The Inca Empire – an Economic System without Money
By Kerstin Nowack, Bonn, © MoneyMuseum
(Translated by Graham Pascoe)
When the Spaniards advanced into what is now Peru in 1532, they encountered the largest of the native American empires.
The Inca empire extended across parts of six modern states. From the south of Colombia across Ecuador, Peru, Bolivia and Argentina as far as central Chile, it stretched for a length of 4,000 kilometres and a width of 500 kilometres. This immense empire had been assembled by the Incas between about 1440 and 1525, in a unique feat of military and political expansion.
Originally, the Incas were only a tiny tribe from the south of Peru. In the course of their conquests, they profited from the thousand-year-old cultural heritage of the Andean peoples. The population of 10 million people was made up of a large number of different tribes which differed in culture, religion, language and political organisation. The Incas ruled their empire from their capital Cuzco, until it was conquered by the Spaniards under Francisco Pizarro.
Despite all their variety, the subjects of the Incas had one thing in common: they were almost all farmers, shepherds and fishermen. The Andean peoples tried to produce everything they needed for themselves. Anyone who needed something had to produce it himself. That applied to families, to the elite, to priests and to the state as a whole.
Settlements were small and scattered; there were only a few large towns. Family groups (ayllus) owned fields in common and apportioned them to their members as need arose. If a family increased in numbers, they were allotted more land; if land was no longer needed, it was divided up anew. Private ownership of land was unknown.
The topography and the climate do not make it easy to live in the Andes. It is always either too mountainous, too dry or too cold. Terraced fields on mountain slopes and irrigation canals along the coast bear witness to the thousand-year-old efforts to work the land. In order to survive on the mountain heights, the Incas domesticated the llama and the alpaca, and cultivated a variety of hardy plants, such as potatoes. In more favourable regions they grew maize, beans and pumpkins. Chilli pods, coca leaves, various fruits and cotton grew in warm valleys and in the coastal regions.
For all major work, such as for example the clearing of new fields, individual households had to enlist the help of relatives and neighbours. This obligation of mutual help was one of the main principles of Andean societies. When one household helped another household – with work or material goods – they did so in the expectation of being paid back for it in the same way. Ethnologists call such an exchange of work and goods reciprocity. To be without any relatives, without anyone whose help one could rely on, thus meant poverty. Joint undertakings, such as the building of a new irrigation canal, required the cooperation of all inhabitants of the area involved.
Anything which could not be produced near the settlements could mostly be obtained from not too far away in the tropical mountains of the Andes. Ideally, a settlement would be at a height of between 2,000 and 3,500 metres, at which maize could be grown. A few hundred metres higher were the potato fields, which the inhabitants visited for brief periods for sowing and harvesting. At 4,000 metres or higher, the family group's alpacas and llamas grazed, herded by one or two adults and adolescents. Further down, at heights below 2,000 metres, some families grew chillis, coca and fruit. These families could rely on others to take care of their maize and potato fields whenever they were away. In return, they divided their produce among the families of their settlement. This economic principle is called verticality. It was made possible by the height structure of the Andes, in which several different ecosystems could be reached within a day or two's journey.
In a more complex form, this type of economy also existed in regions in which such moving back and forth was geographically impossible. The high plain around Lake Titicaca, for example, was only suited to the rearing of alpacas and llamas, and to potato-growing. To provide them with maize and other products, the inhabitants of this region maintained colonies in lower-lying valleys to the west and east. This method of exploiting resources is called the archipelago system. The local rulers divided the produce of the colonists among their subjects. Such an economic and social system, with a central distributing agency, is called redistributive.
These reciprocal and redistributive elements of Andean economies were strengthened by the Incas. Their state took over the redistributive functions and thus acquired power. In addition, the principle of self-sufficiency ensured that there was only minimal contact among the subject peoples of the empire, so that they could not combine so easily to oppose the Incas.
This Andean type of economy required only very little in the way of specialisation. Thus there were hardly any craftsmen in the villages; all necessary goods, such as clothes, were made individually by each household.
At first glance, the state finances of the Inca empire might seem particularly simple. Every household in the empire was required to provide work. This work either benefited the state directly, as in the case of road-building, or else the products of the work were delivered to the state.
The main products were agricultural. The entire population was required to work fields for the Inca empire. In newly-conquered provinces these fields were confiscated by the state; peoples who put up a stiff resistance lost more land than those who allowed themselves to be conquered peacefully. In some areas, unused land was opened up for agriculture. These fields had to be cultivated by the local population.
