What economic systems underpinned Spanish colonies in the New World?

The Spanish colonies in the New World were underpinned by the encomienda and hacienda systems.

The encomienda system was a labour system that the Spanish crown established in the American colonies. It was a legal system that was used by the Spanish crown during the Spanish colonization of the Americas to regulate Native Americans and to reward individual Spaniards for services to the crown. The Spanish monarch granted a number of natives for whom the encomenderos, the recipients of the grant, were to take responsibility. The natives had to pay a tribute in gold, in kind, or in labour and were required to be instructed in the Christian faith. The encomenderos were in turn responsible for their protection, their spiritual and material welfare, and their instruction in the Spanish language and the Catholic faith.

The hacienda system was a type of large estate in Spanish America, often including various outbuildings and annexed lands. The owner, or hacendado, held a large amount of land and a significant number of indigenous labourers. The labourers worked the land in exchange for a small plot of land and a modest wage, but they were often tied to the hacienda through debt. The hacendado had significant control over the lives of his labourers, including their working conditions, their housing, and even their religion. The hacienda system was a form of feudalism, with the hacendado as the lord and the labourers as his serfs.

These systems were designed to extract wealth from the colonies and send it back to Spain. They were exploitative and often brutal, leading to significant resistance and rebellion among the indigenous populations. Despite this, they were remarkably effective at generating wealth for the Spanish crown and the colonial elites, and they played a significant role in shaping the social, economic, and political structures of the New World.