In 1880, the social structure of Latin America was still remarkably similar to that of the colonial period. Large estates, absentee landlords, exploited and illiterate peasantry formed the scaffolding of each country's economy, the shopkeeping and professional classes being for the most part isolated in urban enclaves. Instead of looking to the Spanish administration, the landowning classes now resorted to the caudillo or a military leader to maintain an often-precarious status quo, having little interest in improving the lot of the masses. The call for social change came largely from intellectuals, a few of whom (like the Peruvian, Manuel González Prada) were members of the landowning élite though the majority sprang from the professional and trading communities. And in Argentina and Mexico, at least, intellectuals such as Ignacio Ramírez, Guillermo Prieto, Sarmiento and Bartolomé Mitre played some part in bringing about social change.

The greatest changes that occurred in nineteenth-century Latin America, however, seem to have come about less through conscious reformist measures than through external factors. European and North American industrial expansion forced investors to look for new opportunities in the under-developed parts of the world and in the last decades of the century foreign capital began to flow into the mining industries, into railways and transport systems. Latin America became the supplier of raw materials and food products such as coffee, sugar and meat to the expanding populations of the old world.