Middle Atlantic Review of Latin American Studies, 2023

Vol. 7, No. 1, 30-52

Economic Development in the Andes and

the Need for a More Environmentally
Sustainable Model:
What Can History Teach Us?

Hans-Jürgen Burchardt
University of Kassel, Germany
Maria Sibylla Merian Center for Advanced Latin American Studies
[email protected]

The mountainous region of the Andes is believed to be one of the oldest cultural
areas of humankind. The Spanish conquest of the Incan Empire brought about
a dramatic restructuring of the Andean economy, as the economic interests of
the Spanish crown centered around the exploitation of mineral resources,
especially precious metals, the labor force, and the production of agricultural
goods to ship to Europe. Colonialism left a double legacy in the Andes that
continues to have effects today: the order and bureaucratic structure of colonial
power that excluded broad segments of the population and the integration of
Latin America into the colonial system, and later the world market, as a supplier
of raw materials. This article demonstrates that the model of natural resource
exploitation, on which the economy, agriculture, and society rely, as managed
through political distribution and allocation mechanisms, is not environmentally
sustainable in the long run, though attempts at change bring significant
challenges. We consider ways in which the Incans' earlier production and
consumption patterns could contribute to greater sustainability and help
mitigate global warming by reconciling locally anchored development and
autochthonous natural and human resources with national and international
requirements.

Keywords: Andean society, Incan Empire, economic development,

sustainability, colonialism, agroecology

La región montañosa de los Andes parece ser una de las áreas culturales más
antiguas de la humanidad. La conquista española del Imperio Inca provocó una
reestructuración dramática de la economía andina, ya que los intereses
económicos de la corona española se centraron en la explotación de los
recursos minerales, especialmente los metales preciosos, la fuerza laboral y la
producción de bienes agrícolas para exportar a Europa. El colonialismo dejó un
doble legado en los Andes que sigue teniendo efectos hoy: el orden y la
estructura burocrática del poder que excluyó a amplios segmentos de la

© 2023 The Author. Published by the Middle Atlantic Council of Latin American Studies on the
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DOI: 10.23870/marlas.396
 Burchardt – Economic Development in the Andes

población y la integración de América Latina en el sistema colonial y

posteriormente en el mercado mundial como proveedora de materias primas.
Este artículo demuestra que el modelo de explotación de los recursos naturales,
de la cual dependen la economía, la agricultura y la sociedad, dirigida mediante
mecanismos políticos de distribución y asignación, no es ambientalmente
sostenible a largo plazo, aunque los intentos de cambio plantean desafíos
significativos. Consideramos las formas en que los patrones de producción y
consumo anteriores de los incas podrían contribuir a una mayor sostenibilidad
y ayudar a mitigar el calentamiento global al conciliar el desarrollo anclado
localmente y los recursos autóctonos naturales y humanos con las demandas
nacionales e internacionales.

Palabras clave: sociedad andina, Imperio incaico, desarrollo económico,

sostenibilidad, colonialismo, agroecología

Introduction

This article examines the history of economic development in the mountainous region
of the Andes. The first section focuses on the earliest civilization in the region,
followed by sections on the rise of the Incan Empire and the period following the
Spanish conquest. Taken together, this part of the article demonstrates that the
arrival of the Europeans led to a dramatic restructuring of the Andean economy, with
a double legacy that continues to have effects today. The first legacy was the
exclusion of broad segments of the population, a drastic ethnicization of the social
structure, and deep racial discrimination. The second legacy was the integration of
the region into the colonial system, and later the world market, as a supplier of raw
materials.

In the fourth section, we argue that this extractive model based on natural resource
exploitation—imposed initially by the Europeans and continued after independence—
is not environmentally sustainable. This leads to questions about what might be done
to bring about a more sustainable model and to address the pressing issue of climate
change. In seeking to answer these questions, we were influenced by Laurent Binet’s
book Civilisations (2021), which received significant acclaim for its efforts to reassess
pre-Columbian societies. The author portrays how innovative and dynamic the Incan
society was compared to European feudalism by examining the conquest. This vivid
and intriguing depiction inspired us to consider what we might learn from the past
about sustainability, specifically from the Incas. Thus, in the final section of the
article, we point to several ways that a return to Incan practices could help us develop
a sustainable economic model based on more small scale and careful use of
resources, and the long-term safeguarding of local livelihoods.

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Geography, Settlement, and Development of the Andean

Region Prior to the Incan Empire

The Andes have a distinctive altitudinal zonation1 characterized by the short distance
between mountains and the ocean and also many different biomes.2 The altitudinal
difference and location favored the emergence of extensive biodiversity, which in turn
allowed for the relatively early domestication of plants and animals. The Andean
region is important in the origins of crops. For example, the domestication of the
potato is attributed to the four-thousand-meter-high area of Lake Titicaca, and even
today, close to four hundred different potato species can be found in the region. The
Andean highlands are home to domesticated and wild camelids. The mountainous
regions in the center of the Andes have an enormous wealth of precious metals and
ores, especially lead, zinc, copper, iron ore, gold, and silver. The exploitation of these
natural resources dates back to early advanced civilizations.

