Black Market Capital - Andrew Konove

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a couple hundred pesos to several thousand.12 Vicente Viola, the Genovese owner of a cajón in the Baratillo who died in 1767, sold products such as mirrors, screens, glasses, and other household goods imported from China and Europe, as well as stockings and woolen clothing. He had two employees, and he owned another store in Chalco, a town about thirty kilometers southeast of Mexico City. The contents of his business in the Baratillo were auctioned for a little over 1,500 pesos after his death.13 Some cajones were worth considerably more: Josef Fianca had two cajones in the Baratillo Grande whose combined value in 1780 totaled 25,000 pesos.14 Still, many other businesses in the Baratillo were much humbler. An open-air stand, or puesto, rented for around one peso per week in the late eighteenth and early nineteenth centuries, while vendors selling from tables or baskets paid only a couple of reales per week to the Ayuntamiento.15 Vendors of chía water and prepared foods, usually indigenous women, set up between the stands of the Baratillo Grande and paid little or nothing in rent.16 Those businesses were much less likely to produce written inventory records.

      As in other sectors of the colonial economy, businesses in the Baratillo depended heavily on credit.17 Import merchants sold baratilleros on credit avería—goods damaged in transit—and other products unfit for sale in their own retail outlets.18 Vendors in the Baratillo also operated a credit system among themselves. In a 1730 case against one Don Santiago Roque, who administered a stand that sold paño, a course woolen cloth, several witnesses testified that when clothing sellers in the Plaza Mayor did not have enough money to buy the cloth they needed, the would pawn their clothes to Roque in exchange for fabric. Once they sold the clothes they had made from that cloth, they would buy back the clothes they had left as collateral.19 The 1767 inventory of Vicente Viola’s assets illustrates just how integral credit, and pawnbroking in particular, were to a baratillero’s business. The file lists more than twenty individuals who owed Viola money, many identified simply as “Mariano the painter” or “the sugar confectioner in the Plaza de las Vizcaínas.” Viola also counted a number of pawned items as assets.20 More than a household subsistence strategy, pawnbroking was a key lubricant of the urban economy that incorporated street vendors, artisans, shopkeepers, and consumers.21

      The Baratillo’s customers are the most difficult participants in the market to profile because the archives offer few clues about who, exactly, shopped there. Impressionistic accounts from the era suggest that it catered mainly to the destitute and those who cared little about the provenance of the articles they purchased. In a scene in José Joaquín Fernández de Lizardi’s 1816 novel, El periquillo sarniento, the Baratillo plays precisely this role. When Perico, the protagonist, and Januario, his friend and mentor in mischief, win fifty pesos in a card game, Januario proposes:

      Let’s go to the Parián, or better yet, to the Baratillo, so we can buy some decent clothes, which will help improve our lot. They will get us better treatment everywhere … because I assure you, my brother, that although they say the habit does not make the monk … when a decent person walks around—in the streets, in house calls, in games, in dances, and even in temples—he enjoys certain attention and respect. Thus, it’s better to be a well-dressed pícaro than an hombre de bien in rags.22

      Here Lizardi plays to popular conceptions that the Baratillo’s customers were rogues and lowlifes. With a little cash, those individuals could acquire the castoffs of the wealthy and pass themselves off as respectable people. This theme appears in many late-colonial writings about the Baratillo; it was a place where the identities of both people and goods became unrecognizable, where hierarchies and the categories used to construct them became vulnerable. In the Baratillo, a rogue could turn himself into a gentleman and a casta could become a Spaniard.

      Other evidence, however, suggests that the Baratillo also appealed to better-off customers. As Juan de Viera, the administrator of Mexico City’s Colegio de San Ildefonso, wrote in 1778, the Baratillo Grande attracted “every class and quality of person” with its dizzying array of goods. Unlike other eighteenth-century writers, Viera saw not a teeming den of thieves and vagabonds but a lively bazaar that offered something for everyone.23 Archival evidence supports Viera’s observations. In 1729, Don Antonio Velasco, a member of the Real Audiencia, sold a relatively expensive cloak, worth twelve pesos, to a vendor in the Baratillo.24 The cost of such an item was roughly equal to a month’s wages for an unskilled worker in the capital in the eighteenth century.25 Given that historians have shown that members of middling and upper echelons of Mexico City society regularly used pawnshops and the Monte de Piedad, the government-run pawnshop established in 1775, it makes sense that they also would have bought and sold clothing and household goods in the Baratillo.26 The Baratillo was a commercial institution that offered an array of products—both used and new, cheap and high end—and engaged actors of diverse ethnic and socioeconomic backgrounds.

      THE SHADOW ECONOMY AND THE STATE

      The Baratillo was also a site where legal and illegal exchanges were deeply entwined. It was the nexus of Mexico City’s shadow economy, where the circuits of second-hand, stolen, counterfeit, contraband, untaxed, or otherwise illicit goods intersected. This economy linked some of the most elite traders in New Spain to some of the lowliest and connected pulperías, which often doubled as pawnshops, to artisans’ workshops and vendors in the Plaza Mayor. Colonial officials were not of one mind when it came to regulating this trade. While some authorities tried to stamp it out, others condoned or turned a blind eye to it.

      An investigation that José Antonio Lince González, Mexico City’s chief assayer and a member of the Real Audiencia, conducted into the illegal sale of gold and silver jewelry in the Baratillo in the early 1780s reveals some of the connections between the Baratillo and the city’s broader economy. The investigation sought to extinguish the trade in jewelry that lacked the “quinto” stamp indicating that the required 20 percent tax had been levied on it. These pieces were often of a lower quality than the twenty-two-carat standard the Crown had imposed. Lince González found that the gold and silver for sale in the Baratillo was coming mainly from three sources: clandestine workshops; pulperías, where the poor pawned such pieces in exchange for short-term loans; and the Real Monte de Piedad.27 The pieces circulated undetected between those locations and the Baratillo, where they blended in with the market’s clothing, tools, and household goods. This trade challenged the rigid barriers the colonial government tried to impose between artisans and merchants, whom colonial law prevented from working together, and linked the Baratillo directly to a government institution—the Monte de Piedad. It also reveals that diverse individuals were involved in the trade: some of the vendors who sold the pieces were single Spaniards, one a married morisco, and another a married Spanish “notable” who had fallen on hard times. Most were clothing sellers who claimed to trade in small valuables on the side, which is to say, they had not manufactured the pieces themselves; they had come into their possession through happenstance. It was a defense that many vendors in the Baratillo used with colonial authorities, with apparent success.28

      It is tempting to label the shadow economy Lince González uncovered an informal economy, applying a term from twentieth-century social science to the eighteenth century. Indeed, the Baratillo and the semipermanent street markets scattered around late-colonial Mexico City meet several of the criteria that scholars have used to define the informal economy: its transactions were largely unregulated and untaxed, and many of the businesses were relatively small and family owned and operated.29 Furthermore, one could argue, in the vein of neoliberal approaches to the study of informality, that the trade in unminted gold and silver pieces was a rational response to an overly burdensome regulatory regime. It was a practice that served people’s legitimate economic needs; the law simply had not caught up to reality.30

      Yet, as historians and social scientists have emphasized in recent years, creating a rigid dichotomy between formal and informal sectors obscures the many ways legal and extralegal activities were intertwined.31 In the Baratillo, untaxed and irregular goods mixed with patently illicit ones. Stolen jewelry and clothes, counterfeit coins, illegal arms, seditious books, and new and used manufactured goods of all kinds circulated alongside one another in the market. The distinction between the antisocial and the merely

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