ABSTRACT
Paraguay was perhaps the first nation in the Western Hemisphere to evidence a collective awareness of nationalism, and it has carried that sense of national uniqueness and identity through absurd height. The factors bearing upon an early fruition of national sentiment are three: race, geography, and a well-grounded sense of threat. The Chaco and the Andes blocked the way to Peru, the focus of Spanish ambitions in South America. Without the encomienda, Spanish and mestizo colonists had a bleak future in Paraguay. Poverty and isolation had wide implications for Paraguay. The country became a poor, neglected colonial outpost where the lack of currency was so pronounced that all trade was by barter, the lack of markets perpetuated the poverty and subsistence agriculture of the Guarani, and the settlers were free do as they pleased in their splendid isolation. Thousands of Paraguayan peasants were driven off the land they had farmed for generations.