The mountainous region of the Andes is believed to be one of the oldest cultural areas
of humankind (Christian 2004). The first permanent settlements in South America
were established along the west Andean coast as far back as 5000 BC. These societies
subsisted on agriculture, cattle raising, and fishing. Recent archaeological findings
from Paleoindians in Monte Verde in southern Chile suggest that South America could
have been settled more than thirty thousand years ago. This would contradict the
general theory of human arrival in this part of the globe by placing the initial
migration of the indigenous peoples of the Americas across the ice-covered Bering
Land Bridge at around fifteen thousand years ago (Braje et al. 2017; Dillehay 2000).

Caral, found in the Supe Valley on the coast of today’s Peru, is considered the first
major urban center in the Americas, founded c. 5000 BC. Irrigated agriculture and
marine fishing were in practice, and the city was carefully planned and organized in
strict symmetry. With the introduction of ceramics beginning in 1800 BC, this culture
flourished for nearly a thousand years. Caral is therefore chronologically
contemporaneous with other origins of human civilization seen in Mesopotamia,
Egypt, and India (Shady and Kleihege 2008). Following Caral, the Chavin culture

1
Altitudinal (or elevational) zonation is a concept that helps explain how and why the specific
combination of environmental factors, mainly altitude and temperature, can support different
crops and livestock. The ecosystems at higher elevations in the Andes, for example, differ
dramatically from those at lower elevations.
2
A biome is an area classified according to the species that live in that location. Temperature
range, soil type, and the amount of light and water are unique to a particular place and form
the niches for specific species, allowing scientists to define the biome. However, scientists
disagree on how many biomes exist. Some count six (forest, grassland, freshwater, marine,
desert, and tundra), others eight (separating two types of forests and adding tropical
savannah), and still others are more specific and count as many as twenty-six biomes.

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(1000–200 BC), a major pre-Inca culture,3 cultivated corn and practiced metallurgy
and became widespread throughout the Andean region (Burger 1992).

Several other regional cultures on the coast and in the highlands also produced
remarkable achievements in textiles, metalworking, and ceramics. By 1000 AD,
pastoral societies from the highlands dominated the Andes. They established a long-
distance trade and transportation monopoly by way of an elaborate llama caravan
system that linked the coast with the highlands and used trade to remedy supply
deficits, especially in plant foods. Additionally, these societies produced textiles,
jewelry, and pottery, practiced stonemasonry, constructed elaborate water canal
systems, and invented the knotted cords registry (quipos), later used by the Incas
for administration purposes. Around the year 1000 AD, more than 100,000 people
lived in urban areas and 250,000 in the surrounding countryside in Tiahuanaco, one
of the religious centers situated near Lake Titicaca. Similar statistics would not be
reached by the city of Paris until five hundred years later. The first regional mining
activities, primarily for jewelry production, can also be dated to this period (Patterson
1991).

Economic and Political Development Following the Rise of

the Incas

Evidence shows that global climate change via cooling and droughts led to a dramatic
erosion of living conditions and the decline of the early civilization described in the
previous section (Roberts 2014). After a period of deterioration, primarily small-scale
populations persisted, for example, in the coastal state of Chimú (1000–1400 AD).
These populations were characterized by complex political and highly hierarchized
social organizations which had settled in a longitudinal area of around one thousand
kilometers and adapted to the new circumstances. Their crafts, agriculture, and
fishing flourished again (Moseley 1992).

Then, the Inca civilization arose from the Peruvian highlands sometime in the early
thirteenth century. From 1438 to 1533, the Incas incorporated a large portion of
western South America, centered on the Andean Mountains, using conquest and
peaceful assimilation, among other methods. The Incan Empire became the largest
empire in pre-Columbian America. Its official language was Quechua. The
administrative, political, and military center of the empire was in the city of Cusco.

3The Chavin culture was located in the Ancash Region at an elevation of 3,180 meters, 434
kilometers north of Lima and east of the Cordillera Blanca at the start of the Conchucos
Valley.

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In their rise, the Incas made use of the knowledge and institutions founded during
the three-thousand-year-old cultural history of the Andes, to which they considered
themselves legitimate heirs. The Incas shaped and expanded traditions boldly,
inventively, and repeatedly but also with brutality. Territorial incorporation and trade
were their long-term political strategy to develop and intensify land cultivation,
increase productivity, generate food surpluses, and obtain exotic goods. Their
expansion relied on various forms of adapted agriculture and the integration of
multiethnic regions into their dominion, supported by massive resettlement and other
coercive measures. The most common means of expansion were co-optation and
assimilation, primarily through diplomacy and marriage alliances rather than outright
conquest (Bang and Bayly 2016). It is true that the subjugated peoples were
obligated to render services and labor to the Incan state. Still, the state made
investments and improved infrastructure and production conditions in the new
territories (Acuto and Leibowicz 2020). Military force and war were not forbidden but
were usually used only as a threat and last resort (Covey and Bauer 2002).

