The crisis of the Spanish monarchy in 1808, which left the nation with no government of generally accepted legitimacy, could not help but have a profound impact on the American colonies from New Spain to the Río de la Plata. With hindsight it can be seen to have greatly accelerated those forces, already at work, which eventually produced the separation of the mainland colonies from Spain. At the time, however, outright independence appeared as one of only a number of possible responses, and it still had few proponents. Spanish Americans could accept the rule of Joseph Bonaparte. Alternatively, they could swear obedience either to the provisional authorities thrown up by the Spanish movement of national resistance against the French or else to Ferdinand VII's sister Carlota; the latter had earlier taken refuge in Rio de Janéiro with her husband, Dom João, prince regent of Portugal, and from there offered to rule temporarily on behalf of her brother. Or, again, they could establish native American juntas to rule in the name of the captive Ferdinand exactly as his Spanish provinces had done. In the short run this last alternative amounted to de facto autonomy within the framework of a common monarchy, while in the long run it was to prove a transitional stage to complete separation. Autonomy was nowhere sucessfully established before 1810, but that is not sufficient reason to take that year as the start of the independence movement; it is just that until 1810 the autonomists lost all their battles.

Spain was a durable but not a developed metropolis. At the end of the eighteenth century, after three centuries of imperial rule, Spanish Americans still saw in their mother country an image of themselves. If the colonies exported primary products, so did Spain. If the colonies depended upon the merchant marine of foreigners, so did Spain. If the colonies were dominated by a seigneurial elite, disinclined to save and invest, so was Spain. The two economies differed in one activity: the colonies produced precious metals. And even this exceptional division of labour did not automatically benefit Spain. Here was a case rare in modern history – a colonial economy dependent upon an underdeveloped metropolis.

During the second half of the eighteenth century Bourbon Spain took stock of itself and sought to modernize its economy, society and institutions. Reformist ideology was eclectic in inspiration and pragmatic in intent. The starting point was Spain's own condition, especially the decline in productivity. Answers were sought in various schools of thought. The ideas of the physiocrats were invoked to establish the primacy of agriculture and the role of the state; mercantilism, to justify a more effective exploitation of colonial resources; economic liberalism, to support the removal of restrictions on trade and industry. The Enlightenment too exerted its influence, not so much in new political or philosophical ideas as in a preference for reason and experiment as opposed to authority and tradition. While these divergent trends may have been reconciled in the minds of intellectuals, they help to explain the inconsistencies in the formation of policy, as modernity struggled with tradition.

At the time of its independence from Portugal in 1822 Brazil had a population of between 4 and 5 million (if the Brazilian Indians numbering perhaps as many as 800,000 are included). This relatively small population was scattered over a vast territory of over 3 million square miles, but remained heavily concentrated in an area within 200 miles of the Atlantic coast from the provinces of the north-east (with 40–45 per cent of the total population) to Rio de Janeiro, São Paulo and the south. The only inland province with a significant population was Minas Gerais which had been the focus of the gold rush in the first half of the eighteenth century and which still accounted for 20 per cent of Brazil's population, though most of it was located in the south of the province adjoining Rio. Some provinces of the interior like Mato Grosso had populations of less than 40,000. It was an overwhelmingly rural population. The largest city was the capital, Rio de Janeiro, with around 100,000 inhabitants, while the second largest city, Salvador (Bahia), the former capital, had 60,000, and half of the provincial capitals no more than 10,000 each. Conditions of health were very poor and average life expectancy low. The general level of education was also low. Education had never been a priority of Portuguese colonial policy. As late as 1872, when the first official figures became available, only a fifth of the free population was even literate.

Portugal at the end of the eighteenth century was a small, economically backward, culturally isolated country on the edge of western Europe, with limited natural resources and only modest military and naval strength, but, at least on the face of it, with one great asset: a world-wide empire stretching across three continents which included the vast and potentially rich colony of Brazil. Portugal's overseas territories in Asia, Africa and America, and above all Brazil, were an important source of crown revenue; income over and above what was necessary to administer and maintain the empire was drawn from taxes on production, consumption and internal trade, from crown monopolies, from voluntary donations (some more voluntary than others) and from duties on imports and exports. Portugal maintained as far as possible a monopoly of trade within its empire and, as well as being the hubs of the trade in Portuguese goods, Lisbon and Oporto were the entrepots for non-Portuguese goods exported to the colonies and colonial produce imported and re-exported to the rest of Europe. Brazilian re-exports in particular – in the late eighteenth century sugar and cotton, above all – were essential for Portugal's balance of trade. England was Portugal's principal trading partner, supplying Portugal – and indirectly Brazil – with manufactured goods (mainly textiles) in return for wine, olive oil – and Brazilian cotton. (During the first three-quarters of the eighteenth century Brazilian gold had also been a major item in Anglo-Portuguese trade, legal and illegal.)

On the eve of the struggle for independence from Spain the viceroyalty of New Spain (Mexico) constituted a vast area extending from the Caribbean to the Pacific and from the borders of Guatemala and Chiapas to the huge Eastern and Western Internal Provinces, including the territory later incorporated as the south-western United States. The viceroyalty, with a population in 1814 of 6,122,000 (the United States in 1810 had a population of 7,240,000) accounted for over one-third of the total population of the Spanish overseas empire. Mexico City, the viceregal capital, was the largest city in North or South America and, with a population in 1811 of 168,811, after Madrid, the second largest city in the empire.

