiced by the Spaniards in their colonies.... Read more here
The encomienda system (in theory) was a feudal-like system where Spaniards would offer protection and education to the native populations in exchange for labor and money/gifts.
In reality, the encomienda system was a horrible abuse of power and essentially slavery. It was beneficial to the Spanish because they were able to extract labor at no cost. Additionally, it enabled the Peninsulares (European-born Spaniards) and Creoles (American-born Spaniards) to maintain power and privileges at the top of the social pyramid. However, the encomienda system was not helpful to Spanish landowners who wanted to use the encomienda system to its original purpose; it ended up favoring those peninsulares and creoles who were skilled at enslaving and torturing native populations.
For the native Amerindians, there were very little positives. Negatives include abuse, forced labor, and punishment. In some situations, when there was a small crop harvest, the farmers were forced to starve themselves in order to send food to the landowners. In addition, and this applies moreso to Peru, native Americans were forced to work in gold and silver mines, where conditions were so bad that most workers died.
The encomienda system was later reformed after men such as Bartolome de las Casas informed the crown that if conditions continued under the encomienda system, the entire population would be at risk and the souls of all those involved could potentially be damned (keep in mind that colonial Spanish America was a site for Catholic missionaries). The new system was relabeled the repartamiento, which also had its flaws.
Even though the Spanish initially established the encomienda system with good intentions such as protection of the natives as well as the spread of Christianity and education, the system eventually did more harm than good to the Amerindians. The native Amerindians were disadvantaged greatly in all aspects of their lives. They were dehumanized and reduced to slave status where they provided forced labor under brutal conditions, some to the point of death. They were denied basic rights and suffered from inequality. Their land was taken from them for exploitation by the encomenderos and their family units were broken because people were separated from each other.
The Spanish mainly gained an economic advantage because they utilized cheap labor for their benefit. The Amerindians tilled the land and worked in the mines in order to pay tribute to the encomendero. Since the Indians culturally paid tribute, the Spanish took advantage of the already established norm to exploit the Indians for economic advantage.
In conclusion, whereas the Indians suffered under the encomienda system, the Spanish, especially the encomenderos, gained economic advantage by exploiting the Indians.
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