Asher K. Sisneros
September 20, 2024
Western Civilization Since 1493
Thomas E. Woods Jr.
Throughout the 16th century, the Spanish Empire was one of the most powerful and influential civilizations in the West, leading exploration in the New World. Their power probably culminated during the conquest of the Inca Empire. However, by the reign of King Philip III, the House of Hapsburg had mismanaged the nation for too long, making the degeneration of the imperial power eminent.
It would be an understatement to say the Hapsburgs ruled Spain passively. Both King Philip III and Philip IV were practically figureheads, freely giving away de facto control to their advisors. In the case of Philip III, he was just a weak but good-intentioned leader who delegated most of his authority to the Duke of Lerma. Philip IV deserves far less sympathy. He did not delegate authority because he was weak or ill-equipped; he delegated it because he preferred to “enjoy the company of women.” Under Philip IV, the Count of Olivares acted as de facto king.
Although Spain was an incredibly wealthy nation, most of their wealth was squandered away because of state mismanagement. For example, the monarchy repeatedly supported various monopolies in the country, preventing economic competition. As the most basic laws of economics teach, there is a direct relationship between economic prosperity and competition. Where there is immense competition between businesses, corporations are forced to provide the most value for the lowest prices to their consumers. Otherwise, they will go out of business. By propagating monopolies, Spain made competition impossible, causing businesses within their economy to charge higher prices for an inferior product.
Additionally, the Spanish mines in America created an influx of precious metals into the Spanish economy. While this resulted in a lot of temporary wealth, this wealth was artificial because there was no value being created. This was the same problem the Roman Empire suffered from. Because Rome had a conquest-based economy that was dependent on plunder, when the Roman Empire could not expand any further, the economy could not support itself. A similar situation occurred in Spain with the mines. While the mines were constantly adding an influx of wealth, this wealth was not the result of anything created in the economy; rather, it was similar to the Romans’ plunder. This huge influx of precious metals, while marvelous at first, inevitably led to inflation.
Another economic difficulty brought about during this period was the plague of 1590-1600. Unfortunately, this plague had tremendous ramifications on the economy; directly impacting the agricultural aspect of the economy and indirectly impacting the rest of the economy because of the fatalities. Approximately 6-10 million Spaniards died during this period.
The Moriscos controversy was another huge scar on the reign of Philip III that contributed to crushing the Spanish economy. Under Spanish rule, it was illegal to be a Muslim. The Moriscos were a group of converted Muslims. However, many disputed whether their conversion was genuine. Some speculated that they were Catholics externally but Muslims behind closed doors, in the privacy of their homes. The Duke of Lerma, being a staunch believer in the Catholic cause, banished the Moriscos from Valencia, giving them three days to leave. An estimated 300,000 Moriscos were forced to leave the region. Aside from the moral question of such a gruesome policy, it had horrible consequences on the Spanish economy. Most of those people were skilled laborers with intrinsic skills valued by the economy. By banishing them, the monarchy forced a huge part of their employment out of the region, causing mass unemployment and skyrocketing labor costs.
In the end, all of these issues contributed to the decline of the Spanish Empire. The weak economy and shrinking Spanish population forced the nation to put more emphasis on local priorities. It would not be surprising that during this period, Spain began to have a more conservative foreign policy and also shrank exploration of the New World.
Asher Sisneros 