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Economy of the Inca Empire

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Central Economy

In the Inca economy there was no large scale trade. Barter was done among individual.

In the Inca economy there was no large scale trade within its borders. Barter was done among individuals.

The Incas had a centrally planned economy, perhaps the most successful ever seen. Its success was in the efficient management of labor and the administration of resources they collected as tribute. Collective labor was the base for economic productivity and for the creation of social wealth in the Inca society. By working together people in the ayllu (the center of economic productivity) created such wealth that the Spanish were astonished with what they encountered. Every citizen was required to contribute with his labor and refusal or laziness was punishable with the death penalty. Labor was divided according to region, agriculture would be centralized in the most productive regions, ceramic production, road building, textile and other skills according to ayllus. The government collected all the surplus after local needs were met and distributed it where it was needed. In exchange for their work citizens had free clothing, food, health care and education.

The Incas did not use money, in fact they did not need it. Their economy was so efficiently planned that every citizen had their basic needs met. Economic exchanges were made using the barter system by which people traded with each other for things they needed. Archaeologists believe that there was no trading class in the Inca society. However there was external trading in small scale with tribes outside the empire mostly from the Amazon.

The Ayllu

Agriculture played an important role in the Inca economy.

Agriculture played an important role in the Inca economy.

The Incas created the most successful centrally planned economy that contributed to the creation of social wealth in Inca society. The ayllu was at the center of the Inca Empire economic success. Ayllus were composed of families that lived near each other in the same village or settlement. Ayllus also provided social cohesion as people who were born in one ayllu also married within the ayllu.  Each ayllu specialized in the production of certain products depending on its location. Agricultural ayllus were located close to fertile land and produced crops that would be optimized for the type of soil. Their output would be given to the state which in turn would redistribute it to other locations where the product was not available. Surplus would be kept in collcas, storage houses along the roads and near population centers.

Other ayllus would specialize in producing pottery, clothing or jewelry; skills were transferred from generation to generation within the same ayllu. Ayllus produced virtually anything necessary for everyday living which will be distributed by the state to other ayllus. The abundance and diversity of resources and its availability during bad crops and war made the population loyal to the local government and to the Sapa Inca..


Collective labor and taxes

Workers collecting potatoes as part of their tax labor or mita.

There were three ways in which collective labor was organized:

The first one was the ayni to help a member of the community who was in need. Helping build a house or help a sick member of the community are examples of ayni.

The second was the minka or team work for the benefit of the whole community. Examples of minka are building agricultural terraces and cleaning the irrigation canals.

The third one was the mita or the tax paid to the Inca. Since there was no currency taxes were paid with crops, cattle, textile and specially with work. Mita laborers served as soldiers, farmers, messengers, road builders, or whatever needed to be done. It was a rotational and temporary service that each member of the ayllu was required to meet. They built temples and palaces, canals for irrigation, agricultural terraces, roads, bridges and tunnels; and all without the technological assistance of the wheel. This system was a balanced system of give and take. In exchange the government would provide food, clothing and medication. This system allowed the empire to have all the necessary produce available for redistribution according to necessity and local interests..


Quipu was used by Incas as an accounting system

The Incas and their predecessor did not develop a writing system, however they created the quipu to keep track of transactions. The Quipu or Khipu were fringes of color strings attached to a horizontal string and made of cotton or llama wool. The hanging strings would contain knots which carried a meaning. There were different types of knots such as the single, figure eight and the four turn long knot. The position in which the knots were tied, the sequence of the knots and the color of the string had a particular meaning.

The Incas used the quipu as an accounting system to record taxes, keep track of livestock, measure parcels of land, recording census, as a calendar, keep track of weather and many other uses.

The largest quipu has 1,500 strings. The oldest quipu found was in the Sacred Cit of Caral Supe and dates from around 2500 BC..

The tenure of land

Land was distributed according to family size.

Land was distributed according to family size.





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  • […] or weaving. Their production would be taken to all parts of the empire and distributed, like a centralized economy. There were well specialized artisans working on art pieces such as jewelry and clothing for the […]