Economy and Society in 16th and 17th Century Spain: Habsburg Era
Economy and Society in Spain in the 16th Century
In the 16th century, the Spanish economy was characterized by several key features:
- Agriculture: Agricultural practices were outdated, and the poor distribution of land hindered modernization. Rainfed crops like vines and cereals were important, especially in Castile. Irrigation was crucial in Andalusia, Aragon, Catalonia, and Valencia.
- Livestock: Nomadic sheep farming was prominent in Castile, supported by the Catholic Monarchs and Charles I. The Mesta (a powerful association of sheep owners) gained significant importance but later declined due to opposition from farmers.
- Industry: The early 16th century saw remarkable industrial progress due to population and price increases, the American market, and the relative abundance of raw materials like wool, silk, leather, and iron. However, by mid-century, industry began to wane due to the export of these raw materials, the tax burden, the antiquated structure of the guilds, and technological delays.
- Services: The inland transportation network was underdeveloped, making trade difficult and expensive. Maritime trade flourished with Italy, Flanders, England, and America.
The monarchy’s efforts to maintain hegemony in Europe required vast sums of money, leading to a policy of raising revenue through various means:
- Taxes: Established by the Catholic Monarchs, taxes were expanded as needed.
- American Silver: Silver from the Americas became the primary source of funding.
- Lenders: Initially, German bankers were prominent under Charles I, but after 1528, they lost ground to Genoese bankers.
Despite considerable income, the system was unsustainable, especially when shipments of American metal became scarce. Consequently, the century saw a succession of bankruptcies.
16th Century Spanish Society
The society of the 16th century was stratified, with a pyramidal structure based on privileges and estates:
- The Third Estate: Comprised the bulk of the population and was responsible for paying taxes.
- The Nobility: Consisted of leading members of the aristocracy with palatial estates and enormous privileges. The lower nobility, or hidalgos, were often penniless.
The Habsburgs in 17th Century Spain: Governments and Conflicts
While Charles I and Philip II used secretaries as mere assistants, Philip III ushered in the era of validos, who virtually handled all governmental affairs.
Philip III (1598-1621)
Philip III’s first valido was the Duke of Lerma, who lacked political education and honesty. He was known for selling favors and rights. He was eventually deposed and appointed cardinal to avoid the gallows. His successor, his son the Duke of Uceda, was more honest and concerned about finances.
During Philip III’s reign, despite a decline in wars, taxes continued to rise. Several bankruptcies were addressed through the coinage of fleece and the expulsion of the Moriscos in 1609. The expulsion was poorly received in Valencia and Aragon, causing economic and demographic problems.
Philip IV (1621-1665)
Philip IV’s chief valido was the Count-Duke of Olivares, who attempted to reform the administration and implemented trade protectionism, which inadvertently hindered the emergence of industry. He tried to abolish the tax exemptions of the peninsular kingdoms and created the Union of Arms, requiring mandatory military participation from all kingdoms. However, this initiative failed due to opposition. He was succeeded by Luis de Haro, who was more balanced and realistic.
Due to the ongoing wars in Flanders and France, the Count-Duke attempted financial reforms that were opposed by the privileged classes. This, along with other mismanagement, led to the loss of moral unity in the peninsula, resulting in various riots and the outbreak of the crisis of 1640.
Charles II (1665-1700)
Charles II‘s first valido was Father Nithard, followed by Fernando Valenzuela (the Queen Mother’s confessor and lover). Subsequently, Don Juan José of Austria took charge, leading the Councils. Later, the Duke of Medinaceli and the Count of Oropesa implemented economic reforms that initially disrupted trade but were beneficial in the long run.