`The Decline of Absolutist Spain

Spain (more properly the Kingdom of Castile) had become an absolutist regime and had built a great empire earlier than the French had done so. As with France, it had developed a permanent professional bureaucracy, a standing army, and a national system of taxes (servicos) which fell most heavily on the backs of the peasants. It differed from France in an important regard: whereas France had depended on financial and administrative support within its own borders, Spain had built its absolutist empire on a foreign empire, primarily gold and silver from South America. The wealth Spain had imported from its empire allowed it to dominate Europe; however by 1590, as France was developing into a truly modern absolutist state, Spain entered a period of slow but permanent decline.

Several factors led to the decline:

The lack of a middle class and disdain for commerce. While the French Bourgeoisie had grown in size and importance, The Spanish middle class, slowly declined. It had been primarily composed of Jews and Moors, but these two groups had been expelled from the country. Traditional Spanish culture viewed money with disdain at a time when mercantilism and commercial development were blossoming in other parts of Europe. Making money was considered vulgar and undignified. Thousands of people either became monks and nuns, or entered nonproductive professions. There was said to be nine thousand monasteries in Castile alone.

At the same time, the flood of gold and silver from Spain’s American empire produced severe inflation, pushing the costs of production higher and higher. Castile had once had a thriving textile market; however inflationary pressures raised their price so high that they could not compete with colonial and other international markets. Many merchants simply gave up because the obstacles against making a profit were simply too high. The gold and silver which had made Spain mighty proved to be the touch of Midas. It produced incredible wealth, but destroyed the middle class and created a contempt for business and manual labor.

A number of aristocrats, in an attempt to maintain the extravagant lifestyle to which they had grown accustomed, increased the rents on the peasants who lived on their estates. A combination of high rents and exorbitant taxes drove peasants from the land, and agricultural production suffered. Many peasants moved to the cities where they increased the number of beggars on the streets.

The ruling Habsburg family had neither the intelligence nor the inclination to tackle the problems. They all lacked force of character. Philip III was a deeply pious man "whose only virtue appeared to reside in a total lack of vice." Incapable of running the country himself, he handed its governance over to the Duke of Lerma, a lazy rascal who used his position to enrich himself and his family. Philip’s successor, Philip IV, was intelligent and strong willed, but lazy. He left management to Gaspar de Guzman, the duke of Olivares. Olivares was very capable, but a bit anachronistic. He held to the somewhat grandiose belief that the solution to Spain’s difficulties lay in tradition, which included war with the Dutch, and a long war with France. Zealously devoted to the king, he once ceremoniously kissed the kings chamber pot as an act of devotion and obedience.

Olivares, called the Count Duke, believed Spain could not remain a world power without a marked economic resurgence. He once wrote "We must devote all our efforts to turning Spaniards into merchants." He adopted the motto of "one king, one law, one money."

An example of the incompetence that plagued the country is evidenced by a royal council appointed by Philip IV to plan a canal which would join the Tagus and Manzanares Rivers. There was interminable debate and countless delays until the council decided that "if God had intended the rivers to be navigable, he would have made them so."

All of this happened at a time when the kingdom was broke. Unable to pay its debts, the throne debased the currency (reduced the amount of precious metals in the coinage) and frequently declared bankruptcy, thereby canceling its debts without payment. The frequency of cancellation of debts destroyed confidence in the government.

Spanish decline began with the revolt of the Spanish Netherlands. Dutch nobles and officials resented the higher taxes imposed by the Crown; and many Dutch were angered at the attempts of the Spanish king to promote the Catholic reformation by imposing the Inquisition in there as had been done in Spain. Most Dutch at this time were Calvinists, and the attempt to force them back to Catholicism was deeply resented.

In 1567, Phillip II sent the Duke of Alba and 10,000 Spanish troops to restore order in the Netherlands. Alba was as ruthless as he was arrogant. Alba once said that "everyone must be made to live in constant fear of the roof breaking down over his head," and warned that he was "resolved not to leave a creature alive but to put them all to the sword." He instituted a Council of Troubles, which the Dutch called the Council of Blood. He executed Calvinist nobles on the central square in Brussels, established military courts, imposed exorbitant new taxes, and destroyed any semblance of self-governance. His harsh measures only hardened the Dutch resistance, led by William of Orange. The resistance soon became a national revolt in 1572.

The rebellion of 1572 saw Spanish troops dominating the land, and Dutch ships dominating the sea. When a Spanish army besieged the city of Leyden, southwest of Amsterdam, the people of the town breached the dikes which held back the sea. The waters rushed in and the Dutch ships sailed on the water into the midst of the town and drove the Spanish forces away.

