The decline of Spain was the gradual process of financial and military exhaustion and attrition suffered by metropolitan Spain throughout the 17th century, in particular when viewed in comparison with the ascendant rival powers of France and England. The decline occurred during the reigns of the last kings of Habsburg Spain: Philip III, Philip IV and Charles II. Concurrent with the military and economic issues there was a depopulation in metropolitan Spain. The Spanish decline was a historical process simultaneous to the purported general crisis of the 17th century that swept most of Eurasia, but which was especially serious for Spain.
It was so debilitating that Spain went from being the hegemonic power in Europe, with the largest economy on the continent in the mid-1500s, to becoming a financially exhausted, second-rate power by the end of the 1600s. Contrary to metropolitan Spain there was not an equivalent decline in Spanish America where Spain successfully defended and consolidated its dominions, and both the cities and the general population grew.
Overview The decline of Spain was reflected in a multitude of areas, including demography, which was mirrored in the resurgence of the plague and other epidemics, and the gradual depopulation of cities in metropolitan Spain. In the economy, it was reflected in chronic fiscal problems, monetary alterations, inflation, hyperinflation, the decline of industry, and a steep drop-off in precious metal remittances from the Americas. There were serious socioeconomic issues, such as chronic religious and inquisitorial tension, the expulsion of the Moors, refeudalization, the rampant ennoblement of certain idle sectors of the population, the purchase of positions, and the increased power of Catholic religious orders.
The decline was also reflected politically and territorially, with the initiation of the twelve years' truce and the maneuvers of the Duke of Lerma, the court favourite, spectacularly manifested in the so-called crisis of 1640, after attempts to restore the reputation of the monarchy with the aggressive policy of the Count-Duke of Olivares. As evidenced with the Peace of Westphalia (1648) and the Treaty of the Pyrenees (1659), the pathetic situation of the final half of the 17th century was a nadir for the vast Spanish Empire.
Though the high court officials surrounding Charles II had carried through a few economic reforms, all the European chancelleries watched carefully the highly uncertain future of the bewitched king and his shaky hold on the Spanish throne, and the fate of his inheritance that girdled the globe if he were to remain heirless. After a series of complex palace intrigues, Cardinal Luis Fernández Portocarrero supported passing on this vast global inheritance through Maria Theresa of Spain, Charles II's sister, to Louis XIV of France, Charles II's brother-in-law, who wanted the Spanish crown for his grandson Philip of Anjou.
It was resolved after the death of Charles II of Spain with the Europe-wide War of the Spanish Succession (1701-1714), ending in the Treaty of Utrecht (1713), which divided this vast inheritance between the Habsburgs and the Bourbons, with substantial benefits for England. And that gave way to the Austracist exile and a violent Bourbon repression.
By contrast, the Spanish Decline coincided with the most brilliant manifestations of art and culture, in what has been called the Spanish Golden Age (in Spanish: Siglo de Oro Español). In many of these artistic and cultural triumphs there is a true awareness of decline, which in some cases has been described as negative introspection (Quevedo, the arbitristas). Specifically, the Spanish Baroque (the culteranismo or the churrigueresque) has been interpreted as an art of appearance, scenographic, which hides under an external tinsel a weakness of structure or a poverty of content.The aesthetic attack against the Spanish Baroque began with the Spanish Enlightenment, from the institutions (Real Academia de Bellas Artes de San Fernando), and was expressed forcefully in the Viage de España by Antonio Ponz or in literary criticism. The revaluation of the Spanish Baroque began in the 19th century, and did not become evident until the 20th century (homage to Góngora that formed the Generation of '27 as a group).
The historiographic interpretation of the causes of the decline has been a much-discussed issue. On many occasions it has been attributed to the clichés characterizing a Spanish national stereotype linked to the black legend present in the anti-Spanish propaganda circulating throughout Europe since the early 1500s. Among these harmful stereotypes included pride in the old Christian caste; an obsession with an indolent nobility highly hostile to entrepreneurialism and industry and prone to violence in the defense of an archaic concept of honor; the uncritical submission, by superstition or fear rather than faith, to despotic power both political and religious; fanatical adherence to the most intolerant, cramped version of Catholicism, which led to quixotic adventures in Europe against the Protestants; and the cruel rule of the conquistadors forced upon the American Indians, which included mass forced conversions.Such is the interpretation that underpinned the famous What is owed to Spain? of the Encyclopédie Méthodique (Nicolas Masson de Morvilliers), which is at the origin of the dominant version among the Enlightenment (Juan Pablo Forner, Pan y Toros) and the Spanish liberals (José de Echegaray's speech of accession to the Royal Academy of Sciences):See also: The two Spains
An alternative pink legend attributes the achievements of the Spanish Empire to an unflagging fidelity to Catholicism, an interpretation of history popular with the reactionary side of Spanish nationalism.Marcelino Menéndez y Pelayo (Spanish science controversy, History of Spanish heterodoxes), Ramiro de Maeztu (Don Quijote, don Juan y La Celestina, 1929; Defensa de la Hispanidad, 1934). At its most extravagant and conspiratorial, this reactionary nationalism attributes Spanish decline to an alleged international conspiracy. In spite of the implausibility of such a conspiracy theory, it gives a decisive role to the Jews and to the secret societies that are imagined to be ancestors of Freemasonry, in addition to linking these crypto-powers to foreign Protestants and Muslims.William Thomas Walsh Felipe II. (1937-1943) Madrid: Espasa Calpe.
