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15 Cards in this Set
- Front
- Back
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Intro 1 |
. Lotherington says that Charles' overriding need for money made a coherent economic strategy impossible . Opening up of the New World should have provided Castilian trade and industry with a big boost, but instead foreign merchants and producers benefited most as they could keep up with the demands of the colonists . Castile continued to depend heavily on foreigners to invest in the New World . There had long been a colony of Genoese traders in Seville who were well-placed to benefit from New World trade |
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Intro 2 |
. From 1524-38 Charles tried to repay his foreign bankers by granting permits to trade directly with America . Kamen states that from 1524 onwards, Aragonese were allowed to emigrate to America directly and Aragonese and Catalans could be found in Seville trading freely . Other foreigners traded through Castilian agents anfd other areas participated in varying degrees, e.g. the northern ports built 80% of the ships on the Atlantic crossing between 1520 and 1580 |
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Manufacturing 1 |
. Manufacturing suffered from inflation and government intervention . Castile's textile, ceramic and metals industries found markets in the New World, but as the reign progressed prices rose to uneconomic levels . Labour shortages held down production and quality declined as prices rose . Charles, under pressure from the Cortes, tried to lower prices by banning textile exports except to the Indies and permitting imports in a bid to keep domestic prices down . Castilian complaints about high prices reached its climax at the Cortes of Valladolid in 1548, which attributed the high prices for the demand for Castilian cloth abroad and they proposed as a remedy that foreign cloth should be allowed to be imported into Spain and all exports of Castilian cloth, even to the Indies, should be forbidden . The Crown responded by allowing the import of foreign textiles . In 1552, the Cortes was still unhappy and the Corwn had to prohibit all exports fo Castilian cloth, except to the Indies |
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Manufacturing 2 |
. This all led to a sharp decline in the Castilian textile industry andf the ban was reversed from 1555 after the industry had collapsed, but the Castilian trade in wool and finished cloths never recovered . This reveals that there was little understanding of economic forces and attempts to micro-manage textile trade were shambolic . Small manufacturers found rising prices and cheap foreign imports were damaging their trade . For many, emigration to the New World became attractive for people looking to escape poverty from rising prices and taxation . There was shortage of other commodities too, 75% of Spanish textile production going abroad, much to New Spain - Traders were happy to exchange woollen cloth for bullion . Spain was also losing a fair proportion of her most entrepreneurial subjects to New spain where social mobility was much more possible |
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Manufacturing 3 |
. New World bullion was used to fight wars and support a lavish lifestyle for the nobles, but it was not used to invest in industry and provided no long lasting benefit for Spain . Heavy taxation discouraged industrial investment within Spain and the surest financial return was to be gained by buying government 'juros' . The pressing need to fight wars led to the failure to develop an indigenous (domestically-based) economy in the New World or build up the Castilian economy . Money was always required in the short-term and this prevented a long-term strategy . Also a shortage of wood for ship-building meant that ships had to be built in the north away from Seville and Cadiz - Also meant that the number of new ships that Spain could build was reduced . This shortage of wood was even noted to have affected peasants trying to cook and keep warm |
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Manufacturing 4 |
. It was not all problematic; some parts of the economy did flourish under Charles: . Seville and its surrounding area enjoyed the fruits of the monopoly on Atlantic trade . Ironworks of the Basque region flourished . Ceramics, leather and silk production all grew . Lotherington argues that in hindsight Charles' handling of the economy was perhaps his greatest failure . Kamen points out how other nations profited from Spain's failures as armaments were imported from Italy and textiles from England to satisfy the colonists' needs . Lotherington also notes Charles' very imperfect grasp of economic matters and his pressing need for ready cash - Investment in industrial enterprises was a risky business with a slow and uncertain return . Bullion on the other hand was very acceptable to foreign financiers who would lend large sums on the security of future shipments . Rising population, New World trade and bullion gave the impression of considerable economic progress |
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Agriculture 1 |
. Spanish agriculture remained backward . This was a situation which had developed by 1516; there was too much emphasis on the Mesta due to the taxes it paid to the Crown, but the consequence was a necessity to import wheat . Lotherington says that Spain managed to maintain an illusion of strength as Europe's greatest power until 1660, but only because the people suffered terribly, not because it was strong economically . Increased amounts of imported grain showed that arable farming was unable to produce adequate amounts - These imports mainly came from southern Italy and Sicily, thus the threat from North African pirates could not be ignored . Hunt also blames the Mesta for holding back the needed growth in arable land - The Mesta was able to increase its power under Charles . 3 million Mesta sheep in 1516 and in addition 12 million non-migratory sheep |
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Agriculture 2 |
. Kamen looks back to the Catholic Kings and says that they had not solved agricultural backwardness and any increase in output of crops had come from hard work, converting common land to pasture and not technological gains . McClive sates that there appeared to be an agricultural economic boom in the 1540s/50s as more land was taken up for agriculture, e.g. in Valladolid and Segovia . In the north of Burgos there was a big increase in wheat and wine production . Burgod itself, as a centre of the wool industry, grew from a town of 8,000 to one of 21,000 . However the boom did not last - Agricultural technology had not improved and this held back substantial improvements in agrarian development |
