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Using the example of nineteenth-century Bolivia, this article argues that economic motivations need to be taken into account in understanding the role of peasants in constructing Latin American nation-states, especially in the Andes. Based on local archives, it considers the case of the altiplano region of Oruro-Poopó. From this perspective, during the half-century that followed independence, Andean communities were mostly in favour of a free-trade regime. They were integrated into the nation-state, but in a subordinate position. By the 1850s there was such prosperity in trading activities that community members refused to participate as authorities in their communities due to the time it would consume. However, the assault on community lands that began in the 1860s impoverished the Indians and marginalised them as peasants, turning them into a threat to the new, racist nation-state. [ABSTRACT FROM AUTHOR]