Rise and Fall of the Spanish Empire

[Unteroffizier Rizz]

Does anybody know anything about this?? I know that the Spaniards had one of the Strongest navies before defeated by the British. They had colonies in the Americas that they were losing and continued to lose until the 1900s. I am aware of very poor leadership by Spanish Kings and the Spanish Hapsburgs, but I still don't understand the decline of this empire..

[kesa82]

Crap, I can't remember the author or the title of the book , I lost the book. Anyway, in this anonymous book the historian basically said it was a case of imperial overstretch.
In the period of Charles V and Phillip, vast wealth was flowing in from the New world, but it all was flowing right back out to pay debts. The costs of trying to hold onto the Spanish and Austrian Netherlands, Holding the holy Roman Empire together, trying to roll back the protestant reformation, cost enormous sums-- and unfortunately were ultimately futile. You probubly know about the Spanish Armada. That expedition cost a staggering sum, and it gained ---nothing. It didn't help that the Spanish were spread really thin in their non-european possessions.
Apparently old Spain was not the richest or most cosmopolitan kingdom in Europe --- or maybe it was ( ? ) because the Spanish people had a marked inclination to STAY HOME.
They did not emigrate to America in droves like the English, Scots, Irish and Germans.
sailors, mercenaries, priests, a few business men, went out to the colonies. But real colonists, white laborers and farmers, women and children, did not go in any significant numbers.

[carricanta]

Crap, I can't remember the author or the title of the book , I lost the book. Anyway, in this anonymous book the historian basically said it was a case of imperial overstretch.
In the period of Charles V and Phillip, vast wealth was flowing in from the New world, but it all was flowing right back out to pay debts. The costs of trying to hold onto the Spanish and Austrian Netherlands, Holding the holy Roman Empire together, trying to roll back the protestant reformation, cost enormous sums-- and unfortunately were ultimately futile. You probubly know about the Spanish Armada. That expedition cost a staggering sum, and it gained ---nothing. It didn't help that the Spanish were spread really thin in their non-european possessions.
Apparently old Spain was not the richest or most cosmopolitan kingdom in Europe --- or maybe it was ( ? ) because the Spanish people had a marked inclination to STAY HOME.
They did not emigrate to America in droves like the English, Scots, Irish and Germans.
sailors, mercenaries, priests, a few business men, went out to the colonies. But real colonists, white laborers and farmers, women and children, did not go in any significant numbers.

Yes, this is the reason about the most germans, irish, scots, surnames in Hispanic America instead of spanish surnames...
The colonization in Hispanic America was different, ´cause it was a mixture of races between europeans, amerindians and black people. Think about the vast territory dominated by a medium and poor country of Europe: Central and South America (and Philipines).
In the XVII century, Spain fought against: amerindians, north africans, turks, chinese pirates, french, italians, germans, swedish, english, dutchs... they count with allies but is impossible to hold an empire with so many enemies, revolts and so enormous territories (for instance, British Empire lost the 13 colonies and nearly the territories in India)
Sorry, but white colonialists were to Hispanic America, but the quantity is small compared with the immensity of the territory.
Asimilation of the amerindian was the policy of the spanish kings (read Padre de las Casas http://en.wikipedia.org/wiki/Bartolo...9_de_las_Casas), but it was the consequence of philosophical discussions on the humanity of the native ones.
There is more racial mixture in Spanish America that in the USA, where the policy was the extermination but no the mixture, though the Spanish conquerors committed atrocities , the certain thing is that there are more native people in any country hispanomericano - not in the Caribe - that in the USA.
Canada is a case separate, because climate and different settling, they protected the native ones

[carricanta]

because the Spanish people had a marked inclination to STAY HOME.
They did not emigrate to America in droves like the English, Scots, Irish and Germans.
sailors, mercenaries, priests, a few business men, went out to the colonies. But real colonists, white laborers and farmers, women and children, did not go in any significant numbers.

There are differents periods of colonization/settling/invasion... for instance, the italians, jews and russians were arrived to North America in the end of the XIX century and the begining of the XX. English, scots, irish protestans, dutch and germans in the begining of the settling in North America... the irish in 1848...
And in Spanish America the same thing happened, initially only soldiers and priests arrive, later merchants and managers. The settling is different in Mexico that in Argentina (they are two different periods) There are no enough demography to expel the inhabitants of the invaded lands and the territory was immense.
The people didn´t want to go to America (?) there is a phrase in Spanish who says " to do the americas " it is to say, to be going to try fortune in this continent.
The Spanish settling was different from the Anglo-Saxon one in many aspects, but I do not believe that this it was a motive for the decline.

