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Thread: Reason for the decline of the Spanish Empire

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    Reason for the decline of the Spanish Empire

    My younger brother recently got the very fun "Sid Meier's Pirates!" , and it got me thinking on why Spain who had built one of the greatest empires of all time declined so quickly, and went from superpower to second rate power in about 150 years. So can any of the smart people here provide me with anwsers?
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    Partially it's due to structural weaknesses in the spanish empire: It was made up of a bunch of different disparate units that only with difficulty could be manuevered into the same direction.
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    Quote Originally Posted by Arilou View Post
    Partially it's due to structural weaknesses in the spanish empire: It was made up of a bunch of different disparate units that only with difficulty could be manuevered into the same direction.
    Really? That didn't harm the British Empire, during its heyday.

    It's true that the Spanish empire was far-flung, that communications with the more remote parts of the empire were difficult, and that the royal government had trouble imposing its will uniformly throughout the empire. But Madrid was pretty good at extracting (some) taxes from the empire, and keeping overall political control.

    That's more than you can say about the British empire of the 18th century, who tolerated (voluntarily? or because they had to?) the political autonomy of their North American colonies, and promptly lost them once the colonies thought they didn't need the colonies any more.

    There was dissent in the colonies, but the governors kept a lid on that dissent, and kept sending taxes to Madrid, until Napoleon marched into Spain and overthrew the monarchy. Spain descended into war and political chaos, and only then (!) did the colonies go and overthrow the Peninsulares, i.e. the Madrid-appointed governors and their hangers-on.

    Without the Napoleonic War, Spain would never have descended into such chaos, and I don't see why the colonies wouldn't have remained in awe of the crown's powers and remained obedient for another 20-30 years. Provided no other war came along and ravaged Spain, of course.

    The main problem for the Spanish, and the main reason why Spain stopped being a great power long before the lost their empire, was that the empire's vast distances meant that policing and defending that empire was very expensive. So expensive that the taxes levied from the empire barely sufficed to pay for it. Had the Spanish been better at promoting economic growth in their colonies, maybe they could have levied more taxes, and would have remained a great power... but then again, the colonies were very sparsely populated, and during those time economic growth was very difficult without population growth. Gold and silver mining yielded huge profits but the mines were exhausted. Even a better government would have had trouble in averting the decline of the Spanish Empire.

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    They ran out of quickly and cheaply minable new world gold and silver. The British Empire was ultimately sustained by a strong economy producing things that held the empire together - steamships, telegraphs, cannons, rifles, etc. Spain did not make stuff - Spain bought stuff from elsewhere with shiny metal. When the shiny metal ran out, so did everything else.
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    Without the Napoleonic War, Spain would never have descended into such chaos, and I don't see why the colonies wouldn't have remained in awe of the crown's powers and remained obedient for another 20-30 years. Provided no other war came along and ravaged Spain, of course.
    The combined effects of the battle of Trafalgar at sea, the invasion by the French on land and the Bolivar revolution overseas certainly did not help indeed.

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    Quote Originally Posted by gagenater View Post
    They ran out of quickly and cheaply minable new world gold and silver. The British Empire was ultimately sustained by a strong economy producing things that held the empire together - steamships, telegraphs, cannons, rifles, etc. Spain did not make stuff - Spain bought stuff from elsewhere with shiny metal. When the shiny metal ran out, so did everything else.
    The Spanish colonial empire produced lots of other stuff too. Agricultural products like sugar, tropical wood, foodstuffs etc etc. Manufacturing wasn't their strong side, though.

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    Undermining their core territory, economically and demographically while being unable to effectively centralize politically and draw on the resources of even its Iberian patrimony. The Spanish kingdoms came out of the middle ages and the Reconquista possessing all the elements necessary for success in the following key areas:

    Trade - Established sea and land routes, especially those of the Aragonese and the Biscayan coast. A developing mercantile class (in large part depending on the acumen of Jewish communities). The production of wool, cloth, and a decent agricultural base (again in part depending on expertise and the absentee system managed by Moriscos).

    Sea Power - Drawing on some of the factors that sustain trade you've got a ship building know how and experienced sea men, as well as the need to sustain overseas Aragonese possessions and protect Atlantic trade, gives the basis for naval power and its maintenance. For these reasons Castille and Aragon were naval powerhouses in the late Middle Ages on.

    Land Power - Experience born out of the constant back and forth raiding and conflict between Muslim and Christian gave an unparalleled military tradition and tough campaigners. Combine that with the continuing draw of plunder and conflict propelling the ambitious and capable into the nobility you've got some good leadership too (England got a taste of this in the HYW).

    There are other factors too, but these I think are the main ones in which Spain really excelled early on and propelled it to success. Ultimately though it did not tend to its most necessary strengths (economy, knowledge base) and exaggerated its others. You might say the military ambitions that built its superiority on the land and drove its extraordinary colonial conquests also fueled a culture of martial-mania to the denigration of trade and construction, which I think in part explains the way the Spanish interior and her colonies were handled. I mean they went from hard won shipbuilding expertise in the 15th century to relying on Dutch merchants to carry bullion during the heights of the Revolts and from agricultural surplus to famines by the 17th century!

