Ronald Batchelder Receives the Duncan Black Prize for the Best Paper in Public Choice

At the March 2014 Public Choice Society Annual Meetings in Charleston, SC, Ronald Batchelder, professor of economics at Seaver College, was presented with the Duncan Black Prize for the Best Paper in Public Choice by a senior scholar in 2013. The prize-winning paper, "The Encomienda and the Optimizing Imperialist: An Interpretation of Spanish Imperialism in the Americas" (Public Choice 156: 45-60, July 2013), coauthored with Nicolas Sanchez, College of the Holy Cross, develops a new explanation for how the Spanish encomienda system served the wealth-maximizing interest of the Spanish Crown.

The Spanish colonial empire in the Americas was assembled piecemeal through private conquest ventures that were approved by the Crown. The Crown approved a principal organizer and granted an exclusive right to conquer a specified area "in the name of the Crown;" the recipient then formed a company that included investors and soldiers to undertake the conquest and early administration of the colonial venture.

The most significant reward for the participants were temporary encomiendas which included the right to impose tribute (in the form of goods and personal services) upon specified subgroups of the indigenous population, typically for a period of three to five years initially. From the beginning, it was recognized by the Crown that the temporary encomienda system contributed to the rapid destruction of the indigenous populations. What has puzzled historians and economists who have studied the institution is why the Crown repeatedly introduced the encomienda in its most destructive form and when the encomienda population had declined significantly, the Crown would intervene by imposing restrictions that protected the encomienda populations. In each colonial episode, the same destructive form of the institution was introduced initially, followed by reassignments that had longer terms and protective restrictions, and finally the eventual control passed to the Crown. This same transformation was repeated over a period of 200 years. Since the indigenous populations eventually reverted to the Crown's tax base, why would the Crown impose an institution that acted to reduce the Crown's future tax revenues?

The central argument of the paper is that by assuming responsibility for defending its colonial assets from foreign aggression, the Crown could reduce the cost of its defense commitments by encouraging a more rapid transformation of the indigenous populations into assets that could be relocated to Spain, thus reducing the Crown's overall cost of deterring aggression. By shifting its colonial assets in this way, Spain's colonies were made less attractive to potential aggressors. In fact, the most valuable assets Spain acquired through its conquest ventures was the indigenous human population whose labor services could be transformed into outputs that were transported to Spain and then traded. Thus, the Crown was able to lower its overall defense cost for its asset-base by shifting assets from a high defense-cost location. Conventional economic theory has mostly ignored the issue of how a government establishes a deterrent to foreign aggression against its capital stock.

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Batchelder is an applied economic theorist who has published in the area of new institutional economics, and Public Choice has been a main conduit for publishing papers in this area of research.

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May 2014