[NJGOAT]

I have been a student of world history for a long time and the short version of the fall of the Spanish Empire is tied to two (and really one when you think about it) causes:

1. The Inquistion - While the Inquisition itself did not lead to the downfall of the empire the general condition of things that is espoused did. Spain was an empire stuck in the 17th century for almost 200 years. The country was radically Catholic and used the Inquisition to suppress any different thoughts, customs or practices that were contrary to the ultra-conservative religious views. Technology and business were stagnated and new ideas were supressed in often very hostile ways. When Europe was being radically changed by the Enlightment and industrialization, Spain remained a stalwart of backwards values and practices. The best corralary example of this would be West vs. East Germany in the 20th Century. During the Spanish American war in 1898 the U.S. fought the Spanish navy in Manila bay. The Spanish were still using wooden ships reinforced with iron and powered by boilers and sail (think of an early 19th century steam ship of U.S. Civil War vintage). Suffice to say they were no match for the U.S.'s modern battleships.

2. Economy - Spain suffered from horribly restrictive commercial practices as a result of their backward thinking. Despite their vast colonial holdings their trade practices and restrictive business laws resulted in very little actual trade when compared to the Dutch, English and even French. Combine that with rampant inflation and currecny devaluation do to the massive influxes of gold and silver from South America, the Spanish economy was a complete wreck and was unable to provide for the continued exploits of the country when the supplies of precious metals from the New World began to dwindle. The restrictive trade and industrial practices meant that while most European nations experienced the birth of a true middle class that began to carry the economy and shape their politics, the Spanish had no true middle class from which to draw wealth and act as an impetous for change and new ideas.

While those are the two main factors that most would point to, their were many ancilliary causes as well:

* Spain proper until the 20th century was still a loose collection of kingdoms that shared a common king/queen. These individual kingdoms each had their own laws and customs (further hurting industry and commerce) and in many cases the competing interests of the individual noble families overrode decisions that would have been beneficial to the nation.

* Spain was unfortunate in that while it had some spectacular monarchs it also suffered from a long line of absolutely horrendous ones. The weaker monarchs were unable to control the nobles and often simply became puppers of special interests. Even the stronger monarchs who tried to institute reforms were often only able to do so by dragging the nobles kicking and screaming toward the future, ultimately dilluting the impact of the reforms.

* Spain's empire was vast and disjointed. It was also sparsely settled. Thier general goal of colonies was to simply enslave the locals and strip the natural resources. There was little colonization by actual Spaniards and those Spaniards present tended to only be their as part of the garrison or colonial administration. They never realized the full potential of their colonies as many other nations did and were simply content to plunder the wealth, but ran into problems when that wealth began to run out.

* Thier disjointed European territories and Habsburg ties often dragged Spain into many costly wars, particularly in the 17th and 18th century. This time period saw the true dismantling of Spanish influence and exhasuted what little wealth Spain had left. By the late 18th century Spain had been eclipsed economically and militarily by almost every other power on the continent.

* The rise of the British Empire was also a direct result/cause of the decline of the Spanish one. British naval power was able to project itself globally and the British who possessed a more modern economy were able to steal large markets away from the Spanish further depriving them of wealth. It was British influence that broke the Spanish stranglehold on the Caribbean and South America and British influence that occupied the vacuum left by Spain.

I guess to sum it up the Spanish Empire died because it failed to adapt and change with the rest of the world. The fact that it lingered on into the 20th century was mainly a result of their territorial holdings not being worth much and the fact that most nations had bigger fish to fry and fruits/markets (India, China, etc.) to plunder.

[Ludicus]

I guess to sum it up the Spanish Empire died because it failed to adapt and change with the rest of the world. The fact that it lingered on into the 20th century ...

Not exactly.