Compared to other European Armies, the only advantage of the Spanish was in medical care of the wounded. It had acute problems recruiting and supplying troops, and efforts to save money, such as charging sharpshooters for the powder and shot they needed, only exacerbated the problem. Troops were seldom paid on time, and food rations were poor, often leading to mutiny; frequently from non-Spanish troops. By 1577, the Spanish army, unpaid for months, dwindled from 60,000 men to fewer than 8,000.

A number of Catholic nobles had second thoughts about fighting with Dutch Protestants. They detached the southern provinces from the rebellion and in 1579 formed the Union of Utrecht. Two years later, they declared independence from Spain as the Dutch United Provinces. The Dutch provinces had been an important source of revenue for the Holy Roman Empire and Charles V; however when the provinces declared independence, this income was lost to the Spanish throne forever.

In the meantime, the Spanish population fell from over six million to just under 5.2 million, as a result of a series of plagues, harvest failure, smallpox and emigration. Gold and silver from the Americas accelerated inflation by increasing the supply of money, as did royal monetary policies of debasing the currency. Several times the Spanish government was forced to declare bankruptcy, and renegotiate loans at increasingly unfavorable rates. In 1576, Spain had five times the military expenditures of the Dutch, English, and French combined. One noble commented that it already seemed as if "the ship is sinking." A Flemish scholar wrote to a Spanish friend, "Conquered by you, the New World has conquered you in turn, and has weakened and exhausted your ancient vigor."

Spain was in a large sense a victim of its past. It could not forget the grandeur it had enjoyed when its overseas empire was a virtual cash cow. With the decline of income from American gold and silver, the state also declined. The most cherished Spanish ideals: military glory and strong commitment to Catholicism were all that remained. Yet the country did not have the resources to man an expensive war, yet it insisted on involving itself in wars it could not finance.

When the government was forced to obtain large loans from foreign bankers at exceptionally high interest rates, it attempted to raise money by imposing a tithe, or assessment of one tenth of the most valuable piece of land in each parish. It also passed an extraordinary tax on towns, and a sales tax on consumption. Instead of increasing revenue, this forced many middle class people to abandon business and purchase noble status, which provided some money for the crown, but deprived it of taxes in the long run. .

Spain was not in a position to fight the wars in which it found itself, both in the Netherlands and with France in the Thirty Years War. In 1628, Dutch pirates captured a Spanish fleet loaded with silver, an enormous loss to the Crown. Foreign lenders were unwilling to make further loans, and Spain was forced to increase taxation to meet its expenses. Unable to defend its American possessions, Dutch and English ships began to attack its interests there. The days of the once powerful Spanish Empire were numbered.

The hopelessness of the Spanish situation is exemplified in Miguel de Cervantes’ novel: Don Quixote, one of the great masterpieces of world literature. Cervantes had fought with the Spanish army at the Battle of Lepanto where he received a wound that permanently crippled his left hand. He later was captured by Turkish pirates and held as a slave for five years before escaping and returning to Spain. He produced the first part of Don Quixote in 1615.

The main character of the novel, Don Quixote, lives in a world of dreams, traveling about the Spanish countryside searching for military glory. The story is, on a deeper level, a story of national disillusionment in the face of perceived national decline. From the title of the book has come the English word, quixotic, meaning idealistic but impractical.

The gloomy attitude of hopelessness is also portrayed in the work of the Greek-born artist, El Greco. A prime example is his painting: The Burial of the Count Orgaz, (1516) which shows figures gazing up at a vision of celestial glory, the splendor of which is heightened by the dismal scenes below them on earth.

The Spanish monarchy never learned that it could not fight effectively on more than one front, a lesson the French had learned in Italy. French and Spanish fighting ended with The Treaty of the Pyrenees of 1659 which established the border between the two countries; a border that has lasted until this day with only a few minor changes. Spain surrendered Milan to Austria and Naples and Sicily to the Italian Bourbon dynasty. The Portuguese, aided by the English stopped several halfhearted Spanish attempts to subdue them, and in 1668, Spain recognized Portugal’s independence. Ten years later, France occupied the Franche-Comté, the last major Spanish holding in northern Europe.

In 1680, the depression that had lasted almost a century ended, and Spain was left a second rate power. Agricultural and manufacturing decline had been a factor, but the major cause had been that the Spanish crown had overreached its ability to maintain its vast empire.