Spain, the Americas, & the General Crisis of the 17th Century(was Re: The question of Spain)

Yoshie Furuhashi furuhashi.1 at
Tue Oct 24 21:25:15 MDT 2000

>From my understanding of 17th century Spain was that it was quite
>well equipped to take over most of the New World, looting it and
>enslaving (or enserfing) many people. But the empire wasn't set up
>to turn that loot into capitalist development, so that they ended up
>importing crucial commodities from Holland and England, which helped
>those countries move toward full-scale (industrial) capitalism. I'm
>not sure that makes the Spanish empire worse or better than
>industrial capitalism.
>Jim Devine jdevine at &

*****   But what of the Americas?  After all, the pioneering study of
Woodrow W. Borah, _New Spain's Century of Depression_, published in
1951, gave early expression to the idea of a seventeenth-century
General Crisis in the entire Western hemisphere, and in 1960 the
massive study of Pierre and Huguette Chaunu, based on the records of
the customs authorities at Seville, pointed to a major depression in
the trade between Spain and her American colonies between 1623 and
1650.  In 1974 Jonathan Israel presented evidence of an overall
economic downturn in the viceroyalty of Mexico after 1620, and
especially after the disastrous floods of 1629-34, when mining,
textile manufacture, and trade with Europe, Peru and the Philippines
all declined, just as fiscal pressure mounted.  Political
disturbances occurred in Mexico City in 1624, 1647 and 1664, each one
seriously compromising the government's authority (especially in 1647
when the viceroy was forced to flee).  Serious unrest also occurred
in Peru between 1661 and 1667, centred on the silver-mining community
of Laicacota in the southeast, but also involving a conspiracy in
Lima which, according to a contemporary, 'brought the kingdom within
an ace of a great disaster'.  Peace soon returned, however, not least
because the local elite proved increasingly adept at thwarting all
government attempts to raise new taxes and export the proceeds to
Spain.  Thus, although the central treasury in Lima sent over 100
million pesos to Castile between 1591 and 1690, 71 per cent left
during the first four decades.  Furthermore, although the total
revenues remained fairly stable between 1591 and 1650, the amount
remitted to Seville declined from 64 to 42 per cent, while from 1651
to 1690 the total revenues declined and the amount sent to Spain fell
dramatically to 5 per cent.

How did these phenomena relate to developments in Europe?  In 1969,
Andre Gunder Frank, a powerful advocate of dependency theory, argued
that contraction in Europe promoted economic self-sufficiency and
diversification in the Americas; but in 1980, Immanuel Wallerstein
argued that the economic downturn in the Old World during the
seventeenth century led to stagnation in 'peripheral' zones like
Spanish America.  Both these general studies remained uncluttered by
primary research, however, and subsequent investigation suggests that
the transatlantic trade declined mainly because Spain no longer
produced the goods that the colonies needed, while Spain's remaining
exports proved superfluous to colonial requirements, leading to the
retention of more silver in the Americas.  This major economic shift
coincided with an expansion in the population of European descent and
the increased participation by the surviving Amerindian population in
regional markets.  These four factors gradually produced a shift from
primitive export-oriented production to a more diversified economic
base.  Both Mexico City and Lima founded their own Merchant Guild and
established their own banks; agriculture became more efficient; local
manufactures and intercolonial trade all burgeoned.  Data from
French, English, Dutch and Portuguese possessions in the Americas
concur: despite some minor reverses, the seventeenth century
witnessed relatively smooth economic and demographic growth in all
the European colonies along the Atlantic seaboard.  The General
Crisis in the New World proved relatively brief.   (endnotes omitted,
Geoffrey Parker & Lesley M. Smith, "Introduction," _The General
Crisis of the Seventeenth Century_, 2nd ed., eds. Parker & Smith,
London: Routledge, 1997, pp. 19-20)   *****

*****   Economic imbalances and a relative inflexibility, an
inadequacy of response, made the economy of the _ancient regime_
especially fragile.  One line of business or one special product
could expand economic activity in a district or country so as to make
it top-heavy and susceptible therefore to unexpected collapse.
Foreign competition, trade or transport disturbances or internal
difficulties might suddenly wither this branch of
industry....Catalonia's one-sided trade-mindedness brought terrible
repercussions with the decline of Mediterranean trade at the end of
the fourteenth century.  Not even by the sixteenth century had the
country recovered from the blow....Castile at the end of the
sixteenth century lost the advantageous market for agricultural
products in America, which was a blow struck at the heart of the
Spanish empire, already staggering under other difficulties.
(endnotes omitted, Ivo Schoffer, "Did Holland's Golden Age Coincide
with a Period of Crisis?" _The General Crisis of the Seventeenth
Century_, 2nd ed., eds. Parker & Smith, London: Routledge, 1997, p.
95)   *****

