Debt Peonage in Granada, Nicaragua, 1870-1930: Labor in a Noncapitalist Transition

The rise of coffee cultivation was a watershed in Nicaraguan history. Prior to the 1880s, most land was common property; thereafter, land in coffee districts was privately owned. Before coffee, peasants labored largely in household and communal production; afterward, many rural Nicaraguans worked on coffee estates for several months out of the year. ¹ In the past, historians viewed this revolution in land and labor as Nicaragua's capitalist transition. Notwithstanding major disagreements about how capitalism developed, they agreed that land privatization dispossessed the peasantry and promoted the spread of free wage labor. ² This interpretation fit the prevailing Central American historiography: namely, that the coffee boom was the region's great capitalist transformation. ³ In the 1990s, Central American historians overturned part of this orthodoxy by demonstrating that the expansion of coffee cultivation did not separate most peasants from the land. ⁴ However, on the dual issue of wage labor and the rise of capitalism, the earlier consensus largely retained its hold. ⁵ For Nicaragua, there is mounting evidence that between 1870 and 1930 the production regime on coffee plantations was not a capitalist one. Recently, Jeffrey Gould argued that free labor did not prevail in the highlands coffee zone. ⁶ My study of labor relations in Diriomo, a municipality in the department of Granada, reaches similar conclusions. In the southern coffee zone, debt peonage was a largely coercive production regime, more dissimilar than similar to free wage labor.

This history of upheaval in the countryside is told largely by the men and women of Diriomo. The words of peons, planters, and local officials who lived a century ago have survived in court records, official correspondence, estate papers, and the mountain of paperwork generated by Nicaragua's forced-labor regime. Alongside voices from generations past are contemporary Diriomeños' stories, handed down from the epoch of the great coffee boom to the present day. Their memories come from the oral histories I collected in the pueblo in the 1990s. The great diversity of voices, past and present, vividly describes the everyday lives of peasants, planters, and politicians who willingly and unwillingly found themselves drawn into the fabric of Nicaragua's debt peonage regime.

Debt Peonage Debates Revisited

Some 20 years ago, historians' understanding of Latin American debt peonage changed dramatically. Before the 1970s, peonage was considered a coercive labor regime that exemplified Latin American "feudalism." ⁷ In the 1980s, historians turned this interpretation upside down and portrayed peonage as a largely consensual system that accelerated the development of agrarian capitalism. The writings of Arnold Bauer and Alan Knight were pivotal to this paradigmatic shift. ⁸ Convinced that the older literature had flattened out the complexities of unfree labor, Bauer examined how the market came to dominate labor relations in the countryside. Drawing on Karl Polanyi's study of Europe's great capitalist transformations, Bauer proposed that similar upheavals occurred between 1870 and 1930 in Latin America. ⁹ In his view, most planters deployed debt as a market incentive to coax peasants away from subsistence production and into the wage labor force of the region's expanding capitalist economies. He concluded that debt peonage undermined nonmarket relations throughout the countryside and gave rise to societies based on free wage labor.

Widening the temporal and conceptual reach of Bauer's model, Knight developed a typology that sorted peonage into three categories. In type I, debts represented salary advances within an incipient system of free wage labor; in type II, debts were derivative of voluntary and mainly market relations between landlords and peons; in type III, debts were coercive measures—"an excuse for servitude." ¹⁰ Knight argued that in Mexico type II was probably the most common form of peonage from the colonial period until the early nineteenth century, when proto-free wage labor (type I) came to prevail. In recognition of its ubiquity...