13-4-21

CRISIS IN EUROPE IN THE 17TH CENTURY

One of the features of the crisis of the 17th century was the decline of the Mediterranean economy
specifically the decline of Spain and Italy.

No unanimous opinion amongst historians about when the decline started, which areas it encompassed
and why the decline took place.

According J H Elliot, the Spanish decline cannot be understood as an isolated event. Much of the 17th
century in Europe witnessed a decline in terms of population and economy. For Elliot the decline was
not dramatic as it had the largest military in Europe. Its rival was England ruled by Queen Elizabeth.

A/O to some historians like Carlo M. Cippola and Henry Kamen do not accept this argument about the
Spanish decline. A/o to Cippola and Kamen, Spain was not developed enough to decline. Spain’s
development, according to them, was hindered over the centuries due to its fundamental economic
weaknesses. At the same time, they argue, that it would be a mistake to presume that all regions of
Spain faced the same situation.

One view- the period of Spanish expansion lasted till about the 1550s and then the decline began and it
culminated in the 1640s.

Another view- the beginning of the decline was from the 1620s but not before 1598.

The second controversy rests on the argument that whether it was Spain that declined or Castile. Many
historians believe that the decline encompassed only a few regions in Spain. J I Israel argues that in the
state of Valencia there was a period of growth and expansion in the 16th century which was followed by
a period of decline and stagnation in the 17th century. This was also the case in Castile.

Henry Kamen emphasizes that the state of Catalonia showed certain signs of development during this
period hence, showing that the decline was only of certain regions and not of Spain.

MONETARY AND FISCAL ISSUES

A/o Earl J Hamilton suggests that the silver imports played a major role in the rise of Spain and when the
imports declined, the Spanish economy also declined. Spain could not have maintained its expansive
empire without the supply of American silver. A/o Hamilton the illusion of prosperity, created by the
American bullion in the age of mercantilism, was responsible for Spain’s aggressive policy and their love
for luxury goods. The Spaniards lived a very luxurious and extravagant life. They liked manual crafts.

Since the source of income was not permanent, its decline caused Spain’s decline. This argument of
Hamilton is supported by Dennis O Flynn. Flynn argues that mining profits instead of the import of
bullion supported the Spanish Empire.

The increased production of American silver and its arrival in Spain brought down its value. The cost of
production increased which led to a recession in the mining industry and the colonial possessions came
to be described as ‘parasitical’. And a/o the viewpoint of these historians, the decline of Spain was
because it had become too dependent on the imports from America, and once the supply was reduced,
the state declined.

Spain’s involvement in numerous wars such as the Habsburg-Valois Wars, Spanish Inquisition, war
against England, Dutch Revolt and the Crusades depleted the resources and treasury of the Spanish
empire. In the 17th century, therefore, the supply of bullion declined but the expenditure of the Spanish
Crown continued and, in some cases, increased. Hence it contributed significantly in the Spanish decline.
Made the crown bankrupt and forced them to borrow from others. The treasures of Spain were
exchanged for money. The Fughers and other banking families received mortgage from the Spanish
crown. Soldiers did not receive salaries which led to mutiny such as in Antwerp.

Taxation increased in order to pay back the loans taken by the Crown. New taxes were imposed on the
Spanish population. The burden of theses taxations was borne by the peasants and the bourgeoise while
the nobility was exempted. These taxes had negative impacts on the manufacturing section of the
Spanish economy.

SM Ma’am notes: 21.04.21

From the last decades of the 16th century, Castille became highly dependent on foreign supplies for
food grains as the Spaniards paid more attention to sheep farming than on growing crops. The peasants
in Spain were not converted into serfs and they had not much freedom and hence, their economic
status did not increase.

In other Spanish towns like Valencia, agriculture was labor intensive and oriented towards the market.
This kind of agriculture was depended on the Morisco population. But the Moriscos were expelled and
therefore, the economy of Valencia was badly affected. The Duke of Olivaris (ruler of the state of
Valencia) imposed heavy taxes and entered into wars between Italy and Flanders. These wars did not
have a desirable impact.
Spain was a ‘colonial super power’ and usually the colonies are of advantage to the super power. But in
the case of Spain, during the 17th century the colonies proved to be a burden for Spain. Spain could not
afford these colonies. Because there was a shortage of industries, the Spaniards were dependent on
produce from the Netherlands. The industrial decline along with the agricultural decline contributed to
the overall decline of the Spanish economy.

Ship buildings was also not being able to flourish as the Americans put a lot of pressure and demand on
the Spaniards for the supply of ships. The Spaniards could not fulfil these demands. The destruction of
Spanish armada in 1588 by the English in the war led to the emergence of Holland and England as
carriers of naval arms and they became the new ‘naval super powers. The iron industries of Spain faced
strict competition from Sweden.

The actual political decline began with the decline of Netherlands (Holland). Netherland is divided into
Southern part (ruled by Spain) and the Northern part. The southern part was extremely important as it
included the rich places of Flanders and Holland. The port of Antwerp had become a leading economic
region and it reaped a lot of benefits from the American colonies of Spain. The demographic growth was
equally impressive. The representative assembles of all the 17 provinces in Netherlands accepted an
administrative authority in Brabourne. The political structure was a federation with multiple power
centres. The growing burden of taxes imposed by the Spanish people, the series of harvest failures in
Spain and also the Baltic trade disruption led to a conflict between Spain and the people of Netherlands.
The local people of Netherlands were not allowed to hold offices. The harsh religious policy by Philip II
against the Calvinists and Anabaptists was unacceptable to the citizens of Netherlands. The urban elites
and the nobles were alarmed because 14 new bishop priests were created and they were giving the
rights. The municipal councils refused to implement the decisions of the Spaniards. Hence, by 1564-65
there was a harsh resistance (political agitation) from the Netherlands towards Spain. These religious
protests were accompanied by food riots and the armed rebels captured towns of South Netherland.
Margaret of Parma (Philip II half-sister) was also very ruthless in suppressing the rebellions in
Netherlands.

In 1567, the Duke of Alba was sent by Philip II with 10,000 troops in order to crash the Dutch revolts. He
undertook tyrannical acts and all of this only aggravated the situation. A large number of rebels were
executed and killed. William of Orange or William of Nassau led the Dutch revolt. The Calvinists
(captured Northern Netherland towns or the Anabaptists were sent into exile. The people of
Netherlands who were suffering under the hands of the Spanish rulers warmly welcomed William of
Orange who led the revolt. All these continuous revolts, led to the decline of the Spanish resources.
They plundered Antwerp and sacked it, even 8000 town members were killed and this incident was
known as the Spanish Fury.

A peace treaty was signed between the Dutch (William of Orange) and the Spaniards and this is known
as the ‘Pacification of Ghent’. This was signed in 1526. Once the bullion started arriving from America to
the Spanish and their economy increased, they again recovered the whole of Southern Netherland.
However, the 7 colonies of Northern Netherlands declared themselves independent. Amsterdam
became the most important economic center and it became the capital of Holland.