The Iberian Transatlantic Commercial World in an era of Reform and War, 1750-1821

Over the course of the eighteenth century, Spanish and Portuguese colonial commerce expanded rapidly with far reaching effects on the region's economies and societies. In the second half of the century, agents of the Spanish and Portuguese Crowns introduced political and economic reforms designed to "modernize" their commercial systems. The Bourbon and Pombaline reforms attacked vested interests, dismantled long-standing institutions, and lifted barriers to trade, all with the goal of boosting Crown revenues, expanding imperial commerce, and reducing territorial and economic encroachments by foreign powers. The resulting "golden era" was abruptly interrupted by the outbreak of the Wars of the French Revolution and Napoleon and ultimately paved the way for independence of most of the Latin American colonies. This panel explores and assesses the wide ranging social, political and economic economic effects of trade expansion, commercial reform and international war on the Iberian transatlantic world of the late eighteenth century.

WEHC 2009 - Programme

[MekongFisher]

1. The Inquistion - While the Inquisition itself did not lead to the downfall of the empire the general condition of things that is espoused did. Spain was an empire stuck in the 17th century for almost 200 years. The country was radically Catholic and used the Inquisition to suppress any different thoughts, customs or practices that were contrary to the ultra-conservative religious views. Technology and business were stagnated and new ideas were supressed in often very hostile ways. When Europe was being radically changed by the Enlightment and industrialization, Spain remained a stalwart of backwards values and practices. The best corralary example of this would be West vs. East Germany in the 20th Century. During the Spanish American war in 1898 the U.S. fought the Spanish navy in Manila bay. The Spanish were still using wooden ships reinforced with iron and powered by boilers and sail (think of an early 19th century steam ship of U.S. Civil War vintage). Suffice to say they were no match for the U.S.'s modern battleships.

2. Economy - Spain suffered from horribly restrictive commercial practices as a result of their backward thinking. Despite their vast colonial holdings their trade practices and restrictive business laws resulted in very little actual trade when compared to the Dutch, English and even French. Combine that with rampant inflation and currecny devaluation do to the massive influxes of gold and silver from South America, the Spanish economy was a complete wreck and was unable to provide for the continued exploits of the country when the supplies of precious metals from the New World began to dwindle. The restrictive trade and industrial practices meant that while most European nations experienced the birth of a true middle class that began to carry the economy and shape their politics, the Spanish had no true middle class from which to draw wealth and act as an impetous for change and new ideas.

While those are the two main factors that most would point to, their were many ancilliary causes as well:

* Spain proper until the 20th century was still a loose collection of kingdoms that shared a common king/queen. These individual kingdoms each had their own laws and customs (further hurting industry and commerce) and in many cases the competing interests of the individual noble families overrode decisions that would have been beneficial to the nation.

* Spain was unfortunate in that while it had some spectacular monarchs it also suffered from a long line of absolutely horrendous ones. The weaker monarchs were unable to control the nobles and often simply became puppers of special interests. Even the stronger monarchs who tried to institute reforms were often only able to do so by dragging the nobles kicking and screaming toward the future, ultimately dilluting the impact of the reforms.

* Spain's empire was vast and disjointed. It was also sparsely settled. Thier general goal of colonies was to simply enslave the locals and strip the natural resources. There was little colonization by actual Spaniards and those Spaniards present tended to only be their as part of the garrison or colonial administration. They never realized the full potential of their colonies as many other nations did and were simply content to plunder the wealth, but ran into problems when that wealth began to run out.

* Thier disjointed European territories and Habsburg ties often dragged Spain into many costly wars, particularly in the 17th and 18th century. This time period saw the true dismantling of Spanish influence and exhasuted what little wealth Spain had left. By the late 18th century Spain had been eclipsed economically and militarily by almost every other power on the continent.

* The rise of the British Empire was also a direct result/cause of the decline of the Spanish one. British naval power was able to project itself globally and the British who possessed a more modern economy were able to steal large markets away from the Spanish further depriving them of wealth. It was British influence that broke the Spanish stranglehold on the Caribbean and South America and British influence that occupied the vacuum left by Spain.

I guess to sum it up the Spanish Empire died because it failed to adapt and change with the rest of the world. The fact that it lingered on into the 20th century was mainly a result of their territorial holdings not being worth much and the fact that most nations had bigger fish to fry and fruits/markets (India, China, etc.) to plunder.

1. See my above post regarding the Inquisition.

2. While Spanish economy was undoubtably not a sound one, the warfares of the era were in general something that was unbearably expensive and costly for the states to be engaged for prolonged time. Hack, even the Dutch Republic which was incomparably wealthier than the contemporaries went bankrupt after wars with France under Louis XIV.