The people were not required to deliver up as tribute anything they produced in their own fields, but only what they produced on the fields belonging to the Incas. Such produce was taken to the provincial capitals and stored in warehouses. The warehouses issued produce to those who worked for the state, for example in road-building, as soldiers or officials. According to this Andean principle of reciprocity, the state had to provide all those who worked for it with food. The state's subjects only had to provide their labour.
To keep a check on the availability of labourers and the stock levels in the warehouses, the Incas used knotted strings (quipu). The contents of the warehouses were recorded on these strings, as were the population statistics. The entire population of the empire was divided up by provinces into decimal units of 10, 100, 1,000 and 10,000 households. These statistics gave information about the potential of a region, and served to allocate labour. For example, 5 per cent of 1,000 households, or 50 people, might be designated for the building of new warehouses. That did not mean, however, that the other households were unaffected – they were obliged to work the fields of those who were absent.
Only households, i.e. married couples at the best age for labouring, between about 20 and 50 years, had to work for the Incas. Single people, widows, adolescents, the old and the sick were not required to provide labour, but only contributed to the joint production of their own households.
By about 1520 the Inca empire had reached its greatest extent. Ordinary labour was no longer enough to provide all the state's needs. Conquests on the fringes of the empire were taking longer and longer. To supply the needs of the army, the Incas set up agricultural projects in particularly favourable situations such as the Cochabamba Valley in Bolivia. Here the original population was moved away and new groups were settled on the land, who grew maize, assisted by labourers from neighbouring provinces. In all, 14,000 people were employed there, of whom some lived permanently in the valley while others went there only for seasonal work such as the harvest.
Movements of population also took place in order to secure Inca rule in newly conquered or rebellious provinces. Such resettled people (mitimaes) were recorded separately in the population statistics, but were treated as locals for the purpose of allotting work. Whereas most mitimaes were farmers, some performed special tasks, for example as defenders of fortresses on the frontiers of the empire.
People who permanently took on special tasks, were called camayos. Camayos formed small groups of specialists, who were employed, for example, in growing coca in the eastern Andean valleys, in mining, in salt-working, or as craftsmen like potters or goldsmiths. Like the mitimaes, the camayos retained their links with their home tribes. If the numbers of mitimaes orcamayos fell below the numbers originally laid down, new households were drafted in from the home tribes, so that the Inca empire could continue to receive the necessary goods and services.
Finally, certain kinds of labour were carried out by selected women, the aclla. These women were taken away from their families as young girls and accommodated in special houses in provincial centres, where they were instructed in the production of elaborately woven textiles for the Inca state. From the ranks of these aclla, wives were chosen for deserving members of local elites or for Inca officials, while some aclla served as sacrificial victims for the Andean gods.
Members of the elite used the labour of yanacona, i.e dependent families. Yanacona cultivated the fields or performed more valuable work; they were excused working for the state. Members of provincial elites enjoyed the services of three or five yanacona families, while whole villages of yanacona worked on the private estates of the Inca nobility.
Since Andean cultures had no writing apart from the knotted strings mentioned above, there are only a few semi-mythological accounts of the early period of the Inca empire. According to Inca accounts, the ancestors of their rulers moved into the Cuzco Valley and settled there after assimilating or driving away the original inhabitants. There was never an actual Inca people, at best only related groups who arrived with the Incas, plus the subjugated population of Cuzco.
The Incas proper are the descendants of the rulers. Thanks to the practice of polygamy, each ruler had a large number of children. When a ruler died he was mummified and worshipped as an ancestor. He remained the head of his family and owner of his possessions such as palaces, fields and country residences. His descendants formed a community (panaca) which administered the possessions of their ancestor and lived from its produce. The panaca, the real Inca nobility, were the ruling class of the empire, amounting to between 2,000 and 3,000 people. In addition, there were the members of some families who were regarded as closely related to the nobility, and finally the group of "honorary Incas," consisting of the tribes living around Cuzco.
Military leaders and provincial officials were drawn from the Inca nobility and the "honorary Incas." They were supplied from the state warehouses when they were working for the empire. In Cuzco itself, they lived either from the produce of their own fields, or received food and other goods from the warehouses near the city. The tribes living within about 50 kilometres of the capital were obliged to deliver food and other goods. Every four months, the population of Cuzco received rations out of the warehouses that had been filled in this way.
