With the peaking of silver production by the middle decades of the seventeenth century, both at Oruro and Potosí, and its subsequent secular decline, a fundamental shift in the economic space and social organization began to occur within Upper Peru, the American region most profoundly affected by the so-called seventeenth-century crisis. The most immediate impact of the precipitous decline in silver output over the next hundred years was a steady fall in the population of most of the region's urban centers. This in turn would lead to a major retrenchment in the regional economy and affect institutions such as the hacienda and the free community. In imperial terms, the importance of Upper Peru now began to fade. By the end of the century, Mexico surpassed total Andean mining production and became as well the major source of American tax income for Spain. By the last quarter of the seventeenth century, Peru and the Charcas region had ceased exporting surplus revenues to the metropolis and were no longer to be the center of Spain's New World empire.

The dramatic decline in the cities was the first response to the silver mining depression. Both the number of miners and the number of townsmen fell sharply in the century from 1650 to 1750. The annual number of mitayos going to the mines fell from 13,500 – in groups of 4,500 in three different periods – or so Indians that were serving each year in Potosí in the 1570s to some 2,000 Indians at any one time by the 1690s.