3. Spanish monarchy was much less reliant than the individual monarchs compared to other 'absolute monarchies' of the era. What compensated for the poor qualities of Felipe III and IV was the political ministeries of Duke of Lerma and Olivares, and neither of two were much inferior of politicians compared to massively successful Richelieu or Oxerstina. Moreover, the political structure of Castile was reliant on the efficient bureaucracy and the well-built legalistic traditions rather than the will of the single monarch. Feudalism as a sociopolitical system never even quite developed in Castile, and the power of nobility was never independent from the power of the monarchy itself.

4. Rise of British Empire did not even take place until eighteenth century by when Spanish power was well weaker than a century ago, and the prime antagonist to its emergence was not Spain, but the Dutch Republic. Remember the fact that the Treaty of London concluding Anglo-Spanish War of 16th and 17th century was practically a Spanish victory.

Finally, the terms like "backwardness" or "progress" are hardly ever used in serious professional studies of history due to the ambiguousness and incoherency of such terms. The United Provinces and Sweden were inargurably most "modern" states of the era, but it was more "backward" Bourbon France and Imperial Russia that came out as the winners.

[Ludicus]

Excellent post.

In all sense, ultimately, Inquisition served more of a secular purpose of making the popular society conform to the lines of norm set by the state rather than genuinely and purely religious purposes.

Probably, yes. It was responsible to the Crown and was used to consolidate state interest and also used in the persecution of minority faiths in the name of orthodoxy.
The increasing economic domination of the Jews in Spain was a decisive factor, but the Jewish increasing religious influence was another factor; the Inquisition was founded (1478) to prevent converts from Judaism from lapsing back into their former religion. We shouls not forget that Torquemada firmy believed that the Jews were undermining the Catholic religion.The catholic kings when in straits for money during the war with Granada, had refused 1,200,000 ducats for the abrogation of the Inquisition, and Ferdinand had subsequently rejected an offer of 400,000.
Some twenty- century Jewish historians of Inquisition, for example Haim Beinart in "Records of the Trials of the Spanish Inquisition in Ciudad Real, 1483–1485 (1974) and Yitzhak Baer in "A History of the Jews in Christian Spain" (1961) both affirmed that the Inquisition was set up to resolve a specific socio-religious problem created by the expansion of the converso class and was not anti-semitic in nature.
The Historiography of the Inquisition - Inquisition -

"Modern evidence suggests that what really lay behind the Jewish witchhunt were deep-rooted social tensions and divisions that originated during the Christian Reconquest of Spain in the thirteenth and fourteenth centuries and that subsequently found their expression in the regime of religious and racial victimization pursued via the Holy Office"
-----------

In Portugal, for instance, João III was stirred in action by pressure from Castile - and also by alleged "incidents" of anti-Christian sacrilege. The delay (over ten years of negotiations with Rome) the king experienced in getting his Inquisition sanctionated by Rome resulted partly from lobbying by the New Christians and partly from the fact that Rome itself had serious reservations about such tribunals. Alleggedly only after João III had made a thinly veiled threath to follow Henry VIII of England and deny the authority of Rome altogether the Pope did finally give in.
In Portugal, the principal intended purpose of the Inquisition was to detect/root out "Protestant heretics"and Judaizers; but in practice the overhelming concern was with Judaizers; the Inquisition was a state alongside the state - in fact, the inquisitor- general was always nominated by the king. However, once appointed, he was irremovable by king or pope.

[carricanta]