The economic basis of the Incan Empire was agriculture, which made optimal use of
the Andean altitudinal zonation and linked individual environmental zones with a
developed transportation infrastructure (Murra 1980). Four forms of settlement and
economy can be distinguished:

1. The high Andes area was characterized by rather unproductive agriculture due
to its altitude of around four thousand meters, so people tended to engage in meat
and wool production via livestock raising of llamas and alpacas (Lauer 1993). The
caravan transport that the Incas created functioned as a network for the high Andes
pastoralists. It was an essential tool in the territorial expansion of the empire and the
development of the transregional exchange and distribution system.

2. The plateau, at two to three thousand meters, was known as the Incan
agricultural center, characterized mainly by its plantations of corn, potatoes, and
quinoa. Since the alteration in temperature between day and night is more substantial
than the alteration between seasons in the Peruvian Andes, most landscapes could
be used all year, and so agriculture became a year-round occupation. Early Andean
farming communities did not have draft animals or technical equipment to aid their
efforts. Consequently, production was primarily based on human labor, resulting in
intensive and subsistence-oriented agriculture. These forms of agricultural production
were significantly enhanced by the Incas, who created essential innovations such as
large terraces, 4 irrigation canals, the cultivation of new high-yielding crops such as

4
Clark Erickson writes: “Although considerable cooperative community labor is necessary to
construct well-built terraces, once constructed the fields can produce for decades with about
the same labor input as a dry, rainfed field. Despite abandonment, no soil amendments, and

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corn and quinoa, and the introduction of easily preserved foods. The monocultural
farming of, first and foremost, corn, began under the Incas. This highland agriculture
used very complex forms of production. The working tools were versatile, and all
altitudes, climates, and natural conditions of the mountainous region were used
efficiently. It is assumed, for example, that in the agrarian village communities of
this zone, more than twenty different plants were cultivated at the same time (Cunill
1981).

3. The irrigated oases of the western coastal zones were generally characterized
by more centralized production and featured a higher degree of division of labor.
Here, fishing and irrigated agriculture increased productivity, aiding the development
of larger towns and craft centers, wherein some began to engage in manufacturing
production.

4. The warm and humid tributaries of the Amazon, dependent upon rainfall in the
Andes, located in the low eastern valleys, were also characterized by productive
agriculture and fishing. While little is known about the activities of the indigenous
people there, it is believed that these areas, now often referred to as “untouched
nature,” were once densely populated (Sales et al. 2022). However, the population
had dramatically decreased before the arrival of the Europeans, leaving few clues
about daily life or production and consumption habits.

Village communities called ayllus, which functioned prior to the rise of the Incans,
were the basis of Andean agriculture. These communities were distinguished by their
collective distribution of land, communal social supply, and division of labor, which
was usually based on complex kinship. Social rules of cooperation prevailed and
established a principle of reciprocity (minca), the exchange of equal amounts of work
time. Strengthened by their high degree of collectivity and by forms of production
adapted to their natural surroundings, the ayllus became robust local microcosms of
Incan society at large. These communities were also allowed organizational autonomy
as they were untouched by the central Incan state during territorial expansion. Their
role was vital in laying the foundation of the broader economy, which continued to
grow (Murra 2003).

When the agriculture and infrastructure of subjugated minorities were in early stages
of development, the Incas intervened and “modernized” them until these minorities
were economically able to support the empire with indentured labor. The links
between different ayllus further served to bolster the Incan Empire. In times of crisis,
the Incas provided food and goods from other regions to local communities and

lack of maintenance over the past 500 years, terrace soils maintain considerable fertility and
many are still in use” (2018, 35).

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offered emergency funds. This mode of existence, relying on interconnected

communities that share the yields of many ecosystems, has been aptly termed
“vertical archipelagos” (Murra 1978).5

The overarching structure of the Incan central administrative apparatus stretched

like an umbrella over the semiautonomous local social units. Urban, military, and
religious centers were built up and supplied through temporary labor service (mit’a)
performed by the subjects. The mit’a was a form of labor organization based on the
principle of rotation, which allowed the state to access labor needed for all areas of
the economy and the military. Men between the ages of twenty-five and fifty were
the most frequently conscripted. Work standards were well known: dangerous work
was forbidden, while rest periods and numerous holidays guaranteed the
maintenance of high-quality performance. Some sources suggest that the mit’a was
culturally understood as less of a compulsory service than a sacred offering. Since
this labor was not directed to central state projects alone, the mit’a also serviced
local communities through infrastructure construction, emergency aid, and protection
(Izumi 2018). In this way, it replicated the model of the ayllus at the central level,
which was established to a great extent on reciprocity.

Production poles (mitimaes) were created by the Incas through forced resettlements,
which specialized in agricultural or artisanal products and guaranteed the creation of
exceptionally high-quality goods (Murra 1980). Some small mining centers were also
established through the state labor service, and metallurgy was comparable to the
European standards of the time. However, metal was used quite differently. While
the hardness, strength, and sharpness of metals were optimized in Europe, the
Incans were concerned primarily with flexibility, ductility, and resilience. Europeans
used metal for equipment and tools, whereas Andean Incaic societies harnessed
metals to manifest wealth, power, and belonging. Filigree jewelry findings document
advanced knowledge of metal alloying and processing. For utilitarian and work
objects, the Incans worked with fibers as a key material, developed great creativity
and precision, and produced goods that were not inferior to European standards of
quality and durability (Lechtman 2007).

