16th-Century Spain: Rise and Fall of the Spanish Empire
Impact of America on Spain
From the beginning of the discovery, the potential for commercial exploitation of the newly found territories was evident. The American Conquest facilitated an exchange of agricultural products previously unknown on either side of the Atlantic. Corn, potatoes, cocoa, tobacco, and peanuts were the most significant contributions from America. However, gold and silver were the greatest riches extracted from the Americas.
The new territory became a major source of income for Castile, and especially for the Crown, which controlled commercial traffic and reserved one-fifth of all imported products. However, the Spanish crown’s substantial debt, incurred to finance the expansion and subsequent maintenance of the Empire, meant that much of this treasure was spent as quickly as it was acquired.
During the first half of the sixteenth century, the Iberian Peninsula experienced significant growth, partly due to the colonization of America. Settlers demanded all sorts of products, which increased production, trade, and port activity. Furthermore, the influx of precious metals from America drove up prices, particularly in southern cities and ports where the fleets arrived laden with gold and silver.
While, in theory, gold and silver were not allowed to enter the peninsular kingdoms, this ban was not enforced. Precious metals were smuggled in, and European goods were purchased with them. The Crown also began to repay loans (primarily to support European wars) that European bankers had provided, using American silver. Gradually, a circuit formed, transferring silver from Castile to Europe. The rapid increase in the amount of metal in circulation, both in Spain and Europe, coupled with a slower growth in the range of products, fueled a sustained rise in prices, leading to a phenomenon known as the Price Revolution.
From a demographic perspective, it is estimated that only about 150,000 Spaniards emigrated to America throughout the entire century. Although this number seems small, it comprised mostly young men, impacting the populations of both the mainland and the Americas.
Sixteenth-Century Spain
The Empire of Charles V: Internal Conflicts – Communities and Germanias
With Charles I, grandson of the Catholic Monarchs, the Spanish crown passed to the Habsburg dynasty, also known as the House of Austria. The king arrived in Spain in 1517. The appointment of foreign nobles to high office, such as Adrian of Utrecht as regent of the kingdom, and Charles’s departure to be crowned emperor in 1520 (after demanding funding cuts for the trip), triggered a revolt of the principal Castilian cities, led by Toledo.
In these cities, municipal power was replaced by communes (hence the name Comunidades), formed by artisans, merchants, members of the lower nobility, and the lower clergy. Their grievances included: the return of Charles to Spain, the exclusion of foreigners from political office, the strengthening of the courts, and taxes. The conflict radicalized into an anti-aristocratic rebellion. The nobility, initially detached, joined forces with the king, and the commoners were defeated at Villalar in 1521. Their leaders—Padilla, Bravo, and Maldonado—were executed. Despite his victory, Charles dismissed the Flemish clique and paid more attention to Castilian affairs.
The Germanias movement (1519-1522) began in Valencia and Murcia and spread to Mallorca. From the outset, it had a social character. The king had confirmed the artisans’ permission to form a militia (“Germania”) in case of pirate attacks. After meeting in council, they proposed reducing the privileges of the nobles. The conflict escalated into rebellion when many nobles left the cities due to a plague outbreak, and the germanías seized local power. The imperial army, supported by the nobility, quelled the rebellion. As in Castile, the alliance between the monarchy and the nobility was consolidated.
The Spanish Monarchy of Philip II: Iberian Unity
Philip II inherited only a portion of his father’s vast empire. Charles, aware of the difficulty of governing such diverse territories, retired to Yuste in 1556 and left the imperial title and the crown of Austria to his brother Ferdinand. However, Philip inherited an even larger empire than his father, encompassing the territories of Castile (including the New World and the Pacific), Aragon (with Italy and the Netherlands), and later, Portugal and its overseas empire, inherited through his mother, Isabella of Portugal.
In 1578, King Sebastian I of Portugal died without direct descendants. The throne passed to his great-uncle, Cardinal Henry, who died two years later, also without descendants. The rightful heir was Philip II, leading to the dynastic union of the two crowns and Iberian unity. A significant portion of the Portuguese nobility and major traders believed the union could bring substantial political and economic benefits. However, the Portuguese populace did not favor annexation to Spain.
Ultimately, Philip II ordered the invasion of Portugal, led by the Duke of Alba. Spanish troops reached Lisbon with little resistance. The Portuguese Cortes proclaimed Philip II king in 1581. Following his father’s abdication, Philip established his court in Madrid, ending the tradition of an itinerant court. This distanced him from his European possessions and gave his monarchy a more Hispanic character. His closest advisors were mainly Spaniards, and his international policies and marriages prioritized the interests of Castile, which financed most of his policies.
Philip II’s foreign policy was guided by the same principles as his father’s: the defense of Catholicism and the fight against the Ottoman Turks (Battle of Lepanto, 1571). However, new challenges arose, such as the Dutch Revolt (1568-1648) and the rivalry with England, culminating in the defeat of the Spanish Armada in 1588. The failure of these policies and their high cost led Philip II to declare bankruptcy three times. By the end of his reign, Spain was bankrupt and exhausted, and its empire teetered on the brink of disintegration.
The Political Model of the Habsburgs: The Union of Kingdoms
The sixteenth-century Spanish monarchy faced the challenge of ruling territories with diverse laws, institutions, and traditions. Existing authorities, such as the nobility, the Church, the cities, and the courts, continued to operate alongside the Crown. The Habsburgs continued the policies of the Catholic Monarchs, asserting their authority through increasing control over these powers and adopting a government based on councils (polisinodial system).
The nobility was gradually replaced in government tasks by university-trained men, and mercenary armies took over military actions. The nobility increasingly became a court nobility. Simultaneously, the need for military support from the Pope allowed for greater control over the Church.
The courts met less frequently as the Crown gained access to other resources, such as American silver and loans from bankers. City councils were increasingly controlled by royal magistrates.
The government system consisted of councils:
- The Council of State, chaired by the king, addressed foreign policy and matters of state.
- The Councils of Castile, Aragon, Italy, the Indies, Portugal, and Flanders
- Advisory councils with jurisdiction over all the kingdoms, such as the Council of Finance or the Inquisition, military orders, and the Council of War (separated from the Council of State by Philip II).
Territorial diversity was significant, although some institutions were similar across several regions: Viceroys represented the monarch in certain territories, and Audiencias functioned as courts of justice. However, according to the prevailing concept of monarchy in the sixteenth century, each territory retained its own laws, government institutions, language, borders, etc.