a1 Assistant Professor of Economics at Humboldt State University, School of Business &; Economics, Humboldt State University, Arcata, California 95521-8299.
When the Spaniards conquered the New World, they resorted to a form of native labor organization called the encomienda. The encomienda differed from slavery in that the Crown imposed inheritance, trading, and relocation restrictions on encomenderos. Such restrictions cost the Crown revenue by providing incentives for colonists to deplete more quickly the stock of native labor and by keeping native labour in areas of low-revenue productivity. This loss of revenue makes the Crown's Preference for the encomienda curious. The Crown opted for the encomienda, however, to secure its rule and to satisfy an ideological bias against slavery.