5
Tristan Platt tells us that “Murra coined the metaphor of the ‘vertical archipelago’ to
characterize the society emerging from the intermingling of colonists from different groups at
the limits of their core societies’ political reach, both upwards and downwards, and on both
Pacific and Atlantic sides of the Cordillera. Settlers were seen as living like ‘islands’ in ‘multi-
ethnic’ neighborhoods alongside other ‘islands’ placed there by other groups. And he saw the
resettlement of populations, or mitimaes, by the Inca State as a transformation of the
‘vertical’ model, in which the ideal of maximizing each society’s resource base was
transcended by state economic, military, and political strategies” (2009, 36).

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Surprisingly, the Incan economic system functioned without money or markets. The
allocation of resources and the demand for goods were regulated almost entirely by
a centrally administered, planned economy (Baudin 1944). This economy did not lead
to supply problems despite its immense expansion; instead, an abundance was
generated that allowed for ample stockpiling. These stores, packed to the brim, were
available to the elite and also used for the common good (LeVine 1992). Overall,
most of the rural Incan population had a high material standard of living. Binet (2021)
has emphasized this by contrasting the Incan peasants to the impoverished rural
population and unproductive agrarian structure of European feudalism.

Based on these data and dynamics, from the fourteenth century onward, the Incan
influence in the Andean region increased. From the fifteenth century forward, it
resulted in expansion so extensive that it made the Incan state the largest empire in
the pre-Columbian Americas for one hundred years. It is believed that the maximum
north-south extension of the Incan Empire at its height reached from central Chile to
southern Colombia, covering approximately four thousand square kilometers. Due to
geological variations, the east-west extension was more unstable but extended to
the eastern lowlands and partially to the Amazon region.6 By the sixteenth century,
the Incas ruled over two hundred and fifty local communities and 13 million people.
For this reason, some of the Spanish conquistadors compared their rule to that of the
ancient Roman Empire (Alconini and Covey 2018; McEwan 2008).

From the Conquest to the Present

In 1532, the Spanish conquistador Francisco Pizarro landed in Piura, Peru, and began
a campaign with one hundred and sixty-eight soldiers against the enormous Incan
army, eventually defeating it. Military and technical advancements, along with the
use of horses, are cited as the usual reasons for this unexpected victory. However,
various researchers doubt this explanation, demonstrating that the Incans were
superior to the Spaniards militarily. These scholars refer to documents indicating that
the local population was significantly weakened by new epidemics such as influenza,
measles, and especially smallpox, which, after the arrival of the first Europeans,
already had killed up to half the Incans (Dobyns 1963). The extent to which the
population succumbed to European diseases is controversial. Some calculations
assume that at the time of Columbus’s first voyage, over 110 million people were
living in the Americas and that they were, thus, more densely populated than Europe.
If these figures are correct, about 90 percent of the indigenous population of the
Americas had died by the seventeenth century (Kiple 1993; Lovell 1992).

6
At its largest, the empire included the territories of modern-day Peru, what are now western
Ecuador, western and south-central Bolivia, northwest Argentina, the southwesternmost tip
of Colombia and a large portion of modern-day Chile.

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A dramatic restructuring of the Andean economy followed the conquest, as the

economic interest of the Spanish crown was centered on the exploitation of mineral
resources, especially precious metals, and the production of agricultural goods that
could be shipped to Europe. Spain seized the Incan labor services in agriculture and
later in mining and turned them into permanent forced labor. This action enabled the
extreme exploitation of the resident population. The encomienda system was rapidly
introduced, which entrusted the conquistadors with estates or mining rights,
dispossessing the previous inhabitants. The indigenous people were, according to the
religious justification for the conquest, supposed to be protected and Catholicized.
However, in practice, the encomienda system that lasted a few generations in the
Andes was nothing other than a regime of absolute exploitation (Brosseder 2018;
Hemming 1970).

Additionally, a trade monopoly over the distribution of goods was introduced and, up
until the eighteenth century, forced indigenous people to buy overpriced and, often
for them, useless Spanish goods, all at excessive amounts of money, land, or labor.
As a result of these measures, there was a sharp reduction in small-scale peasant
production and a dramatic decline in the Andean highland population. The Spanish
hacienda system prevailed in agriculture. Though large landholdings promised access
to land and water, hereditary debt bondage was established via credit advances to
bind the workers to the estates, establishing a form of serfdom (Wolf and Mintz
1957).

From the sixteenth century on, mining was intensely pursued. Silver production soon
became one of the economic pillars of the Iberian colonial regime. In this context,
the silver extraction at the Cerro Rico Mountain in Potosí, in present-day Bolivia, was
key. By the beginning of the seventeenth century, Potosí had become one of the
world’s largest and most modern cities with 150,000 inhabitants, and more than
13,000 mainly indigenous mine workers (Lane 2019). These political-economic
constellations of colonialism left a double legacy in the Andes, which continues to
have an effect today.

