Economics was a primary motivator for European interest in Mesoamerica and the Caribbean. The earliest Spanish activities in the Caribbean were based around the mining of gold and silver on the islands. When the mines were exhausted, the Spanish moved their search for wealth to the mainland. As sugar and tobacco became increasingly popular commodities on the European market, the Caribbean adopted a plantation economy, and the mass importation of slaves from Africa began.

The heart of the Spanish Empire was located in the uplands of present-day Mexico and Peru, where they found vast resources of gold and silver. From the 1530s to the 1620s, silver production rose steadily in Mesoamerica. Spanish ships en route to Europe often stopped in the Caribbean. Old World tensions between European nations encouraged the plunder of Spanish ships. Piracy of Spain’s treasure by citizens of other European countries was widely permitted. Spanish fleets and New World holdings were attacked by Dutch, French, and English sailors. Some of these sailors were based from ports in west England and northern France, but as more European nations attained New World holdings, piracy became based from the East Coast of the Americas. By 1599, buccaneers had established an accepted business in piracy in many French and British ports of the Caribbean. Religious divisions also fuelled piracy in the area, as the Protestant English, Dutch, and French Huguenot fought for Catholic Spain’s resources. Spain’s rivals had some success in capturing Spanish territory during the sixteenth century, as the Spanish government provided little assistance to the islands, and they were not able to defend themselves. The lack of cultural and military centralisation severely diminished the islands defensive powers. However, the Spanish treasure fleets were well protected, and few pirates experienced much success in capturing them.

To protect their treasure fleets, Spain initiated a system of economic regulations. They closed their New World empire to outside trade, and limited their own trade with the colonies to a bi-annual convoy. The primary goals of the Spanish government were to maintain control over their American empire, and to increase their annual revenue. In the colonies themselves, most Spaniards wanted to make their fortunes quickly by finding gold and silver. These goals often manifested themselves in contradictory ways, with settlers and explorers trading illegally with Dutch, English, or French merchants, who alternately traded with and pillaged Spain’s holdings, and governmental regulations inadvertently stifling the Caribbean economy. While the system of bi-annual convoys worked for the economy in Spain, it allowed the development of powerful monopolies that prevented economic growth in the New World. The merchant guilds of Seville and Mexico City became more and more powerful within this system, and were able to set prices and dictate the trade. There was little overall improvement in the Caribbean economy during the sixteenth and seventeenth centuries, despite the increasing involvement of other European nations in the region. Like Spain, the others imposed tariffs and trade restrictions to protect their own economy. These policies were part of the central economic philosophy of the time, mercantilism.

Due to this economic stagnation, and the resulting decline in European immigration, the Caribbean islands became isolated and sparsely inhabited until the introduction of sugarcane and tobacco in the mid-seventeenth century. As the profitability of tobacco was discovered, many plantations turned to its cultivation. This encouraged much European settlement in the Caribbean, but oversupply soon caused tobacco prices to drop, diminishing its worth. Many then turned to sugar as a replacement, and while this pattern repeated itself with the cane plantations, tobacco and sugar remained the primary cash crops of the Caribbean for many years afterwards. The Dutch had marketed and popularised sugar in Europe, and also were a major provider of the slaves necessary to work the plantations.

The role of the individual explorer in search of wealth was of great importance to the history of the Caribbean. Most settlements were initially established by individual merchants as trading ports, or by agriculturalists as plantations. The joint-stock company, a common institution in European global expansion, was also central to the development of European colonies in the West Indies.

The Caribbean economy experienced its first sustained period of relative peace and economic prosperity following the Treaty of Utrecht in 1713, which ended the War of Spanish Succession. The calming of relations between European nations allowed the sugar industry to expand dramatically during the eighteenth century.

After emancipation, which occurred throughout the early and mid 1800s, movements and migrations within the Caribbean came close to destroying the economy of the region. Newly freed labourers streamed from the plantations to the cities, many looking for work in construction. Others who were more educated found work as policemen, teachers, and nurses, but very few were willing to remain as permanent labourers on the cane plantations. It was at this point that European planters began importing indentured labour, mostly from India, but also from China. Very few Europeans arrived in the Caribbean during the nineteenth century, as the threat of tropical disease and the prospect of plantation labour were both unappealing.

The Spanish exploration, conquest, and colonisation of Mesoamerica was in many ways an extension of economic patterns established in the Caribbean. As the gold and silver mines of the islands began to play out, the Spanish moved their economic focus to the mainland. Silver was discovered in much greater quantities than on the islands, and the Amerindians provided a ready source of labour for the mines. Silver mining was not the only economic activity that flourished on the mainland. Large cattle ranches provided for growing administrative and mining centres. Sugar, dyestuffs, cacao, cotton, tobacco, and coca were all vital aspects of Spanish economic activities on the mainland. Industry soon began to develop, initially in order to process harvests from farms, ranches, and plantations. Textiles were also a major industry in the region, second only to food processing. Leather, pottery, glass, furniture, soap, gunpowder, and gold and silver jewellery were also important manufactured items.

The crown and the Church attempted to initiate a segregated system in New Spain, one that was compatible with the social hierarchies of Old World Spain. However, this was only able to function within the institutions of the encomiendas and the missions, and then only minimally. Segregation broke down because the Spanish and Amerindian populations interacted on numerous fronts. The economic activities of the encomenderos, Spanish merchants, and itinerant traders brought Europeans to indigenous communities, sometimes permanently. Vagabonds, both European and Amerindian, travelled from village to village. In short, the local migrations of Europeans into indigenous communities, prompted by economic push and pull factors, diminished the extent to which a racially segregated society was possible in New Spain.

The early trade with the colonies had a significant impact on the economy of Spain. The exploitation of New World resources and labour furnished the mother country with raw materials at very low cost. Spain was then able to export finished goods to the colonists, who were dependant on Europe for such things as textiles, wine, oil, wheat, soap, glass, leather, and arms. This drove prices up considerably, contributing to the inflationary trend that had already gripped the European economy. However, the Spanish monopoly did not last long, and the Dutch, French, and English soon undercut them. The silver treasure of the New World was much needed by the ailing Spanish economy. Lack of diversification in the agriculture and industry of Spain, combined with the almost continual expense of warfare, had hampered the Spanish treasury, and forced the government of Philip II deeply into debt. Spain used the silver before it had even left the mines of Mesoamerica and the Caribbean, using it as security in borrowing. Little of the Spanish silver remained in Spain. It rapidly diffused throughout the European economy as it was used to repay foreign bankers and finance the import of items not produced in Spain.

During the seventeenth century, declining silver production in New Spain contributed to massive inflation and economic decline in Old Spain. By the late 1600s the government had managed to halt the decay, but the economic situation was dire. This contributed to political disorder and a sense of spiritual loss within Spanish society.