New Spain was also by far the richest colony of Spain. Its trade through the main port of Veracruz from 1800 to 1809 amounted to an annual average of 27.9 million pesos and in the next decade, between 1811 and 1820, to an annual average of 18 million pesos, divided equally between exports and imports. The colony's total output of goods and services stood in 1800 at approximately 240 million pesos, or roughly 40 pesos per capita. This was only half the per capita production of the United States, at that time, for example, but considerably more than that of any other American colony, Spanish or Portuguese. Agriculture and livestock, which employed approximately 80 per cent of the total labour force, produced about 39 per cent of national resources; manufacturing and cottage industries produced about 23 per cent of total output; trade accounted for 17 per cent; mining for 10 per cent; and the remaining ii per cent came from transportation, government and miscellaneous sources.

It is difficult to make sense of the cultural history of Latin America in the nineteenth century without an understanding of the age of revolutionary struggle and independence with which it begins. This would be true even if the Latin American experience at the time had not itself been so firmly inserted within the context of international events following the revolutions of 1776 and 1789, the incipient industrial revolution in Europe and the spread of liberalism following the century of enlightenment. The historical transition from European colony to independent republic (or, in the case of Brazil, from colony to independent empire), corresponds broadly to the beginning of a transition from neo-classicism, which itself had only recently replaced the baroque, to romanticism in the arts. Triumphant romanticism is the characteristic mode of the new era, particularly in literature - though the continuing influence of neo-classicism in the other arts, especially painting and architecture, is much more persistent than is generally appreciated. Hugo's equation of liberalism in politics with romanticism in literature applies more forcefully, though even more contradictorily, in Latin America than in Europe, where much of the romantic impulse was in reality an aristocratic nostalgia for the pre-scientific, pre-industrial world. This brings the historian, at the outset, up against an enduring problem in using labels for the arts in Latin American cultural history. Terms such as neo-classicism and romanticism are often inaccurate approximations even in Europe where they originated, yet critics frequently assume that they designate entire historical periods of artistic development, rather than denote the formal and conceptual contradictions of historical processes as these are reproduced in art.

Both sides in the struggle for Spanish American independence (1808–25) sought the ideological and economic support of the Catholic Church. From the beginning the church hierarchy for the most part supported the royalist cause. Under the patronato real derived from pontifical concessions to the Habsburgs in the sixteenth century, reinforced by Bourbon regalism in the eighteenth century, bishops were appointed by, dependent on and subordinate to the crown. The overwhelming majority were, in any case, peninsulares and identified with the interests of Spain. They also recognized the threat posed by revolution and liberal ideology to the established position of the Church. Bishops whose loyalty to the crown was suspect were either recalled to Spain or effectively deprived of their dioceses, as in the case of Narciso Coll i Prat of Caracas and Jose Perez y Armendariz of Cuzco. Moreover, between the restoration of Ferdinand VII in 1814 and the liberal Revolution in Spain in 1820 the metropolis provided 28 of the 42 American dioceses with new bishops of unquestioned political loyalty. There were, however, a few examples of bishops who clearly sympathized with the patriots – Antonio de San Miguel in Michoacan and Jose de Cuero y Caicedo in Quito – and some opportunists who had no difficulty coming to terms with the victory of the patriots in their region once it was an accomplished fact.

The lower clergy, especially the secular clergy, were predominantly Creole and though divided, like the Creole elite as a whole, more inclined, therefore, to support the cause of Spanish American self-rule and eventually independence.

The political and military struggles which resulted in the independence of the Latin American nations were, from the outset, a matter of concern to the whole of the European and Atlantic state system of which the Spanish and Portuguese colonies formed an integral part. This was no new interest. From the sixteenth century the fabulous wealth of the Indies had attracted the envy of other European nations, who aspired both to obtain a share of it for themselves and to deny any advantage from it to their rivals. During the eighteenth century the Family Compact between the Bourbon monarchies of Spain and France emerged as a threat to Britain. But the British offset this advantage quite effectively through an extensive clandestine trade with Spanish America; no serious attempt was made to annex any major Spanish colony to their own empire.

The stately minuet of mercantilist colonial rivalry was, however, disrupted by disturbing developments in the 1790s. The French Revolution introduced new political principles into international relations; the slave rebellion in Saint-Domingue sent a shudder of fear through all the plantation colonies of the New World; Spanish American creole dissidents, of whom Francisco de Miranda was the most outstanding, propagandized throughout Europe in favour of the emancipation of the American colonies from Spanish rule. More specifically, the extreme submiśsion of the weak Spanish monarchy to France, which involved Spain in war against Britain in 1796 and again, after a brief truce, in 1804, led the British government to consider measures against Spain's imperial possessions.

The royalist brigadier, Agustín de Iturbide, proclaimed the independence of Mexico on 24 February 1821 at Iguala, a small town in the heart of the southern, tropical tierra caliente or ‘hot country’. In his manifesto, the Plan of Iguala, Iturbide called for independence, the union of Mexicans and Spaniards and respect for the Roman Catholic Church. The form of government was to be a constitutional monarchy in which the emperor would be chosen from a European, preferably Spanish, dynasty ‘so as to give us a monarch already made and save us from fatal acts of ambition’, and the national constitution was to be drawn up by a congress. With this the first of his so-called ‘three guarantees’, Iturbide won the support of the old guerrilla fighters for independence, particularly General Vicente Guerrero who at this time was operating not far from Iguala. The second guarantee offered security to Spanish-born residents of Mexico, and with the third he sought to attract the clerical establishment by promising to preserve ecclesiastical privileges, recently under attack in Spain by the liberal, revolutionary regime. The army would take upon itself the task of ‘protecting’ the guarantees.

Iturbide's appeal proved remarkably successful. In less than six months, he was master of the country, except for the capital city and the ports of Acapulco and Veracruz. It was at Veracruz that the newly appointed Spanish captain-general, Juan O'Donojú, disembarked on 30 July. He had been instructed to introduce liberal reforms in New Spain but at the same time to ensure that the colony remained within the Spanish empire.