he current Peruvian population resides here. The most attractive area in Peru is the Costa. The Costa is about 125 miles across, at its widest point, but stretches the length of the western border along the pacific.
             This cruel terrain made it extremely costly to transport goods from the inland to the coast, in particular Lima, the location of the vice regal government. This great inefficiency lead to the demise of the Peruvian economy in that goods imported from Europe through the Argentinean port of Buenos Aires could be purchased at a lower price than the domestic goods. A great deficit ensued in Peru, but was minimized by the mining of silver. Bullion paid for the imports from abroad and even from neighbors such as Chile. The tax burden laid on domestic goods in some regions made it much more cost effective to import, rendering domestic goods almost useless for export let alone for domestic consumption due to high prices. The export of bullion wrecked havoc with internal matters also as most of the silver production was sold for export. Only 40 percent of the bullion mined was available for internal consumption in the years 1785 to 1794.3 Much of the economic turmoil began, acco!
             rding to the Consultado in Lima, when Spain re-organized the viceroyalty in South America. Through Bourbon reforms the viceroyalty of Río de la Plata was formed and the area known as Upper Peru (today Bolivia) became part of this new territory, with Buenos Aires as its capital. The trade that had been generated from Upper Peru now moved through Buenos Aires and consequently set Lima, as a trading port, in motion to decline. Amidst the gloomy forecast of the already sluggish Peruvian economy, many merchants began to consider the ideas of free market activity that had already begun to work itself into the scheme of other Latin American countries.
             Escalating taxes and favoritism towards Spaniards over Mestizos and Indians began to collect v...