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Population increase |
. Rapid population increase put all kinds of pressures on the economy - The population of Castie was around 4.7 million in 1534 and 6.7 million in 1591 . The rise was not evenly spread - New Castile especially saw sharp increases of 75%; in some cities it was even higher . Some towms showed a decrease in population - this suggests an imbalanced economu . There was a general trend in migration southwards, especially to the booming Seville and Andalusia; some moved on to the New World . Seville grew frin 33,000 in 1534 to 95,000 in 1561 . Farmers of Castile could not supply sufficient grain for the population, so grain imports increased as did the price of food in the reign . Kamen says this inflation was occurring as a result of population increase even before New World money poured in |
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Inflation 1 |
. There was unprecedented inflation - In Andalusia the price of wheat more than doubled from 1511-59 and the price of oil tripled in the same period . For landowners, merchants and traders their incomes probably outpaced inflation, but for the lower orders inflation often spelt poverty . In Valladolid, the poor were estimated to be 20% of the population . Above the poor there was a class of better off individuals hit by rising prices and cheap foreign imports coming into Spain encouraged by the amount of precious metal in circulation . In his 1556 lectures at Salamanca University, Martin de Azpilcueta suggested that the appalling rise in commodity prices was due to bullion imports . Hunt argues that inflation was caused by more deep-rooted and universal causes; all Europe was facing inflation, Spain did not have to debase (reduce to value of) its coinage unlike other European states . A rising popualtion and a shortage of commodities were just as much causes of inflation as the bullion influx . Wheat prices doubled in Castile in the first half of the 16th century |
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Inflation 2 |
. Economic historian Jorghe Nadal has calculated that the rate of inflation over Charles's reign was 2.8%/year 'an astonishing figure for an agrarian economy befroe the industrial revolution' . In 1934 EJ Hamilton adopted the monetarist argument that imports of bullion from the New World lowered the value of money by increasing the supply . Hamilton suggested that after 1530, 20% less goods could be purchased for the same amount as before 1530 and coined the phrase 'price revolution' . Mulgan calls the New World bullion a 'poisoned chalice' as it led to an increase of coinage in circulation and those selling goods increased their prices to acquire more coinage - hence contributing to inflation . Maltby says a more serious porblem leading to inflation was the population increase combined with a growing demand for Spanish agricultural products in the New World |
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Inflation 3 |
. The colonists would not accept a diet without wine and oil, so wheat fields in Andalusia gave way to vineyards and olive groves . Thus, even the south had to import grain from the north buit northern peasants were already under pressure to meet demand and could not cope with the volumes required . Maltby says that the foolish decision of government to impose price controls on grain in 1539 led the whole system to become uneconomical and Castile became a net importer of grain . Kamen suggests that population pressure, the economic impact of exports to the New Worl and bullion imports were three interlinking factors behind inflation . To the demand of population rise was the added pressure of serving the new American market for food and manufactures . There was a boom in the Castilian economy, especially Andalusia, where from 1511-59 wheat increased in price by 109%, oil 197% and wine 655% - For consumers, the result of inflation was a fall in living standards |
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Inflation 4 |
. In Valladolid, from 1511-50, wages rose by less than 30% whilst wheat rose 44%, mutton 41% and wine 64% . Not just wage labourers suffered - Clergy on fixed stipends, and peasants who rented land from nobles or the Church were likely to see their rents rise rapidly . There were complaints about the higher cost of living presented in almost all Charles' Cortes, as well as complaints about the export of raw materials and the import in their place of foreign goods that competed successfully against Spanish products in Spain and America . Export of raw materials was not new, but Kamen says the new dimension was the foreign manufacturers that were flooding in to try to be paid in Spanish bullion |
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Inflation |
. In 1548, the Cortes complained that foreigners brought in goods and took home cash, not Spanish products . A lot of bullion was taken out illegally through foreign channels or hidden among other commerical items - Soranzo claimed in 1556 that 5.5 million gold crowns entered France this way every year . A lot of bullion left legally for Charles to pay his bankers, but this was still profit that left Spain . From 1515-51, the Cortes petitioned 12 times for a ban on exports on bullion to stop forteigners bringing in goods and not buying Spanish goods |
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Conclusion 1 |
. Many of Charles' economic and financial problems were to prove disastrous later for Pihllip II . There was too much emphasis on sheep and too little on agriculture, thus by 1560 wheat had to be imported . High taxes meant limited cash was available to invest in industry, most wealthy people aimed to buy juros for a quick profit . Manufactured goods were imported to send to the colonies and sell in Spain - A 1548 ban on exports of cloth had caused a major depression in the Spanish industry from which it never recovered . Uneven tax burden, nobles were exempt and resisted reform - this led to poverty for the masses and investment in titles of nobility, not industry . Castile ended up financing war in the rest of Charles' territories |