From objective points of view backed up by ample contemporaneous documentary evidence, current historiography considers the central role of the authoritarian monarchy of the Habsburgs in undermining long-term Spanish economic power, especially an unhealthy and destabilizing overreliance on imports of New World silver. Such overreliance led to constant budgetary crises for the Spanish government, sovereign bankruptcies and ruinous hyperinflations from the mid-1500s to around 1720. Such long-term economic instability, in turn, constantly sapped Spain's ability to build up large armed forces, and thus to project consistent diplomatic and military power throughout Europe.José Antonio Maravall, Antonio Domínguez Ortiz, Gonzalo Anes, Miguel Artola, Manuel Fernández Álvarez, Bartolomé Clavero, Bartolomé Benassar, Pierre Vilar, Joseph Pérez, John Elliott, Henry Kamen and many others have analyzed it from very different positions.
This undermining of economic power stands in stark contrast to the more cogent and rational economic policies of the absolute monarchy that the Bourbons were developing at the same time in France. The Bourbon absolute monarchy relied less on unpredictable imports of silver and more on intensive taxation of the vast and productive French agricultural sector, by far the largest in Europe at the time. These predictable and ample tax revenues led to an enviable stability for the French government's budget and expenditures, which translated to a bigger army and navy and thus a greater projection of diplomatic and military power throughout the 1600s, eventually eclipsing that of Spain herself.José Antonio Maravall, Antonio Domínguez Ortiz, Gonzalo Anes, Miguel Artola, Manuel Fernández Álvarez, Bartolomé Clavero, Bartolomé Benassar, Pierre Vilar, Joseph Pérez, John Elliott, Henry Kamen and many others have analyzed it from very different positions. Nevertheless, the clear and definite divergences of the socio-economic models associated with Catholicism and Protestantism in different parts of Europe from the early 1500s to the late 1700s, as analyzed in the sociology of Max Weber (The Protestant Ethic and the Spirit of Capitalism, 1905), continue to be considered.
Economic causes
Spanish decline can trace its direct causes to the long-term inflation and hyperinflation caused by the New World silver pouring into the Spanish economy after 1530 or so. This one economic problem caused a cascade of events in Spain's economy that ultimately destroyed its prosperity and led to Spain's long-term decline.
These huge quantities of silver first encouraged the Spanish monarchy, starting with Charles V, Holy Roman Emperor (Charles I of Spain) and continuing with the minor Habsburgs, to take out huge debts. These monarchs did so always with the belief that the Spanish crown would be able to pay back the debts in a timely manner through silver shipments. However, silver shipments were quite irregular.
Transporting the bullion from silver mines in central New Spain and Upper Peru required an arduous journey from the inland mountains to the coast. Piracy was rife in the Caribbean and along the Western European littoral. Lots of ships laden with silver were lost to pirates. Then there were the hurricanes—the Caribbean and the Atlantic between Spain and the Americas is frequently buffeted by hurricanes. Lots of silver ships were also lost that way.
When the Spanish monarchy depended on certain deliveries of silver to arrive in Seville, and these were lost or very late, it then defaulted on those debts to its creditors, usually large German and Italian banking houses. This kept happening so often that by the latter half of the 1600s, during the reign of Charles II, no banker anywhere in Europe wanted to lend to the Spanish Habsburg kings anymore. This severely hobbled the Spanish economy as sovereign debt could not be extended to fund large and expensive projects required by the nation, such as the maintenance of a permanent standing army or a large navy.
Second, there was inflation and hyperinflation on their own. Vast surges of silver that would hit the Spanish economy regularly would lead to sudden tremendous spikes in prices for all sorts of goods, especially food. Destabilizing hyperinflation happened so frequently, in fact, that a lot of Spanish people started to move out of Spanish towns and cities into the countryside, becoming tenants of aristocratic landlords. Rents were high due to the inflations, but could be paid in-kind with a percentage of the yearly crops.
These people could then farm the land to grow their own food, and to create their own clothes and implements. That way they divorced themselves completely from a silver cash economy that was so unstable and unpredictable. Of course, this meant that Spain de-urbanized throughout the period of the silver surges, as towns that used to be quite large started to depopulate.
Spain never managed to achieve a city of over 100,000 until 1750 or so (in this case Madrid), when before 1492 it had had at least 4 cities of that size: Seville, Granada, Toledo and Cordoba. Without growing towns and cities there was no robust middle class; without a robust middle class there was no backbone for a strong consumer economy, as had happened in Italy, the Netherlands, France and England throughout the 1500s and 1600s.