    Basically Castillian Spain could only do so much, and write so many checks before it collapsed out of exhaustion. The Spanish Empire in its Golden Age was built and sustained on foundations that were not inexhaustible and were not tended to, and the inevitable was reaped. Still it remains one of the most incredible stories of human energy and expansion, with some key lessons for all of us fortunate to look back on it from our privileged vantage point.
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    Quote Originally Posted by Leviathan07 View Post
    The Spanish colonial empire produced lots of other stuff too. Agricultural products like sugar, tropical wood, foodstuffs etc etc. Manufacturing wasn't their strong side, though.
    Agricultural products and tropical woods for the most part are very bulky items. and often very perishable too - it's hard to get a large profit on them. Easy to build a rich society locally with them, yes, but Spain for the most part organized it's colonies to funnel wealth back to the center - not to be self supporting areas of large population themselves. Sugar and a few other things (tea, spices, coffee) were key exceptions, as the valuable part of the agricultural commodity was reasonably compact and didn't spoil easily. However unlike mineral wealth these things could for the most part be grown in many places, so once the potential for profit was realized many competitors sprang up.
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    While reading on the empire, I couldn't shrug off the impression that Castile alone bore all the weight of imperial ambition. The other domains were contributing to all the wars only when they were bordering the enemies directly. I doubt Leviathan's suggestion that the government was efficient at collecting any decent taxes (contributions) outside Castile. Certainly wasn't the case for Aragon/Valencia/Barcelona. Thus, why should it have been true for Naples/Sicily/Sardinia/Lombardy? (Although, frankly, early modern Italy is my blind spot, Venice/Florence/Genoa aside. How were these political units - Naples/Sicily/Lombardy - governed? How were they doing economically over time? Tsk, gotta search for a book.)

    The trading tradition of Barcelona and Valencia was severely harmed by inner turmoils, the expulsion of the Jews and repeated royal bankruptcies ruining all the people with capital required for trade. Agriculture was allegedly seriously harmed by the government favoring pastoralism for wool to export. Specific conditions made Castillian manufacture more expensive and thus uncompetitive. There was an interesting notion that government bonds were so profitable, that the people with money chose to buy them rather than invest into anything else. (Forced loans stepped in when the wealthy Castilians were reluctant apparently. )

    Having to fight the whole world probably didn't help much either.
    ...Bah. Now I have the urge to read about Bourbon Spain.

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    Quote Originally Posted by gagenater View Post
    They ran out of quickly and cheaply minable new world gold and silver. The British Empire was ultimately sustained by a strong economy producing things that held the empire together - steamships, telegraphs, cannons, rifles, etc. Spain did not make stuff - Spain bought stuff from elsewhere with shiny metal. When the shiny metal ran out, so did everything else.
    The silver supply was constantly increasing.

    I'd say that generally the eventual cause was that the core of the empire (Iberia) was relatively weak. Had it been not, the financial and political crises could end other way.
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    Quote Originally Posted by DarthMaur View Post
    The silver supply was constantly increasing.

    I'd say that generally the eventual cause was that the core of the empire (Iberia) was relatively weak. Had it been not, the financial and political crises could end other way.
    I wouldn't say constantly. There were quite a few booms and busts. More critically though was that Spain was bringing so much silver on to the world market that it was depressing the price. For a time this was made up for by increased volumes of silver being mined. However when production started to slow down, prices didn't come back up with it. Thus in the later empire era the total weight of silver coming from the new world was still enormous, but it didn't have the same buying power that smaller volumes had earlier. Plus when the silver first started to come in, the economy of Spain was already functional in other areas, and the silver and gold was 'lagniappe'. Later on the economy of Spain WAS silver and gold, and it was relied upon as the chief income of the state - not just as a bonus, or supplement or rainy day fund or whatever. It's quite similar to modern petrostates. When the oil first starts to flow it seems as if everyone will eventually get rich. Then vast projects are dreamed up which use up the money, or which dribble it away - subsidies for home heating, subsidized bread, border disputes, loans made on future revenues. Before you know it what once seemed like a vast stream of glittering wealth has become a mundane and vital need without which the critical machinery of the state will grind to a halt.
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    I'd say a main contributor is that the Spanish kings were too ambitious. Perhaps understandable considering the power of the Hapsburg empire, but things like invading England, continuing the war against the Dutch, seizing the crown of Portugal, trying to stamp out German protestantism etc. all at the same time as trying to deal with France and the Ottomans just grossly overextended the empire.
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    Quote Originally Posted by gagenater View Post
    I wouldn't say constantly. There were quite a few booms and busts. More critically though was that Spain was bringing so much silver on to the world market that it was depressing the price. For a time this was made up for by increased volumes of silver being mined. However when production started to slow down, prices didn't come back up with it. Thus in the later empire era the total weight of silver coming from the new world was still enormous, but it didn't have the same buying power that smaller volumes had earlier. Plus when the silver first started to come in, the economy of Spain was already functional in other areas, and the silver and gold was 'lagniappe'. Later on the economy of Spain WAS silver and gold, and it was relied upon as the chief income of the state - not just as a bonus, or supplement or rainy day fund or whatever. It's quite similar to modern petrostates. When the oil first starts to flow it seems as if everyone will eventually get rich. Then vast projects are dreamed up which use up the money, or which dribble it away - subsidies for home heating, subsidized bread, border disputes, loans made on future revenues. Before you know it what once seemed like a vast stream of glittering wealth has become a mundane and vital need without which the critical machinery of the state will grind to a halt.
    Don't make me dig up numbers, i'm way too lazy for that . Yes, it wasn't steady increase, but generally the silver supply was increasing (and when Mexican mines ran dry they got new ones in Potosi. Or vice versa, i'm not sure ). Of course, whether it kept up with price inflation, or, more importantly, whether any of the silver - after, say, 1580 - ended in crown coffers instead of foreign bankers and debt-holders is another matter.

