There is a general assumption in the historiography of the Spanish American economy that the eighteenth century witnessed the much closer integration of Spain's overseas possessions in the material and economic culture of Europe, as well as a deepening of the intellectual and cultural exchange between the old world and the new. At the material level the Bourbon period was one in which substantial shifts occurred in the volume of commercial exchange between Europe and America, but primarily in its intensity and its regional distribution, rather than its fundamental nature. For example, the facts that in the early-eighteenth century sugar producers in northern Peru lost their market in Buenos Aires and its hinterland in the face of competition from Brazil, and that in the 1790s Brazil and Cuba supplanted St Domingue as the source of most of the American sugar consumed in Europe were of considerable significance for regional economies, but did not really alter European or American attitudes to the importance and the utility of that commodity. In the same way, the fact that in the eighteenth century the silver production of Potosí declined, whereas that of most Mexican mining centres increased, did not significantly affect European views of the intrinsic importance of precious metals (although it did influence the commercial and strategic policies employed in the hope of exchanging European manufactures for American products). For Europe in the eighteenth century, as in the sixteenth and seventeenth, America remained above all a source of the precious metals – mainly silver – which were essential for the functioning of modern capitalism, and for the financing of Europe's trade with other regions of the world, notably the Far East. In the course of the century, as we shall explain in more detail later in this chapter, official Peruvian silver production remained fairly constant (although there was a relative shift of production from Upper to Lower Peru) at about 10 million pesos a year, while that of New Spain multiplied several times, reaching some 25 million pesos (two-thirds of all Spanish American production) by 1799.