NJGOAT, i got a different perspectives in certain aspects of your literature about the Spanish Empire:
Spain has not a strong navy not for Inquisition, Spain has not money for invest in weaponry... it´s simple. Did you study the Protestant "Inqusisition"against the catholics and different ideas about science? for instance, in Switzerland, Calvin ordered the execution of Miguel Servet, the aragonese scientific who disocovered the blood system.
The Inquisition was not a only a religious judge, it was under the goverment not the Catholic Church, for instance, the prosecution of the secretary of Felipe II, Antonio Perez:
"Philip II driven to despair by the slowness of the Aragonese justice and because he was not waiting for a favorable sentencewithdrew the charges and used a court against which the Aragonese jurisdictions and the Aragonese Justice could not be opposed: the Inquisition. Perez was not a heretic, but it was not difficult to construct a case against him"
http://en.wikipedia.org/wiki/Antonio_P%C3%A9rez
http://en.wikipedia.org/wiki/Spanish_Inquisition
Don´t think that different kingdoms/regions/nations is something bad, look to the History of Great Britain with Ireland, Scotland, Wales and England like different territories and laws, and this is not bad. I think like you in "n many cases the competing interests of the individual noble families overrode decisions that would have been beneficial to the nation." for instance, el Conde-Duque de Olivares
But i don´t agree with "It was British influence that broke the Spanish stranglehold on the Caribbean and South America and British influence that occupied the vacuum left by Spain.", because, what territory is under british culture in South America and the Caribbean?, yes, Jamaica and Belize, but the invasions were a failure like Cartagena de Indias

http://en.wikipedia.org/wiki/Battle_...gena_de_Indias , yes, Cuba was under the Union Jack, but with the American independence, the territory was returned to the spanish crown

I think that the Catholic Church was a bad influence for the developement of the ideas and the science, but, don´t forget the migration to the 13 colonies for people with different religion from the Anglican England (catholics, puritans...) ´cause the repression was a fact.

It is my opinion and i think like you in the most part of your post.

Sorry for my bad english

Cheers

[brennas]

for instance, in Switzerland, Calvin ordered the execution of Miguel Servet, the aragonese scientific who disocovered the blood system.

bleeee....that Calvin was a dick.

"Philip II driven to despair by the slowness of the Aragonese justice and because he was not waiting for a favorable sentencewithdrew the charges and used a court against which the Aragonese jurisdictions and the Aragonese Justice could not be opposed: the Inquisition. Perez was not a heretic, but it was not difficult to construct a case against him"

And our Justice of Aragón was beheaded....RIP Juan de Lanuza, a good man and a patriot.

[NJGOAT]

I always enjoy healthy discussion and enjoyed reading your post as well. There really are many and various reasons for the decline of the Spanish Empire. I gave what we in the U.S. would call the "Cliff's Notes" version of some of the reasons (basically an abridged summary of some of the points).

As for the use of the Inquisition of a main contributor, many books I have read on the period use this as an example of a system that existed and was endorsed by the government as a tool of supression and coercion. While I did state that the Inquisition itself did not cause the downfall of the Empire, it is a good example of the political and social climate that existed in Spain and the general backwardness that Spain found itself trapped in. Many other countries had similar programs and no one was innocent when it came to suppression and coercion, but no other "inquistion" was as broad reaching and ingrained into the government as was Spain's. In fact the only decent thing Calros II ever did was order a full review of the Inquisition. Of course when his successor took the throne and called for the report none could be found as it was reportedly so damning in the horrible effect the Inquisition had on the country the Grand Inquisitor had convinced Carlos II to have it burned...how apprapo.

The real heart of the reason for the Empires decline was purely economical. Spain was using the same basic economic system from the 16th century until the beginning of the 19th century. Mercantilism was suppressed, prices were controlled, imports and exports were subject to high tarriffs and localized into only certain ports, etc. It was this economic climate that resulted in the lack of any distinguishable middle class. It was the middle class that ultimately fueled the economies of the other major powers and was the catalyst for change. You can tie the Inquisition back into this do to the suppression of Jews (who often formed the basis for the middle class) and the rejection of usury, or lending money for interest. The nobles also used the Inquisition as a tool of repression and many forward thinking people were put to death for their ideas or business success that might threaten the establishment.

While many countries were formed from various kingdoms, it was generally prescribed that one of the forming nations needed to be the strongest. In the case of Spain Arragone and Castille were equally important dynasty's and though the crowns were united the two houses routinely vied for political control. Adding in the several other kingdoms that existed and allowing each of them to have their own laws, even going so far as to charge tarriffs against goods transported between them, were all contributing factors to the political and economic weakness of Spain. If you contrast this with the fomation of the United Kingdom it was a long powerful England uniting with a weaker Scottish kingdom and forcing Ireland (which was essentially a British colony anyway) to join in. The King of England had long been able to lay claim to all three crowns and the unification was more of a formality for mutual prosperity. Versus the creation of the Spanish kingdom which was essentially an anti-Moorish alliance of two kingdoms through marriage.

