Spanish Agriculture, Etc.

Yoshie Furuhashi furuhashi.1 at
Sun Oct 29 18:50:32 MST 2000

*****   ...From the Spanish Empire in the New World came an influx of
precious metals, which had profound economic effects. The flow became
especially important in the second half of the sixteenth century, and
consisted of both gold and silver, with the latter metal
predominating.  The Spanish went to great lengths to secure the
entire supply for themselves and prevent any of their precious
cargoes from falling into the hands of their rivals.  Each year the
plate fleet, bearing the bullion from the mines of Peru and Mexico,
was accompanied to Spain by a convoy of warships, and during the
sixteenth century no other nation ever succeeded in intercepting this
fleet.  Francis Drake was able, however, to rob Spanish treasure in
Central America and in the Pacific.

In the middle of the sixteenth century great deposits of silver were
discovered in Mexico and Peru; in the latter region were the great
mines of Potosi, in the area of modern Bolivia.  A new method of
extracting the silver from the ore was developed, and the amount of
silver reaching Spain became very great.  It was this bullion, which
to a very great extent, made possible the foreign and imperial
policies of the last years of Charles V and the reign of Philip II.

Because of these ambitious and costly policies, it proved impossible
to keep the gold and silver in Spain.  Much of it was spent to
support activities that were not directly related to Spanish affairs,
since both Charles and Philip had extensive interests outside the
country.  It was also necessary to export the precious metals to pay
for manufactured goods, because of the neglect of Spanish industry.
Spain also was compelled to import agricultural products throughout
the century. Various causes combined to harm Spanish agriculture. The
mistreatment of the Moriscos (see Chapter 18), who had been the chief
agricultural workers in the country, was a serious blow.  Another
harmful influence was the favor shown to the mesta, the association
of sheep-growers of Castile.  Since the mesta was a prolific source
of tax revenues, the Spanish monarchs adopted the shortsighted policy
of favoring the sheep-growers at the expense of the farmers.  Add to
this the fact that only about 45 percent of the soil of Spain is even
modestly fertile, while only 10 percent can be described as rich, and
it becomes clear why Spain was importing wheat from early in the
sixteenth century.

The massive flow of specie accompanied what has come to be called the
Price Revolutiona rise in prices that took place all over Europe,
even though it was higher in some countries than in others.  This
inflationary trend was especially marked in Spain and undoubtedly was
connected with the influx of gold and silver.  The connection between
the quantity of gold and silver in circulation and the rise of prices
was not immediately seen, but during the second half of the century
certain thinkers became aware of the connection.  The earliest was a
group of men connected with the Spanish University of Salamanca;
better known is the versatile Frenchman Jean Bodin, whose work was
much more widely known and who made popular the idea that the price
inflation was the direct result of the increase in the money supply.

The same idea has been put forward, in a much more elaborate and
technical form, in the twentieth century, but it has been challenged
in recent years and can no longer be accepted without serious
modifications.  The influx of gold and silver may now be looked on as
one factor in the Price Revolution, but far from the only one. Of the
others, perhaps the most important was the growth in population.

The example of Spain shows that a simple increase in the amount of
money was not necessarily beneficial.  However, in countries where
agriculture and industry were in a more flourishing state, and in
which the demands of war and foreign policy were not so
all-consuming, the increase in the money supply acted as a stimulus
to economic activity.  Even in such cases, however, its effects were
unevenly distributed among the various social classes.  Wages rose
more slowly than prices, and wage earners did not share in the
benefits of economic expansion as did their employers, especially the
great capitalists....

...By the sixteenth century, it may be said that a European economy
had emerged in which the various parts of Europe were bound together
by an intricate network of economic and financial relationships.
During the first half of the century and part of the second, the city
of Antwerp was the financial and commercial center for the European
economy, showing once again how the economic center of gravity had
shifted from the Mediterranean to the Atlantic.  When the preeminence
of Antwerp became a casualty of the war for Dutch independence, its
place was taken for a while by Amsterdam and later by London.

The sixteenth century saw not only the rise of new economic powers
but also the decline of old ones.  In addition to the gradually
decreasing importance of the Italian city-states, the period also
witnessed a falling off of the power and position of the Hanseatic
League, or Hansa towns.  This was an organization of cities in
northern Europe, formed for the purpose of carrying on trade; it had
been one of the great powers in the fourteenth and fifteenth
centuries.  It secured special trading privileges with numerous
countries, fought wars to maintain its privileges, and had
settlements of merchants from London to Novgorod.  The chief city of
the League was Lá-ábeck, but many other great cities belonged to it.
It could flourish only in a period when central governments in some
areas were weak enough to permit the existence of virtually
self-governing city-states.  With the rise and consolidation of the
nations of Europe, its decline was inevitable.  By the sixteenth
century its greatest days were over, though many causes contributed
to its decline and the decline did not come suddenly.  Something of
the atmosphere of the Hanseatic towns as it came down to our own
century is preserved for us in the writings of a descendant of the
prosperous merchant class of a Hanseatic city, Thomas Mann....

[The full article is available at


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