Spain’s Lesson in Hubris: Tracing Spain’s Financial Collapse to the Beginning of its New World Empire

[robinjojo]

For those who like to read about economics with a historical perspective, I came across this interesting essay today.  It looks at the impact of the wealth, in gold and silver, that flowed into Spain during the 16th century, and how that flow impacted Spain economically and socially, eventually leading to an inevitable state of decline among European states.  

I would like to add to these essay's thesis that other factors drove Spain's decline:  notably the expulsion of the Jews in 1492, the Muslims (Moriscos) between 1609 and 1614, and the effects of the Counter-Reformation in the 16th to early 17th century.  The expulsions caused Spain to lose much of her merchant and intellectual communities, made even worse by the effects of the Counter Reformation, with suppression of scientific inquiry, as exemplified by the trial of Galileo 1633.  The effect these factors, along with those covered in the essay created a stagnant economy for Spain and a state of progressive decline.

Here's the essay:

https://theclassicjournal.uga.edu/index.php/2020/05/07/spains-lesson-in-hubris-tracing-spains-financial-collapse-to-the-beginning-of-its-new-world-empire/

[John Conduitt]

I think a lot of European economies suffered from the belief that trade is a zero sum game and you had to beat your rivals and hoard precious metal. Protectionism was key. It arguably drove the slave trade and led Britain to get China hooked on opium. To be fair, even today people think it is better to protect local industries and tariff imports.

[Al Kowsky]

The enormous amount of silver extracted from the "New World" created an imbalance between the ratio of silver to gold that lasted for centuries. This can be clearly illustrated with America's first coinage, when her gold coins were shipped to Europe en masse & melted down because silver was over valued in relation to gold.

Edited April 1, 2023 by Al Kowsky
correction

[robinjojo]

PBS aired a program in 2019, The Ornament of the World, a history of Moorish Spain.  I highly recommend viewing it.  It is now by subscription/donation.

https://www.pbs.org/show/ornament-world/