The point about the rise of Britain was made in that the British stepped into the vacuum left open by the decline of Spanish power. While Britain did not directly sieze the Spanish possessions, their naval power and merchants simply took the markets that used to belong solely to Spain. Had Spain handled its colonies better the situation may have been vastly different.

To discuss your final point about emigration, it is very interesting that the Enlgish would send their "undesirables" to the colonies to settle the land for them. Contrast this with the Spanish solution of torturing and killing anyone who didn't conform.

In no way should anything I'm saying be taken as pro-British, anti-Spanish as it is nothing of the sort.

[carricanta]

To discuss your final point about emigration, it is very interesting that the Enlgish would send their "undesirables" to the colonies to settle the land for them. Contrast this with the Spanish solution of torturing and killing anyone who didn't conform.

.

Not exactly, because the "undesirables" like muslims and jews, they were obliged to the conversion to the catholicism or expelled.
In the Moslem case, it was allowed a time of tolerance until repressive policies of the Crown and revolts and alliances with the Turks, implied his definitive expulsion.
Equally with the Protestants, whom they were expelled - not so much they were murdered - for example, the general boer, Of the Rey he was a South African of Spanish origins -
Repression was a weapon but expelled was a practical policy too

http://en.wikipedia.org/wiki/Koos_de_la_Rey

[Hellenikon]

NJGOAT explained it quite well, the main reasons were economical and failure to adapt to the "free trade" doctrines. In fact spain´s wealth was incredible as long as she kept the monopoly on the trade with the americas.

Another thing to keep in mind is that the spanish empire in europe brought spain much more problems than what it could handle. For most of the 17th century spain was at war with one country or the other, severly draining their economy. Specially one of the most draining places was the spanish low countries, the spanish could not subdue the dutch rebels because spain lacked the naval power to blockade them. That meant that ultimately the land operations were useless, as the british kept supporting the rebels with money and goods throught sea.

Genoa was allied of the spanish and they were used as bankers for the spanish, so the decline of the spanish economy was also the ruin of these bankers and Genoa´s influence.

In the end the spanish empire stretched too much for what it economy could handle, too many costly wars and enemies to handle (religious wars), and a old fashioned vision of wealth (mercantilist) that kept the spanish from developing a strong economy to support such a big empire.

[Ludicus]

.
For most of the 17th century spain was at war with one country or the other, severly draining their economy.

In the survival of the Spainsh Empire in the 17th century, 4 factors played a role:

1- the development of as large mestizo/mestizaje population was crucial, although during the 17th century this process was probably in its infance. These segment of population had a strong interest in seeing the the empire survive.

2-the huge amounts of exploitable wealth in the New World gave this class and the crown a strong vested interest in holding the empire: despite the best efforts of the English, Dutch and French during the 17th century, the military power of Spain both at sea and on land was more than enough to hold their vast possessions.

3-The firm implementation of the Catholic religion also assisted the survival of the empire.

4-Through cooperation and in some cases collaboration of the Indians themselves. From the outset of the empire, the Spanish had found it easy to recruit and exploit the caciques and other indigenous leaders to their advantage.

During the second half of the 18th century, a revitalized Spain rejuvenated its imperial economy (post 11)
However, politically, Spain had resubordinated the colonies to centralism at the expense of localism (a backward step) The consequences were not felt until the late colonial crisis caused by Napoleonic wars.

[Didz]

I always enjoy healthy discussion and enjoyed reading your post as well. There really are many and various reasons for the decline of the Spanish Empire. I gave what we in the U.S. would call the "Cliff's Notes" version of some of the reasons (basically an abridged summary of some of the points).

Thank you for a very informative post +rep.

Its also interesting to note that during the spanish inquisition many of the jews being expelled from Spain resettled in Venice and Amsterdam which had a reputation for religious tolerance at the time. These jews with their international trading contacts assisted in the rise of both Venice and the Low Countires as major trading centres to the ulitmate detriment of Spain.

There is a lovely fictional novel based on this called the 'Coffee Trader' by David Liss, which highlights the life of a jewish merchant in Amsterdam, whose family fled Portugal, and my son actually dated a Dutch girl whose family originated in Spain.