On the one hand, the order and bureaucratic structure of the colonial power
functioned mainly through personal interventions by the highest authorities and to
the exclusion of broad segments of the population. A fusion of political and economic
elites promoted a tendency toward authoritarianism. The elites relied on exploiting
raw materials, people, and world market integration. Profits were made through
exports, the monopolization of the domestic supply structure, and (financial)
speculation. Labor, not labor productivity, was a significant source of value creation
and received little protection or improvement. This left labor as the source of value,
based on absolute exploitation, as opposed to relative exploitation (productivity and
improvement of their consumption). The emergence of a competitive local

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entrepreneurial class oriented toward the domestic market and focused on efficiency,
productivity, and innovation was not supported. Rather, local agriculture and
handicrafts were overall unproductive and insignificant for supply and markets. At
the same time, the state's interest in the domestic market and internal tax revenues
was low. Social cohesion and political participation were also of little functional
importance.7

On the other hand, colonization led to a drastic ethnic division of the social structure
in the Andes, which partly resembled a caste system. Spain established a vertical
hierarchical social formation based on social position, power, and privilege depending
on one’s family origin. The top positions in politics and the economy were reserved
for European whites, while Creoles (descendants of Europeans born in the colonies),
indigenous and black people (mainly abducted from Africa and enslaved) occupied
lower social positions in a precisely defined structure judged by their ancestry and,
often, by their appearance. The performance and quality of work were determined
and significantly hierarchized according to the racist structure at the heart of
colonization (Fisher and O’Hara 2009).

These legacies did not end with the independence wars of the nineteenth century.
Indeed, they continue to shape today’s Andean world. The region’s economy is still
dependent on the export of agricultural and raw materials. The mountainous
longitudinal areas are still preferred as cultivation regions; agriculture and haciendas
prevail with their partially capitalized forms of production, which can be seen
throughout the area’s valleys and high basins and at the base of the Cordilleras
(Denevan 2001).

With the expansion of neoliberal globalization in the 1990s, this export-oriented

growth model was further deepened via privatization, capitalization, and the
increased centralization of cultivated areas. Different goods found their demand in
the global economy and their place on the shelves of western supermarkets, including
Chilean wine, Colombian cut flowers, Ecuadoran bananas, Argentine soy, and various
coca products. Large cities, originally founded by Spaniards on the coast as trade and
transport centers, functioned as channels for the shipment of these goods and
necessitated a mass movement of people to urban areas to this end.

Urban migration was further accelerated by significant environmental damage

stemming from monocultural farming and the massive use of chemical fertilizers and
pesticides, as well as the construction of new infrastructure, particularly roads that
cut through farms and small communities. In these communities, poor income and

7
For a comparative overview of the legacies of Spanish colonization, see Burchardt and
Leinius 2022.

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deteriorated working conditions increased the pressure to migrate to cities. Various

political attempts to support small farmers and the landless through agrarian reforms,
as seen in Bolivia (1953 and 2006), Peru (1962), Ecuador (1964), and Chile (1970),
were either too timid or inconsistent and did not lead to substantial structural change
in their favor. In this context, it comes as no surprise that the rural Andean region is
still characterized by poverty, widespread social disparities, and patterns of exclusion,
implicating the colonial legacy of ethnic discrimination and the social structure in
place since colonization. The elite class in the Andean region still today is comprised
of whites of European descent, while most of the population living in misery are of
indigenous ancestry. In particular, indigenous women in rural areas count among the
most vulnerable and destitute (Cant 2018).

Since the nineteenth century, mining has become increasingly crucial for the trade
balances of Andean countries concentrated on the extraction of tin (Bolivia), copper
and saltpeter (Chile), iron ore (Colombia), bauxite (Venezuela), and lithium (Bolivia
and Chile). There is also an increasing tendency toward a reliance on the extraction
of fossil fuels, including oil (Venezuela and Ecuador), gas (Bolivia), and coal
(Colombia). State-owned and transnational corporations are primarily active in these
sectors. The extraction of fossil raw materials and mining guarantees large profits
but leads to significant soil degradation and major alterations to local vegetation.
These activities increase air and groundwater pollution and contribute to harming
plants, animals, and human communities alike. The increasing environmental
damage and precarious working conditions witnessed at extraction sites across the
Andes have not slowed such economic activities. Instead, some experts expect that
mining expansion in the Andes will gain significant momentum under the new
sustainability strategies of the United States, China, and Europe (such as
electromobility) (Gielen 2021).8

Beyond agriculture and the extraction of mineral resources, manufacturing industries

continue to play a subordinate role in the Andean region and are oriented primarily
toward the domestic market. The service sector, however, has expanded and grown
to include a large informal (urban) economy, responsible for up to 50 percent of the
working population in some countries and often under deplorable working conditions.