    In the end, the raw production was significantly higher when Spain was in terminal state than when it was energetic empire - that's what i object to, not the existence of price inflation (which didn't negate the increase, IIRC, but i'm not so sure), or the state of Iberian economy.

    Btw, i remember Portuguese getting huge increase in gold production from Brazil in XVIIIc, too.
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    Quote Originally Posted by DarthMaur View Post
    In the end, the raw production was significantly higher when Spain was in terminal state than when it was energetic empire - that's what i object to, not the existence of price inflation (which didn't negate the increase, IIRC, but i'm not so sure), or the state of Iberian economy.
    IRC their ability to ship a steady rate of production was hampered as time went on. In fact they were often very low on bullion themselves, as it was needed to pay off foreign debts and mint coins in their attached Habsburg states, so I wonder at the old claim that the influx of precious metals ruined the Spanish economy. If anything I've gotten the impression that it was one of their assets, only one that was insufficient or not well exploited.
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    It's true that the Spanish empire was far-flung, that communications with the more remote parts of the empire were difficult, and that the royal government had trouble imposing its will uniformly throughout the empire. But Madrid was pretty good at extracting (some) taxes from the empire, and keeping overall political control.
    Not really. It kept decent tabs on the colonies (largely because those were all castillian projects and subject to the relatively uniform castillian laws) but the Netherlands revolted the moment the spanish tried to squeeze anything out of them, and Italy was what Italy has always been: A quagmire of legal complications, overlapping jurisdictions, and generally a huge complication. The Crown of Aragon brought very little to the table.

    Basically, Castille was economically anemic but had the politicial and military clout. Aragon was somewhat more developed but very resistant against any kind of strengthened central power. (as seen as the revolts in the early 1600's and 1700's) The Netherlands were hyperdeveloped but even more troublesome than Aragon (and unlike Aragon were not left alone) Italy was pretty much a mess.

    That left the colonies, who were very profitable, but suffered from being both far-flung and vulnerable to others.
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    Quote Originally Posted by Arilou View Post
    Basically, Castille was economically anemic but had the politicial and military clout. Aragon was somewhat more developed but very resistant against any kind of strengthened central power. (as seen as the revolts in the early 1600's and 1700's) The Netherlands were hyperdeveloped but even more troublesome than Aragon (and unlike Aragon were not left alone) Italy was pretty much a mess.
    I can't remember the source but I read a book some time back demonstrating that Aragon was in an economic slump and state of political ferment at the time of the union, while Castile was ascendant, while the roles were nearly reversed in the 18th and 19th centuries when Castile was exhausted and Catalonia was on its way to becoming the prosperous part of Spain. Rather ironic, but the main point was that if Castile had instead been able to pursue union with Portugal as intended, (provided they could overcome their mutual antagonisms) the two ascendants may have pursued an entirely different trajectory (N. Africa, India, Americas) and never been saddled with the Habsburg domains. A lot of ifs, but one can wonder.
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    Didnt expelling muslims&jews from the Iberian peninsula made their economy even weaker in the long turn?
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    Quote Originally Posted by Arilou View Post
    Partially it's due to structural weaknesses in the spanish empire: It was made up of a bunch of different disparate units that only with difficulty could be manuevered into the same direction.
    You mean like our current federal political system?

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    If you're interested you should read Why Nations Fail by Daron Acemoglu and James Robinson. They even have a blog going on on the site. But in essence it all bottoms down to institutions, economical and political. Of course the political institutions were pretty bad all across Europe at the time of the Spanish Empire, but the UK had for example way better economical institutions with the Magna Charta etc.
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