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Spain and New Wealth for Europe in the 1500s

Spain's conquests in Mexico in the 1520s and in Peru in the 1530s within a few decades extended from the River Plata (Argentina) in the south to the Rio Grande (Texas) in the north.

Historian Paul Kennedy writes:

Exploiting the natural resources — and, still more, the native labor — of these territories, the conquerors sent home a steady flow of sugar, cochineal [dye], hides, and other wares.

Kennedy writes of the volume of this transatlantic trade "increasing eight between 1510 and 1550." He writes of western Europe in general benefitting and of a "political environment in which competition, risk, and entrepreneurship were prevalent." He adds:

...the great Portuguese and Spanish discoveries were, within decades, of great and ever-growing importance in enhancing the prosperity and power of the western portions of the continent... And of this gave the greatest stimulus to the European shipbuilding industry, attracting around the ports of London, Bristol, Antwerp, Amsterdam, and many others a vast array of craftsmen, suppliers, dealers, insurers.

Kennedy writes of the beginnings of a "modern world system" when one adds to the trading the "furs, hides, wood, hemp, salt and grain that Russians were selling to western Europe by the Russians and the iron guns that Russians were buying.

The sixteenth century has been called "the Golden Century of Spain." But Spain had problems that set it back. Spain did not have an influential or empowered business class that existed with the Dutch. In Spain the landed aristocracy held on to its power and influence. Many if not most Spaniards clung to the values of the aristocracy. There was the belief that business was fit only for Jews, Arabs and other foreigners. The proclivity toward frugality and investing were rare. Those with wealth were squandering on luxuries for the sake of prestige. The Spanish monarchy also had wars that absorbed wealth. And rather than balancing its financial books, Spain's government engaged in deficit spending.

Food production in Spain stagnated. The intricate irrigation systems and other features that had been created by Jews and Muslims and a part of a highly productive agriculture were lost after they had been expelled from the country. Spain's agricultural lands were now largely owned by absentee landlords — by aristocrats or the Church. Land was rented in small parcels to sharecroppers or tenants on short leases. They lacked an incentive to advance agriculture as would occur in Britain and the Netherlands.

Spain was becoming more dependent on importing wheat and other grains. Spaniards were consuming the coffee and tobacco taken from the Americas, while the Dutch were selling these products to others.

Trade and industry in Madrid were pursued largely by Frenchmen, who claimed to be Flemish or Burgundians to avoid a special tax imposed on the French. Harvests in northern and central Spain were gathered by French workers doing the work that Spaniards wanted to avoid and taking their pay back with them to France. Spaniards, including discharged soldiers, swarmed into the cities where they remained unemployed.

Some people were making things, but with inflation their products were not competing well with foreign-made goods. The nobility (a tenth of Spain's population) had a little influence and found positions in government, and it would be said that there were thirty parasites for every man who did an honest day's work. Seeking income, some nobles maintained customs barriers, which helped drive up prices.

Despite its conquests in the 1500s, Spain's political tradition and slower economic development would contribute to its decline as a world power.

CONTINUE READING: The Italian Wars and Civil War in France

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