8
Given the decarbonization of the world economy and the war in Ukraine, the ongoing
reconfiguration of the global appetite for raw materials will likely prompt a massive rise in the
demand for “green” resources, which Latin America and the Andes are well-equipped to meet.
The region is the site of around one-third of global copper, bauxite, silver, coal, and oil
deposits, and possesses, in total, more than a third of those minerals that leading industrial
nations consider strategic economic goods for achieving the transition towards net-zero
economies. It also produces a significant share of global food staples. South America is a
global leader in the production of energy crops for biofuels, in the mining of lithium sought
by manufacturers of batteries used in electric engines, and in the storage of CO2 in forests
(Cook 2022).

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All in all, it can be said that the Andean economic system is neither socially nor
ecologically sustainable, a situation made more dire by the social and ecological
ramifications of climate change.

Dangers of the Extractive Model and Need for More

Sustainable Practices

The emphasis on raw materials in the Andean region, begun during European
colonization, is a prime example of what is referred to as neoextractivism: the
exploitation of raw materials not only as a means of economic growth but as a path
toward independent development. 9 Despite severe economic overexploitation, the
Andes remains a reservoir of natural resources whose importance is becoming
relevant in these times of climate change. The future of this mountainous
environment is closely linked to the future of global civilization. If the environmentally
destructive expansion of monocultural agriculture and industrial mining continues
apace, it will push the region and its natural environment as well as the human
communities that call it home, into environmental, economic, and social crisis.

Efforts to initiate a new phase of social development in Latin America, one of the
regions with the highest social inequality in the world (Burchardt and Lungo Rodríguez
2023), were aligned with the so-called “left turn” strategy that began in Venezuela
in 1998 and continued in the Andean countries of Argentina, Bolivia, Ecuador, and,
to a lesser extent, Chile. In short, this strategy aimed to strengthen the state
institutionally, while addressing the social question in a positive way, with the goal
of deepening democratic legitimacy and introducing new environmental protection
instruments. The economic driver of this strategy was raw material exports, which
were further accelerated by high world market prices. The increase in the exploitation
of raw materials was seen as the ideal strategy to reach the objectives because high
revenues from raw material export would fill state coffers and create the conditions
needed for active economic and social policies to pave the way for eventual economic
diversification and ecological development.10

The new extraction strategy produced a decade of economic prosperity and nurtured
hopes for independent development in the Andes. Social accomplishments were

9
The term extractivism originated in the context of colonial powers that exploited their
colonies’ raw materials and labor force for the colonial powers’ own benefit. A newer usage,
neoextractivism, refers to the post-independence emphasis on exporting raw materials to
grow the economy and use the revenues to improve living conditions and promote
development independently from the major economic powers.
10
Ecological development refers to efforts to preserve the environment and the organisms
living there while promoting biodiversity and development that does not compromise future
generations or the future of the ecosystem.

41
MARLAS 7(1), 2023, DOI: 10.23870/marlas.396
 Middle Atlantic Review of Latin American Studies

remarkable. The poverty level across Latin America was reduced from 44 percent in
2002 to 28 percent in 2013, lifting 60 million Latin Americans out of poverty across
countries (CEPAL 2015). However, it is now clear that the longed-for independence
based on a few commodities has not been achieved, despite significant shifts in this
direction. It was impossible to increase the labor productivity of agricultural domestic
production in order to become less dependent on the world market. When commodity
prices collapsed in 2014, the total vulnerability of the model became apparent. Latin
America and the Andean region once again slid into crisis with many social
achievements sent to the chopping block, and living conditions of the poorer,
especially rural, population deteriorated drastically. Progressive governments lost
political support and were punished at the ballot box and even replaced in some cases
by conservative governments (Burchardt 2017).

Neoextractivism was controversial, as it pushed the narrative of sacrificing ecological

concerns at the altar of development and provoked political upheavals that are still
unsettled. While new constitutions were written in Bolivia and Ecuador that gave
central importance to nature and environmental protection, in practice, the
exploitation of raw materials expanded to ever-newer heights, with environmentally
harmful technologies in industrial mining and fracking gaining influence. At the same
time, ideas surrounding sustainable development, such as the indigenous concept of
the good life, buen vivir, were also written into government programs but were not
practiced, nor did they garner international attention. 11

If extractivism is understood as a model of society beyond purely economic

considerations, then recourse to rent-theory approaches will help in understanding
the failure of these recent development initiatives (Burchardt, Dietz, and Warnecke-
Berger 2021). Rent-theory approaches conceive commodity income as an income
that is not based on its labor output; thus, social reproduction is primarily based on
distribution. The state responsible for a given area has limited resources and is
dependent on economic output and income taxes, and tends to secure its political
support through co-option, patronage, and corruption. Consequently, democratic
demands or controls are disrupted. Additionally, environmental pressures resulting
from the plunder of natural areas12 provoke local protests that can effectively impede

11
Buen vivir, or more precisely Sumak kawsay, is a central principle in the cosmovision of the
indigenous peoples of the Andean region that seeks material, social, and spiritual satisfaction
for all members of a community, but not at the expense of other members and not at the
expense of the natural basis of life, and can be understood as living together in diversity and
harmony with nature. The concept found its way into the new constitutions of Ecuador and
Bolivia but has had limited (or no) impact on Andean economies, politics, and society (Cortez
2021).
12
For example, monocultures of maize, potatoes, quinoa, and other crops are spreading in
the Andes region, although these crops are unsuitable for mountainous areas because they
require the use of expensive agrochemicals, which in turn lead to agrobiodiversity loss and

42
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 Burchardt – Economic Development in the Andes

resource extraction through democratic rights contestation and territorial autonomy,

threatening state revenues.13 Many Andean governments facing this situation have
responded to such demands with increasing repression (such as Peru and Venezuela).
Thus, guaranteed rights (e.g., indigenous constitutional rights to self-determination)
were weakened or withdrawn, and agreements with indigenous and ecological
movements were canceled or criminalized outright. It is precisely these extraction
conflicts that dominate social disputes today in large parts of the Andes and also
worldwide (Engels and Dietz 2017).

