17th Century Spain: Socio-Economic Crisis & Golden Age
Economic and Social Developments in the Seventeenth Century
The seventeenth century is characterized by a socio-economic crisis caused by the following reasons:
- Reduction of the population (from 8 million to 7 million). The reasons were epidemics (plague), constant wars (Flanders, Portugal, etc.), emigration to the Indies, the decline in the birth rate by reducing the number of marriages, and the expulsion of the Moriscos.
- Monetary Policy. This consisted of altering the currency to deal with the financial problems of the Crown. This policy applied to the currency of fleece (copper and silver coin), issuing only copper fleece currency, reducing the weight of the coin, releasing large amounts of currency, etc. This hurt the lower classes because prices rose for products denominated in fleece.
- Social mentality of the time. The social ideal was to live off income, that is, to live without working. Therefore, people sought jobs in government or securities to provide income, and production activities were neglected.
The crisis is characterized by:
- Decrease in the living standards of farmers. The reasons were the decline in agricultural prices, poor harvests, and increasing taxes. Many lost their land, causing a concentration of ownership in the hands of the nobility.
- Cessation of craft activities and the weakening of trade. This was due to the arrival of foreign manufactured goods cheaper than domestic ones, which caused the ruin of peninsular cottage industries, the decline of trade with America because of the lack of merchant ships, as available ships were used as warships, and the idea that manual labor was a disgrace, typical of the noble idea that was taken over by the bourgeoisie.
- Ruin of state finances. Measures to find extra resources (juros, sale of offices, etc.) were not sufficient to cover the costs of the Crown. Revenues were used to finance the costly foreign policy. Revenues came from income from Castile, precious metals, and the tax system. These sources were very weak in the seventeenth century.
Cultural Splendor: The Golden Age
The seventeenth century is a very bright stage from the cultural point of view. Thus, it is called the “Golden Age.” Literary production highlights the theater (the so-called national comedy arises) with authors such as Lope de Vega, Calderón de la Barca, Tirso de Molina; poetry with Góngora (culteranismo) and Quevedo (conceptismo); and the picaresque novel with authors like Mateo Alemán or Quevedo.
On the other hand, a diverse group of thinkers who we call arbitristas (Moncada, Ortiz, etc.) analyzed the situation and offered solutions to the crisis of the moment. In general, they indicated that economic activity could not rely on the export of raw materials because, of course, they were imported as finished products. The difference in price (more expensive processed products) benefited foreign producers.
The War of Succession and the System of Utrecht
Carlos II, the last Spanish Habsburg, died childless (1700). His last will in favor of Philip of Anjou (later Philip V), grandson of French King Louis XIV, threatened the European balance of power established in the Peace of Westphalia because they feared a possible alliance between France and Spain, allowing France to become the great European power. Europe split into two camps: the Alliance of The Hague (Austria, England, Holland, etc.) maintaining the balance in favor of Europe and the aspirations to the Spanish throne of Archduke Charles of Austria. On the other hand, France and Spain. Felipe V was accepted as the successor of Charles II in Castile in 1701. However, Catalonia and Valencia supported the Archduke Charles. In 1713, the war ended with the signing of the Peace of Utrecht. The most important points are:
- Recognition of Philip V as king of Spain and the Indies and waiver of rights to the throne of France.
- Loss of the Spanish possessions in the Netherlands and Italy to Austria.
England retained Minorca and Gibraltar, which it had obtained in the course of the war.