The administration of the Inca empire rested not only upon the relatively small group of Inca officials, but also on the shoulders of the members of local ruling families, the curaca. As had been the case before the Inca conquest, these local elites were supplied by their subjects, who cultivated their fields and provided labour for their households. If they performed their tasks to the satisfaction of the Incas, the curaca also received prestige goods such as ceramics and clothes in the Inca style. Some of them were also rewarded by being allotted an aclla as a wife.
The Incas behaved in the same way towards the huaca, the supernatural beings. These too owned fields, servants and herds to supply their priests and offer them sacrifices. If the Inca state wished to reward a huaca, for example for support during a military campaign, it was given appropriate gifts.
Trade and markets did not play a major role in the Inca empire. Only in fringe areas, on the coast of what is now Peru and in northern Ecuador, can the activity of traders be proved. In the valley of Chincha on the southern coast of Peru there are said to have been 30,000 households (some 150,000 inhabitants) at the time of the Spanish conquest, of whom 6,000 engaged in trade. These traders were said to be the only people in the entire empire who used money, in the form of copper goods (which are unfortunately not described any more precisely), with which they bought food and clothes. They travelled as far as Bolivia and Ecuador to trade in gold objects and precious stones.
From Ecuador these traders probably imported spondylus shells, a kind of mollusc that only occurs in warmer waters in that area. The shells and the plates made from them (mullu) had for millennia been an important sacrificial object for the gods. There was a trading network based on trade with these shells along the coasts of Ecuador and Peru, in which traders travelled along the coast on balsawood rafts. As well as the shells, they transported luxury goods such as high-quality textiles.
Whether the money-like copper objects played any part in those exchanges is hard to say. Along the Ecuadorian coast, associated with local cultures datable to around 1000 AD, objects known as hachas monetas (money-axes) have been found. These objects, between 1 and 9 centimetres long, were made of hammered copper sheets. They could not have been used as tools owing to their small size and thinness. Whole bundles of them were used as grave goods. It is thought they were also used as a means of exchange. Related objects of an I-shape, called naipes, are found from the same date associated with a culture in the Lambayeque Valley on the northern coast of Peru. The small area in which these objects have been found would seem to rule out their use as a means of exchange.
In the Inca period, these objects were no longer in use. Instead, the cultures of Ecuador used beads called chaquira, made of bone, gold or shells, as a means of exchange. From the north of Ecuador, for example from the Chincha Valley, there are descriptions of traders (mindalaes) who specialised in long-distance trade in luxury goods. These goods were not sold in a market trading system, but were incorporated into the distribution systems of the local rulers. Markets, in the sense of regular meetings of buyers and sellers, evidently did not exist in the central Andes.
The absence of markets and trade, which seem to European eyes such essential features of "real" economic systems, was puzzling even to the Spaniards. That is why an observer praised the inhabitants of the Chincha Valley as "reasonable and civilised," because, unusually, they had both trade and a form of money.
Ever since the 16th century, philosophers in Europe have seen the Inca empire as a benevolent despotism in which private property was unknown and the life of each individual was regulated by the state. In the 19th and 20th centuries, the Inca empire was seen as a positive, or as a negative, example of a socialist state, or at least an early welfare state. According to the standpoint of the observer, what was emphasised was either the absence of poverty or the lack of personal freedom.
At the end of the 19th century there was a change, when first of all Marxists claimed that the common ownership of land and the lack of private property were a mark of voluntary cooperatives in the sense of Friedrich Engels. For Marxists, the Inca empire could not be a socialist state, because that would have contradicted Marx's prophecies about the course of human history.
Not until the second half of the 20th century were these ideas taken up again. It was recognised that the 16th-century Spanish authors were pursuing their own purposes in describing the Inca empire as an ideal state, in order to hold a mirror up to their own society. The members of the Inca nobility whom they questioned about the past tended to exaggerate the power of the Inca empire. Recent research has thus moved away from a centralistic interpretation of the Inca empire. The most important features of the Inca economy, such as reciprocity and redistribution, are seen today as traditional forms of economic activity in the Andes which are thousands of years old, not an invention of the Incas.
But that will not be the last word. As shown by the maize-growing practised in the Cochabamba Valley, there were indeed massive interventions by the Incas into the regional economy. The debate about what the economy of the Inca empire was really like is far from over.