The natural resource-exporting development models in the Andes are characterized

by one key determinant: natural resource exploitation, on which the economy,
agriculture, and society at large rely, and it is managed mainly through political
distribution and allocation mechanisms.14 Labor performance or productivity is
economically subordinated. The prospects of independent regional and local
development are of little relevance, and politicians treat securing state legitimacy as
an unnecessary hassle. Thus, there is little need to implement decentralized, integral,
and sustainable development strategies. Nevertheless, through the last economic
boom phase in the Andean region (2003–2014), and despite different political
programs, the productivity of local agriculture was hardly promoted. Ever since
colonization, this extractive (and later neoextractive) model has shaped the internal
logic and social patterns that continue to stand in the way of sustainable development
in the rural Andean region.

The external impetus to break from these patterns does not appear on the horizon.
A look at global politics clearly shows that environmental policy actions are
dramatically lagging or even actively undermining the fundamental requirements for
protecting the planet. The envisaged energy transition may initiate a socioecological
transformation in the Global North. However, it is misdirected to assume that this will
constitute a global turnaround. With the shift toward renewable energy resources,
leading industrial nations are shifting away from fossil energy sources. Yet more
mineral raw materials are needed to generate and store these renewable energies.
Here is an illustrative example: there are six times as many raw materials in a Tesla
today as in a conventional car. Lithium, copper, and cobalt are replacing oil without

soil degradation. In addition, there is a massive loss of forest due to logging and cattle
breeding.
13
Rent theory has recently reacted to the challenges of today’s variegated forms of resource
extraction, building a bridge from pollical economy to actor coalitions and culture (Warnecke-
Berger 2021; Warnecke-Berger and Ickler 2023).
14
Coronil (2008, 19) has put this quite succinctly: whereas in market economies, “the
business of politics is business,” i.e., the state defines the key parameters for capitalist
accumulation, in rentier states “the business of business is politics.”

43
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 Middle Atlantic Review of Latin American Studies

serious inquiry as to where these raw materials come from, how they have been
mined, and by whom (Aronoff et al. 2019).

Many of these raw materials are located in the Andean region. 15 The global energy
transition provides impulses to change dependence on fossil raw materials on a
superficial level. Still, it reinforces the exploitation of other mineral raw materials and
hardens already existing social arrangements. The Andean region (for example Chile
and Colombia) is already preparing for this new phase of raw materials exploitation
under the banner of “green extractivism,” a model in which the use of ecofriendly
high-tech and climate-friendly resource extraction methods supposedly reconcile the
extraction and valorization of natural resources with the principles of sustainable
development and the goal of a “low-carbon” future for all.16 This is the dark side of
sustainability as currently conceived. The sustainability agenda remains too limited
and centered on the Global North, externalizing the costs of socioecological
transformation to the Global South.17

Moreover, it is becoming increasingly apparent that in the search for sustainable

alternatives, ecological and social concerns can no longer be set against each other,
but, rather, must go hand-in-hand. It has been sufficiently documented scientifically
that the key to fighting global hunger lies in small-scale, regional agroecology
(IAASTD 2009). Compared to industrialized agriculture, agroecological farming with
local seeds and without chemicals produces much higher yields, uses less water,
protects biodiversity, produces less food waste, ensures higher quality work, and
supports gender equality, all while doing much more to combat climate change.
However, today, animal feed is planted on a third of the world's fields, and energy
crops are grown instead of food, for example, biodiesel or ethanol. Sustainability does
not need more genetically modified crops and a new green revolution, but agricultural
reforms and committed support for rural areas.

For this, climate change, the high CO 2 emissions in industrial agriculture, the loss of
biodiversity, the risk of new zoonoses18 from factory farming—which the COVID-19
pandemic has highlighted—and the new goals of sustainable development, require a
rethinking and new action in agriculture. Basically, a worldwide re-regionalization of
agriculture now is necessary, which relies more on regional and local supply instead
of deepening global value chains. In the Andes, it is a question of developing
adaptation strategies that enable sustainable regional development, that are

15
It is expected that the lithium demand will grow more than 2000 percent by 2050, followed
by rare earth minerals, nickel, iron, and copper (Gielen 2021), turning the Andean region into
a critical hotspot for supplying raw materials needed for the global energy transition.
16
With regard to lithium, see Voskoboynik, Macmillen, and Andreucci 2021.
17
See www.extractivism.de/en for ongoing research on this topic.
18
A zoonosis is a disease that can be transmitted to humans from animals.

