Summary of HISTORIA - Prosperidad falaz

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The video explores the topic of "Prosperidad Falaz," or false prosperity, in Peru during the late 19th century. The era was characterized by economic growth, foreign investment, and exploitation of natural resources and labor, mainly driven by the booming exportation of guano. However, the wealth generated was mostly enjoyed by the wealthy criollo class, leaving the lower classes neglected. Furthermore, the government's excessive spending on state bureaucracy and failing to invest in infrastructure led to enormous external debt, perpetuating the debt cycle. The video also highlights the corruption and scandal surrounding the consolidation law and the emergence of wealthy consignees who invested in profitable businesses like sugar and cotton estates, leading to the formation of Peru's oligarchy of the 20th century. The era of prosperity ultimately ended with the declaration of war on Peru by Spain and the country's inability to repay its debts.

  • 00:00:00 In this section, the video discusses the topic of "Prosperidad Falaz," which is a frequent subject on university admissions exams in Peru. It refers to the period from 1845 to 1871, commonly known as the era of guano and saltpeter, where guano, a valuable resource, provided huge amounts of income to the Peruvian government. However, while this period was characterized as a time of economic prosperity, not all Peruvians were able to benefit from it. The video explains that this wealth was mostly enjoyed by the wealthy criollo class, leaving the lower classes, consisting of slaves and indigenous populations, neglected. Overall, it was a time of great wealth for some but not all in Peruvian history.
  • 00:05:00 In this section, the video discusses the false prosperity that occurred in Peru during the 19th century. While the elites benefited from the country's wealth, there were many external threats to Peru's resources, including attempts by countries like North America, Britain, and Spain to take away the riches that came from guano. Military governments became essential in protecting the criollo class from these external threats. However, the wealth generated by guano ultimately resulted in an enormous external debt that led to a fiscal bankruptcy, which was a terrible situation when Peru faced the War of the Pacific with Chile.
  • 00:10:00 In this section, the video discusses the characteristics of the era of false prosperity in Peru during the late 19th century. During this time, industrialization was flourishing in countries like Great Britain, France, the US, Germany, and Japan. These countries needed large quantities of guano, which was found on islands off the coast of Peru, to produce cotton for their textile industries. As a result, Peru was able to sell guano at a high price to these countries and experienced a period of economic prosperity. It was also during this time that European countries were expanding their empires by colonizing other countries to obtain resources. This era of false prosperity in Peru was characterized by economic growth, but also by the exploitation of natural resources and labor in the country.
  • 00:15:00 In this section, the video discusses the economic characteristics of the prosperity in Peru during the guano boom. The country sold guano in three ways: leasing, consignment, and monopolizing. The first way was leasing, and a Peruvian merchant named Francisco Quiros proposed to President Gamara to rent out unoccupied islands with bird colonies. However, though Quiros made millions by selling the guano in Europe, the Peruvian government only received a small rental fee, which did not benefit Peru. Ramon Castillo later annulled the leasing contract and proposed a new method, which was to mine the guano on the Chincha Islands and transport it to Europe. However, since the Peruvian aristocracy was bankrupt due to the War of Independence, Castillo struggled to find investors to finance the project.
  • 00:20:00 In this section, the video explains the three ways in which guano sales were conducted in Peru during the 19th century, which included the "contrato por consignación," where an intermediary between Peru and Europe earned 94% of the profits and the state only received the remaining 6%, as well as the arrival of a Frenchman named Augusto Dreyfus, who acquired all of the guano in exchange for a large sum of money, resulting in a monopoly. However, beyond the economic aspect, the video also highlights the social characteristic of Peru's prosperity, which was the promotion of foreign migration to fill the labor shortage caused by the country's small population of 1.5 million at the time, leading to the arrival of Europeans, Asians, and Chinese who came for various reasons such as working as laborers or promoting trade.
  • 00:25:00 In this section, we learn that during the period of prosperity for Peru, other countries attempted to invade and colonize South America, leading to the Peruvian government taking on the role of defending Latin America and organizing meetings with other leaders in Lima to oppose foreign invasions. The government during this time was characterized by military rule, with many famous military leaders emerging, including Castilla. However, while this period was marked by the economic success of exporting guano, it ultimately failed to achieve its goals in the long term. Overall, this section provides a historical context for understanding the period of prosperity in Peru and the factors that contributed to its eventual downfall.
