Decline of Spain

1
Decline of Spain

• Unit 2. Chapter 15.2

2
What was the truth about Spain at the end of
Philip IIs reign and the beginning of Philip III?

• By the 17 th Century, the nation which had been
  the most powerful started to decline fast.
• There were many factors which contributed to
  downfall of Spain
• We will look at the social, economic and political

3
Social Issues

• DISUNITY
• Aragon and Castile (1469) / Aragon vs. Castile
• Legal systems and internal government of each was
  still very separate (courts etc.)
• Aragon was divided into Aragon Proper, Valencia,
  and Catalonia (Each had its own institutions,
  customs and identity
• Massive overseas empire (Americas, Far East)

4
Spanish Empire
5
Taxation (Economic)

• The empire had considerable resources
• Unable to exploit because local interests were
  reluctant to pay for the costs of other
  territories.
• Castilian tax- alcabala (10 sales tax)
• Inflation (people couldnt pay)
• Collection went to local nobles rather than crown
• They then began to tax basic food, meat and wine
  (much of which fell on peasants)
• Silver mines declined in productivity

6
Registered Bullion Imports in kilos Registered Bullion Imports in kilos
1531-1580 2,628,000
1581-1630 11,461,000
1631-1660 2,896,000
7
Taxation (Cont)

• Uneven distribution
• Fell on poor more than rich
• Heavily on farmers
• On Castile more than Aragon
• All the while their spending was out of control
  (Like the USA TODAY!)

8
DEBT

• Borrowed money (with interest bearing bonds)
• They assigned revenues from future years to the
  bankers to pay for the current defense contracts
  (Sound familiar)

9
DEBT

• PRINTED NEW MONEY!!

10
SPANISH NOBILITY
11
2 Philip III

• Lazy
• Allowed duke of Lerma to run the show
• Appointed friends and relatives to high positions
  
• No problems solved
• Fascinated with his court and also miracle
  working relics
• Fathered 8

12
Philip IV

• Relied on Count of Olivares (Sully, Richelieu)
• Some reforms made, but it was for the benefit of
  his monarchy not Spain

13
Summary
14
SPAINS ECONOMY

• No Middle Class
• Jews and MOORS gone
• Decline in population (2million)
• INFLATION (PRICE REVOLUTION)
• Hurt domestic economy, unable to export
• Catholic Church (most prosperous business in
  Spain)
• No trace of Capitalism
• Little industry (outproduced by Dutch and
  English)
• Nobility
• Poor work ethic
• Refused to work and cont. their lifestyles
• Tax exempt
• Taxes on Peasants

15
Military and Political

• Poor leadership
• Philip III, IV and Charles II lethal
• Loss of 30 Years War
• Lost Netherlands
• Lost Portugal
• Treaty of Pyrenees (1659) End of Spain as Great
  Power
• War w/ France continued 11 years after Westphalia
• Spain Lost Netherlands and Catalonia in N. Spain
• Navy by 1700 had only 8 ships (army mercenaries)
• War of Spanish Succession resulted in loss of
  most European Possessions and the ASIENTO