44
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 Burchardt – Economic Development in the Andes

balanced in a socially and ecologically compatible manner, and that are used to deal
with the problems aggravated by climate change, such as drought, heavy rainfall,
scarcity of water and resources, energy supply, and increasing morphodynamic
processes (glacial collapses, landslides, and soil erosion). Answers for climate-related
adaptation are sustainable land use (organic farming to increase the resistance of
plants), the use of water-saving irrigation technologies, and bioengineering or the
expansion of renewable energies (geothermal, solar, wind, and hydropower).

Challenges of Creating a More Sustainable Model: What Can

We Learn from the Incas?

The experiences of the Incan agrarian society described in the second section have a
lot to offer for these challenges. Their rural communities were often based on the
traditions of community awareness of solidarity and reciprocity, individual
responsibility toward the community, and caring for the environment.19 The Incans’
cosmovision, based on a recognition of the relationships between climate, space, and
time, faced climatic and geological risks and took advantage of the diversity of
ecosystems and climatic influences. Furthermore, their in-depth knowledge of soil
quality and the agricultural calendar show that their technology can become a basis
and practice of sustainable agroecology today.

The Incans’ prominent techniques included, among many other sustainable forms of
production, the highly productive technique of raised fields (waru waru), which allows
“green manuring,” doubles the depth of the fertile topsoil, and protects against frost
by storing solar heat. In addition, highly nutritional grains such as quinoa were
cultivated. Well known is the technique of terracing, which enables highly efficient
water and climate management, increases crop production, reduces the risk of
drought, and allows several harvests per year. Terraces not only increase the area
available for agriculture on the steep slopes of the Andes but also prevent erosion
and improve the efficiency of canal irrigation systems. 20 In addition, the practice of
mixed cultures was used, which reduces the risk of wind and frost as well as pest
infestation and disease (Clark 2018). Also worth mentioning are the building

19
Kosiba (2018, 242) sees this more critically with a focus on the social dynamics of the Incan
society: “Despite the expertise of their environmental engineering, however, Inca agricultural
practices may not have been sustainable. By reducing agriculture to dual or diverse
landscapes, the Incas introduced profound social tensions: first, a contradiction between how
subject communities and state authorities saw the land and its products; and second, a
practical and scheduling contradiction between labor for the community and labor for the
state.”
20
Basically, terrace cultivation and its canal system shaped the entire social organization of
the Incans. They created interdependent systems of humans and plants that required
synchronized work, task planning, and shared ritual practices among the inhabitants of
scattered settlements, leading to a close connection of land, terraces, and cities.

45
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 Middle Atlantic Review of Latin American Studies

techniques that required no CO2 emissions to fit the stonework and the technique of
“water seeding,” which involves creating small artificial lagoons (qochas) in the tops
of hills to collect rainwater and channel it to aquifers in the mountains. During the
dry season, these aquifers feed streams and bogs, preventing them from drying out
before the next rain.

We can learn a lot from the Incans. Their agricultural policies offer clever answers for
strategies of sustainable rural and regional development, which aim at a more small-
scale, careful use of resources and the long-term safeguarding of local livelihoods.
This involves the broader use of new environmentally friendly techniques and the
strengthening of small farming communities through community participation.

Based on his empirical work in Ecuador, Bebbington (1997) sees rural development
in the Andes as a complex process between tradition and modernity. This process
consists of neither the resistance of village communities to modernization, market
opening, and therefore to external influences nor to the pure continuity of local
cultural tradition. Regarding sustainability strategies, not a purely agricultural
subsistence economy nor an unrestricted opening to the market seems desirable, but
rather multiple and multilocal livelihood systems (Stadel 2008). Attempts must be
made to reconcile locally anchored development and autochthonous natural and
human, especially indigenous, resources with national and international requirements
(Rhoades 2006).

The Incans showed that these two poles can be successfully combined. This could
become a sustainability program for the future. Therefore Andolina, Laurie, and
Radcliffe (2009, 11) speak of “alternative modernities,” that is, of progress and
development in harmony with the cultural values of human communities. There is no
doubt that the Andes are an important area for research with crucial examples of how
to help sustainable strategies achieve more significant influence and success.
Indigenous communities have preserved natural and human resources that can draw
on several millennia of tradition and experience in sustainable agriculture. Combining
such potentials with today’s knowledge of diversification, efficiency, and new
techniques could help create “islands of sustainability” (Bebbington 1997) from the
former “vertical archipelagos” of the Incans. The Andes have always been the scene
of great changes in human civilization. There are good reasons why this will remain
so in the future.

46
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 Burchardt – Economic Development in the Andes

Hans-Jürgen Burchardt is a German economist and social scientist. He holds the

chair of International and Intersocietal Relations at the University of Kassel
(https://kassel-global.de/en/) and currently serves as Director of the Center for
Advanced Latin American Studies (CALAS). His research focuses on North-South
relations, commodity, environmental and social regimes in international perspectives,
development theory, and social inequality and wealth in Latin America.

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