167 lines
8.6 KiB
Plaintext
167 lines
8.6 KiB
Plaintext
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Conspiracy Nation -- Vol. 1 Num. 23
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("Quid coniuratio est?")
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SPAIN: OUR NEIGHBOR TO THE PAST
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This is not dealing with conspiracy *per se*. But it is
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tangentially related.
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In *The Great Reckoning*, authors James Dale Davidson and Lord
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William Rees-Mogg show how world economic dominance has moved
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from Spain, to Holland, to Great Britain, and finally to the
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United States. Speaking of the glory days of old Spain (approx.
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1525 to 1625 A.D.), they write:
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There is no better example of a nation that underwent an
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imperial crisis of costs and spent itself into oblivion
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than Spain, the great power of the early modern period.
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Leadership of the Spanish government was totally
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dominated by tax-consuming interests: the military, the
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bureaucracy, the church, and the nobility. Long after it
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became obvious that the Spanish economy was in trouble,
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Spain's leaders resisted every effort to cut costs. Like
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American politicians today, they could not believe that
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the money would ever run out. Each new setback to the
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economy was treated as an occasion to launch a grand new
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program. Taxes were tripled between 1556 and 1577.
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Spending went up even faster... By 1600, interest on the
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national debt took 40 percent of the budget. Spain
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descended into bankruptcy and never recovered.
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This period of Spain's economic dominance is known as the "Siglo
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de oro," the "Century of gold." One result of its exploration and
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colonization of the New World was that Spain began to import a
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*lot* of gold. What follows will give you more details on Spain,
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our neighbor to the past.
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+ + + + + + + + + + + + + + + + + + + + + +
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[From *La civilizacion espanola* by Diego Marin. Edicion
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revisada. New York: Holt, Rinehart and Winston, 1969. Translation
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by Brian Francis Redman, Editor-in-chief, Conspiracy Nation.]
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The Economic Crisis
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One of the most significant paradoxes of the Spanish empire
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during the *siglo de oro* is the chronic state of economic crisis
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in which it lived, beneath its grandiose splendor. In spite of
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the gold and the silver coming in from the Indies, the Exchequer
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was always in debt to foreign bankers and the national economy
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became less and less productive. The military obligations of the
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empire brought with them an increase of expenses in excess of
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revenues, so that the preoccupation of the government became that
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of obtaining money at whatever cost, using urgent means that in
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the long run ruined commerce and industry -- all the while never
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comprehending that the true cure of economic woes lies in
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increasing national production. That was the price paid by Spain
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upon converting itself into an imperial monarchy and keeping its
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own material interests subordinated to interests not always
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national.
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The financial difficulties had begun already under the reign of
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Carlos V and they kept increasing during subsequent reigns, up
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until the point where Felipe II declared bankruptcy three times.
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The economic protectionism that had been initiated with so much
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success by the Catholic kings had to be abandoned in order to
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satisfy foreign capitalists that had approved loans to the
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Emperor, who gave them as security for the loans the collection
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of future taxes, the privilege of buying raw goods (such as wool,
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iron, etc.), and of selling their manufactured products in Spain.
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With this foreign competition, the development of local commerce
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and industry was diminished, as it was also in other European
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countries.
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The other factor that contributed the most to the weakening of
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the Spanish economy was precisely the gold and the silver so
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providentially discovered in the Indies during the formation of
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the empire, but which served only to pay back the foreigners that
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had loaned money to the Crown or that sold manufactured goods to
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the Spaniards. The sudden arrival of those precious metals
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produced an inflation that revolutionized prices in all of Europe
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by increasing the amount of money in circulation in greater
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proportion than the amount of disposable goods. But the rise in
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prices began first and rose most in Spain which had converted
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itself into a country with the unfavorable balance of importing
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more than it exported (because they had the money to pay well),
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but where the prices were too high for them to be able to export
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their own products. This slowed down even more the development of
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the nascent Spanish industry. (The salaries in Spain were double
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those in France and England. Thus, products produced in foreign
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lands could be sold more cheaply than products produced in Spain.
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Thereby, industrial development in these foreign lands was
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favored -- at a cost to industrial development in Spain.) Even
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the commerce from the Indies, the main source of income for the
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Spanish, was diminishing since the second half of the 16th
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century and was passing into foreign hands, either legally or as
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contraband, until the supposed Spanish monopoly of colonial
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commerce represented only 5 percent of the commerce of the Indies
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at the end of the 17th century. For its own part, the greater
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portion of the American treasure never even made it to Spain,
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decreasing in little more than half a century from 35 million
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pesos to 3 million pesos.
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In the 17th century, faced with the failure of previous financial
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remedies, other means were sought. Instead of new loans that only
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increased the national debt and which were, at any rate, harder
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and harder to obtain due to falling confidence in the state...
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instead of imposing new taxes on a population already taxed to
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the limit... Spain resorted to the expedient of devaluing the
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money, giving to its copper coins the value that, of old, was
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given to its silver coins. The treasury increased more than 100%
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by this operation, but the gold and the silver disappeared from
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circulation and the economy suffered from renewed inflation that
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increased the cost of production. And when, to halt the
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inflation, the nominal value of the money was lowered, that only
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served to increase the economic disorder. The insecurity felt by
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such fluctuations in the value of the money tended to paralyze
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the economy even more, until around 1680 there was a complete
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collapse of prices and a depression that left businesses with
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neither merchandise nor money and the royal family without the
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financial resources to take its summer vacation. In the end the
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government could do nothing, which resulted in being the best
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possible policy because at least it wasn't disturbing the
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economic life.
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Finally, we ought not to forget that the Spanish mentality of the
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time contributed to this economic decadence. As a Florentine
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ambassador observed at the beginning of the 16th century, the
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Spanish "do not dedicate themselves to commerce, considering it
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to be beneath them, because all of them have in their heads
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certain airs of nobility." This prejudice against mercantile and
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industrial labor was not just limited to the nobility, as in
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other nations, but was spread to the other classes. The bourgeois
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saw in the noble his social ideal and tried to obtain royal
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titles for his children (not only for vanity, but for the
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extension of taxes and other privileges.) As a proverbial phrase
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from those times indicates -- *Iglesia, mar o casa real* (Church,
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sea or royal house) -- the Spaniard aspired to be either priest,
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conqueror or bureaucrat, not businessman or factory owner. That
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is to say, he preferred to gain riches and honors by the effort
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of his sword, or to live by a salary that, although modest, gave
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prestige. At the end of the 17th century, the government, alarmed
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by the decrease in industry, tried to rehabilitate the social
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concept of work, declaring that the making of fabrics was not
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incompatible with nobility; but such a revolutionary idea did not
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begin to produce effects until a century later under the new
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Bourbon regime.
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Aperi os tuum muto, et causis omnium filiorum qui pertranseunt.
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Aperi os tuum, decerne quod justum est, et judica inopem et
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pauperem. -- Liber Proverbiorum XXXI: 8-9
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