  • 00:30:00 this section, the video discusses the first militarism period in Peru, which was marked by chaos and poverty. The first governments were characterized by constant coups and a lack of resources. However, the chaos ended in 1845 with the election of Castilla, which marked the beginning of a new period of prosperity. This period of prosperity was falaz, or false, as it was based on urban wealth that led to a multitude of debts. The video also notes that during this time, Peru tried to establish a commercial connection with England, which was undergoing its first industrial revolution.
  • 00:35:00 In this section, the speaker explains how the world's need for resources during the second industrial revolution led to the prosperity of many countries, including Peru, as they were able to provide materials such as cotton and food to the industrialized nations. Additionally, the speaker notes that during this time, countries with imperialistic tendencies, such as Great Britain, France, and Japan, colonized other areas to acquire resources. The speaker then breaks down the prosperity of Peru into three periods: the first period being under the governments of Castilla, the second being the war with Spain, and the third concluding with the government of Colonel Jose Balta. During Castilla's government, a contract for the sale of guano was established, which benefited Peru economically.
  • 00:40:00 In this section, the video explains that despite the prosperity that came with the guano boom, Peru made the mistake of spending over 50% of its income on state bureaucracy, including salaries for politicians, military personnel, congress members and ministers. This left little money for investment in areas such as factories and transportation infrastructure. As a result, Peru began to accumulate debt, both externally with Britain and internally with local criollos who had lent money during the country's struggle for independence. Castilla's government attempted to pay off these debts by requesting more money from consignación and giving out continuous advance payments, perpetuating the debt cycle for Peru in the long run.
  • 00:45:00 In this section, we learn about the debt that Peru accumulated during the period of the country's independence, which was owed to the Creoles who had supported the revolution financially. Castilla, the president in power, recognized this debt and passed the Consolidation Law to repay the Creoles. The amount of the internal debt was about five million pesos at the time, a large sum. Furthermore, because there was a shortage of workers in the country, Castilla passed the Chinese Migration Law, which brought immigrants from Asia to work on the haciendas. Although the new migrants were already struggling because of the low wages paid to them, even more problems arose because of the inhumane treatment they experienced. Castilla aspired to create a maritime power to defend Peru against its potential enemies and bought the first steam warship in South America. Castilla buy-in of the Lima-Callao railway was also a landmark as it put Peru at the forefront of South American countries in terms of technological advancement. In conclusion, the efforts of Castilla's government to make Peru a modernized nation did not end with his rule; his successor, Jose Rufino Echenique, also contributed to the development of Peru by further expanding Peru's transportation and defense capabilities.
  • 00:50:00 In this section, we learn about the scandal of consolidation, a corruption scandal that occurred during a time of prosperity in Peru. The government at the time, led by Echenique, was paying off the internal debt using the Law of Consolidation, which allowed payments to be made. However, unscrupulous creoles began to present fake documents and take advantage of the situation, resulting in the debt increasing from 5 to 23 million pesos. The scandal led to accusations of corruption against Echenique, who continued to pay out without investigating the origins of the documents. Furthermore, during this period, racism was rampant, and people believed in the idea of four races, with the white European race viewed as the most superior. The government, therefore, brought in German immigrants to promote commerce and development, which resulted in the promotion of fluvial commerce through the Amazon river.
  • 00:55:00 In this section, we learn about the second government of Castilla, where the criollos in Peru who had received money from the internal debt during Echenique's government invested in the most profitable business in Peru: becoming consignees. They formed a group of wealthy consignees who founded a company that sold guano to Europe, and when they earned the 6% interest on loans made to the state, their money went into buying estates in the coastal regions for the production of sugar and cotton. In the future, they would become the oligarchy or sugar barons of the 20th century in Peru. However, Spain tried to take back its former colony's wealth, so they declare war on Peru in 1865, 40 years after Peru got its independence.

