Where exactly did these problems lie and what areas required alteration to keep Spain afloat? From this point I will go on to see the policies in action and from this I will gather whether or not they were realistic.
1. The problems with Spain.
On an international scale, Spain between 1580 and 1620 was at the crest of her wealth and power. Her supremacy was the dread of all other nations, and therefore its destruction was the cherished object of statesmen for a century. Her galleons ruled the seas and her armies were feared. Yet due to the internally bad reputation that industry and commerce had, Spain"s economy was faltering. In comparison with her European neighbours, Spain was industrially, agriculturally and commercially stagnant and wallowing in her old-fashioned militarism. With a vast and newly acquired empire, Spain was rapidly propelled to the front of the world stage, but the costs of maintaining this empire proved crippling. She manufactured very little that her neighbours required, apart from treasure. Yet with the mass influx of gold and silver from the colonies, treasure prices collapsed and in the long term led to rampant inflation. .
Table adapted from a graph in .
Years Imports of treasure in millions of pescos Index numbers of prices in silver (taken from the first year i.e. 1580, 1585, 1590 etc.) Index numbers of money wages (taken from the first year i.e. 1580, 1585, 1590 etc.).
1580-1584 29.5 98 100.
1585-1589 24 105 109.
1590-1594 35 108 119.
1595-1599 34.5 118 121.
1600-1604 24.5 132 131.
1605-1609 31 138 160.
1610-1614 24 129 165.
1615-1619 30.5 128 164.
1620-1624 27 129 163.
1625-1629 24.5 121 162.
1630-1634 17.5 132 170.
1635-1639 16 124 175.
1640-1644 14 133 179.
Yearly Spain had to acquire more and more wealth to maintain equilibrium and so yearly she spiralled closer and closer to bankruptcy. When silver mines had nothing more to yield or treasure fleets were lost at sea, Spain was forced to borrow on a tremendous scale with foreign bankers.
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