Seeking prosperity. The new peruvian elite and their investments in banking and agricultural export in the guano times (1860-1880)

Abstract

In the middle of the 19th century, after a period of economic stagnation, guano exports managed to reconnect Peru with the world market, increasing the State’s income. This income was transferred, through various mechanisms, to a small group of merchants and landowners, thus restoring their position as a leading group and forming a new elite that was to lead the country towards prosperity. This new elite was made up of families of aristocratic origin and emerging merchants. This group invested their capital in banking and export agriculture, seeking to escape from the economic dependence on guano, assuming risks and taking advantage of the international situation for exports. It was believed that export diversification would achieve significant economic progress for the country, raising living standards and real per capita income. However, prosperity was not achieved, not for lack of capital and disinterest in achieving prosperity, but because of traditional practices inherited from the colony, such as servile labor relations, a deficient internal market and a fragile State with imperfect institutions.