Spain in the 16th Century: Economy and Society
16th Century Spain: Economy and Society
Economic developments in sixteenth-century Spain were marked by growth and a price revolution. Both Castile and Aragon experienced a major boom in all economic sectors, especially those related to urban and commodity production, international trade, and port activities. Population growth and the demand from America for all types of products increased demand.
The Price Revolution
Another important factor was the price revolution. Since the beginning of the century, Europe witnessed a continuous and sustained rise in prices. Wages did not rise at the same rate, so employers reaped significant benefits that encouraged investment and, thereby, the growth of the economy. This phenomenon was mainly due to the arrival of precious metals from America, affecting inflation in cities south of the peninsula where fleets arrived laden with gold and silver. Although no gold or silver left the peninsular kingdoms early on, it formed a circuit made out of silver from Castile to Europe.
Economic Crisis
The first symptoms of the crisis emerged in mid-century. Cheaper foreign products saturated markets, while rising wages due to labor shortages reduced corporate profits. However, the main cause of the crisis was the enormous cost of European wars for Castile, which had a growing tax burden. Monarchs turned to loans from bankers, first German and later Genoese. Given the difficulties in repayment, the bankers were guaranteed seats or guarantees from the collection of certain taxes, mortgaging the sources of Spanish wealth before they were collected.
During the reign of Philip II, the situation did not improve. He declared bankruptcy three times. Wars hindered businesses, and manufacturers and traders avoided taxes by exiting the business and investing in annuities, debt securities with which the Crown obtained resources to finance foreign policy.
The wealth of Castile, and less so from the other kingdoms, was diluted, in part because only peasants and urban artisans contributed their taxes to the European policy of the Habsburgs, evidently ruinous to the peninsular kingdoms.
Spanish Society in the 16th Century
Sixteenth-century Spanish society was characterized by widespread population growth, moderated in the last decades of the century. The demographic structure remained with wide variations. Castile remained a country of peasants with small-sized cities. There was a change in the distribution of cities, gaining importance in the south, connected with American trade, while the North began to decline due to the collapse of trade with Flanders. There were fewer changes in Aragon, where the four capitals accumulated a significant percentage of the total population of the kingdoms. Of note is the significant migration to the American colonies; it is estimated that some 150,000 Spaniards emigrated, mostly young men, affecting both the structure of the Spanish population.
Social Structure
The social structure of the peninsular population maintained the traditional class division. The privileged classes, nobility and clergy, maintained and even increased the differences among its members. The nobility gradually lost political power but maintained its socioeconomic power. There were large differences between the high nobility, formed by large and powerful nobles of Spain, the nobility of knights, intermediate members of the urban oligarchy, and the lower nobility, consisting of noblemen. The Habsburgs promoted the sale of peerages and titles issued for services to the crown, nobility of the call. Both gateways were privileged establishment officials, townspeople, and soldiers.
The clergy was a rather large estate and quite heterogeneous, with significant differences among the higher clergy, comparable to the nobility, and the lower clergy, with conditions very close to common people.
The non-privileged establishment brought together the vast majority of society. The differences were marked by economic level, from farmers to landlords and bourgeoisie smallholder farmers, laborers, and urban working classes are in this group. Noteworthy marginalized social groups, which increased considerably in the cities in the next century because of economic impoverishment, are the protagonists of the picaresque novel.
The social organization maintained the patriarchal model, imposed certain ideals such as honor and purity of blood, associated with values of nobility along with the courage, honesty, merit, which conditioned social relations.