01:00:00 - 01:20:00

The video discusses the history of Spain's colonization of Ecuador, Peru, Bolivia, and Chile, as well as the Spanish scientific expedition to South America. Spain needed colonies to obtain resources to develop its industries, but couldn't come to America openly due to opposition from countries like Peru and the United States. Therefore, they sent a scientific expedition disguised as a peaceful expedition. The video also discusses how Peruvians sold guano to a French entrepreneur who paid them a monthly sum of money that kept building on the debt, leading to more fiscal mismanagement. The Peruvian government then gave access to foreign companies for the mining of saltpeter, which led to the formation of the first political party in Peruvian history, the Civil Party, and ultimately the War of the Pacific.

  • 01:00:00 In this section, the speaker explains why Spain came to colonize Ecuador, Peru, Bolivia, and Chile. He argues that Spain needed colonies to obtain resources, which would allow them to develop their industries. While countries like Great Britain, France, and Germany had colonies to extract raw materials from, Spain had lost all of its colonies 40 years prior and therefore lacked resources and industrial development. Spain's objective in colonizing these four countries was not just to obtain guano, but rather to achieve their main goal of recovering their lost colonies in order to give a boost to their industry. However, the speaker explains that Spain could not come to America openly because there were countries like Peru and the United States, which opposed external invasions. Therefore, Spain sent its scientists to disguise themselves and explore the region in order to carry out their mission.
  • 01:05:00 In this section, the history of the Spanish scientific expedition to South America is discussed. The Spanish sent 11 ships carrying botanists, zoologists, physicists, chemists, mathematicians, linguists, and historians to study the continent and spread their culture. However, they came disguised as a scientific expedition to camouflage their true intentions. The expedition arrived in Argentina and later Chile, Peru, and Panama, where they stayed for two years. The pretext for their extended stay was the death of a Spanish landowner in Peru, which led to the Spanish demanding to investigate and causing the famous Treaty of Miraflores, which compelled Peru to cede the Chincha Islands and pay Spain for damages.
  • 01:10:00 In this section, the history of Peru's relationship with Spain is discussed, specifically the debt that had been accruing since Peru's independence. The president at the time, Mariano Ignacio Prado, declared war on Spain, however, it was largely due to the interests of the consignatarios, a group of non-criollo businessmen who feared losing their businesses if Spain were to recolonize Peru. The war ended with a victory for Peru and the consignatarios, but the country was left with significant debt. President Baltazar La Torre believed that the sale of guano could help alleviate the debt, but warned that it could also bankrupt the country if not handled properly.
  • 01:15:00 In this section, the video discusses how Peru began to look for someone more economically solvent than the Peruvians to buy the guano. As a result, they struck a deal with a French entrepreneur who owned a commercial company called Aupetit Frères, which was a big monopole in the world, known as the house of pounds and had more money than the Peruvians. Balthar offered more money than everyone else along with two million soles on the table, and the deal was made. The French then paid the Peruvians a monthly sum of money, which kept building on the debt. This ultimately led to the Grifos contract which did not fare much better in terms of fiscal management. However, there was a solution to the debt problem - selling saltpeter, which Peru produces in abundance.
  • 01:20:00 In this section, it is explained how the Peruvian government under Balta gave the resources to foreign companies, specifically for the mining of saltpeter. These companies were usually a joint venture between Chilean and English firms who were given access to Peruvian resources and then sold the saltpeter throughout the world, leaving Peruvians without access. This led to the formation of the first political party in Peruvian history, the Civil Party, which was led by the ex-consignees of guano, who were determined to regain control of the country's resources. Manuel Pardo, the leader of the Civil Party, was elected as the first civilian president of Peru. However, the legacy left by the military government was a national debt that the civilian government had to solve. The ex-consignees, now running the government, were tasked with recovering the country's resources, which would ultimately lead to the War of the Pacific.

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