*****   ...[T]he net result of [the seigneurial reaction] was the
same in most places at this time: agricultural production declined,
or at best stagnated.  The growing 'feudalization', evident in the
collection of revenues, was sterile in itself and sterilizing in its
consequences.  It produced a structural economic stagnation....

First of all, it may be asked how it is that trade or industry
develops in an economic sphere, where the majority of inhabitants do
not participate in the life of the commercial market?  The two
shillings that a peasant may spend at the market during a prosperous
period go to maintain, directly or indirectly, much of the
international trade.  When he does not spend the two shillings, who
will buy the spices and cloth imported?  The lord?  The latter is, in
spite of his wishes, not able to proceed beyond a limited consumption
of spices and cloth.  _Luxus und Kapitalismus_, the fine formula of
Werner Sombart, is valid mainly for the Middle Ages, but should be
revised seriously if the economic historians of the modern world
would have a similar vision: it is useless to look for commercial or
industrial development when agriculture is faring badly.  In these
centuries before the nineteenth, trade and industry prospered during
the times when agriculture retained its vitality.  This was not
solely because the peasants were the direct consumers, but because
they promoted (indiretly) a class of consumers in the cities which
outnumbered the lord and his entourage....

To return to our theme, after the end of the sixteenth century
European agriculture showed definite signs of exhaustion.
Refeudalization began to make its effects felt, and the agrarian
structure of almost all Europe was weighed down by the strain.  This
is shown not only in the qualitative data of production, but also in
other sectors beyond the purely economic.  The phenomenon was
general.  Trade and industry managed to circumvent this weakening of
the agrarian structure, overcoming the pre-crisis of 1609-13 and
forging ahead again.  They had, however, recourse to a particular
'stimulant': credit....In spite of every 'stimulant', trade and
industry did not manage to pass through the major crisis of 1619-22.
Originally a normal, cyclical crisis, it was transformed into a
structural crisis because the support of agriculture was no longer
there.  If, at the back of Seville, or Danzig or Florence or Lubeck,
there had been a healthy agrarian economy, this crisis of 1619-22
would have remained a (more or less) minor event....

By examining the great trades and industrial production as a whole,
we have seen that the depression in these economic sectors was not so
drastic in Holland and England as in other regions of Europe.
Perhaps, instead of a depression, it should be described as a
stagnation, or merely as a decrease in vitality....

...Holland and England are, however, exceptional regarding the
absence of a massive and unequivocal 'turning-point' that seemed to
affect all other places.  They are exceptions that, so to speak,
prove the rule.  It seems that Holland and England were the only two
countries that escaped the phenomenon of
refeudalization....Certainly, not everything concerning agriculture
in Holland and England was idyllic, but the fact remains that these
two countries continued throughout the seventeenth century to invest
large amounts of money in land.  It was this that not only gave
vitality to the existing economic life, but established the
preconditions for the agricultural and industrial revolutions that

In addition to this, I should like to point out that in the sixteenth
century the old Mediterranean economies, such as that of Florence,
were expanding, as were those of England, France and Holland.  In the
seventeenth century, however, the Dutch and English economies stood
alone (and they did not abandon their old rivalry).  Thus, the
seventeenth century was for all Europe, indisputably, a time of

We may conclude that the sixteenth century tried to break out of the
web of a 'medieval economy', to enter a 'modern economy'.  The
resistance was too strong, and the old forms of production, and the
old relationships in production, prevailed.  The 'capitalist'
experiment of the sixteenth century ended in the return of the feudal
type of economy.  It was the eighteenth century that allowed the
definitive departure of a good number of European regions from these
old economic systems, thus resuming the movement that failed in the
sixteenth century.   (Ruggiero Romano, "Between the Sixteenth and
Seventeenth Centuries: The Economic Crisis of 1619-22," _The General
Crisis of the Seventeenth Century_, 2nd ed., eds. Parker & Smith,
London: Routledge, 1997, pp. 184-187)   *****


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