The other major impact that must have arisen in Spain as a result of expelling the jews is linked to the Christian churches laws on usary. Throughout Christendom at this time there was a prohibition against usury, or charging interest. The Church held it to be a grave sin and the code was upheld by the civil powers. There were harsh penalties for those who broke the law.

The regulation of usury was to prevent the separation of money from reality. Money is not a good, it is a measure. It is fraud to pretend otherwise, and constitutes theft. Usury is making money from lending money; it is making money from nothing. Therefore, it is wrong and doing it is sinful.

Therefore anyone, merchant or prince, who needed to raise funding for a commercial or military project had to go to a jew to borrow the cash. Whilst this was resented by Christian's and explioted by the Jews, the fact remained that the absence of such a ready source of investment capital in Spain must have had a severe dampening effect on any costly project. We know for example that Marco Polo and his team were forced to seek noble patronage in order to obtain the funding for their expeditions, which must have been far harder to do than simply borrowing the cash they needed. (Source 'A Short History of Banking)

By comparison the Dutch, the Venetian's and the English all had access to a ready (if expensive) source of venture capital from their itinerant jewish communities.

[carricanta]

Its also interesting to note that during the spanish inquisition many of the jews being expelled from Spain resettled in Venice and Amsterdam which had a reputation for religious tolerance at the time. These jews with their international trading contacts assisted in the rise of both Venice and the Low Countires as major trading centres to the ulitmate detriment of Spain.

There is a lovely fictional novel based on this called the 'Coffee Trader' by David Liss, which highlights the life of a jewish merchant in Amsterdam, whose family fled Portugal, and my son actually dated a Dutch girl whose family originated in Spain.

For instance, the philosopher Spinoza

http://en.wikipedia.org/wiki/Baruch_Spinoza

[Unteroffizier Rizz]

Thanks to all...I was sitting in math class a while back, and the Spanish Empire popped into my head for a few minutes while daydreaming. Really great info

[carricanta]

NJGOAT, i agree with the most of your discuss, but, i don´t think that the problem was about the fault of a strong central power, because, this strong power were not necessary in the past with the Austrias and the declive begins with the Borbons...well, with the last Austrias and the first Borbons. Anyway, when Great Britain is a central strong power? with the battle of Culloden and the end of a scottish "independent"? In South America the worst policies were when Madrid gave no the autonomy for the own development in economic matters... well, i think that this thread is very interesting but, following to A. Toynbee, i think that the excess of a military policy gave the declive of the Spanish Empire (like it happened with the Soviet Union). The gold and silver mines were "exhausted" in two centuries of wars while the people was not progressing and the richness didn´t distribute and didn´t invest in improving infrastructures and industry

[AUSSIE11]

from what reading iv done and my experiance as an economics student i agree with all thats been said above... spains decline was due to several major factors:

1) poor economic management, there was practically no free trade with the americas until 1790. also the economy was rigorously controlled allowing for little growth...this was in complete contradiction of Englands "light handed"approach which although this did cause trouble, (read "south sea bubble") it also allowed englands merchants to dominate along with dutch.
2) uneconomic military systems. this was continuous. i haven't read much about this yet but it seems spain had an obsession with "BIG" things, particularly ships. see the opposed lineupes at cape St. Vincent. this is uneconomic because ship construction and maintanence costs rise exponentially whilst battle effectiveness rises disproportionately. (also read any account of trafalgar to readabout the duel betweeen Africa(64) and Santissima Trinidade(130 odd).
3) backward social reforms...read above...
4) poor economic management...(chuck it in again for emphasis)
5) a series of costly and futile wars. Lazare Carnot put it best when he pronounced "war must pay for war". this is seldom the case in religious repressions (read netherlands and attempted in england). for war to be self sustaining it has to be for one of two reasons. resisting an attempted merger by a hostile takeover of a valued asset or conducting a hostile takeover of an opposition asset. in either cases pros and cons must be weighed and expenses predicted and compared to prospective gains and the period before either the takeover or defence be undertaken. takeovers undertaken for any other reason will only cost money and money don't grow on trees

[HMS Empire Broadsword]

One reason the Spanish economy died is because they imported so much gold and silver from their colonies to be made into money in Spain, than because of the vastly increased supply, and thus the falling demand, silver and golds value plummeted, bankrupting Spain.

They failed to realise money is not gold or silver, its actually trust, and how much somebody is willing to pay for something.