Would Spain have been better off without its American colonies?

[Herman Gigglethorpe]

I was reading Spain: A History by Malveena McKendrick today when I came across this quote:

"The supreme irony is that it is possible to regard the acquisition and colonization of America as, not the saving, but the downfall of Spain."

She then goes on to cite the inflation caused by gold and silver imports, the military costs associated with maintaining the colonies, emigration of talented individuals, and increasing hostility by other European countries.

Is McKendrick correct? Could Spain have been a more powerful or prosperous country in the long run if it had not conquered the New World?

Although I use "Spain" in this topic, you can also use the personal union of Castile and Aragon if you prefer to talk about the pre-Columbian period.

 

[Analytical Engine]

Short term, probably not. Long term, maybe.

It would have been better off if it actually invested all of that gold and silver properly, instead of just turning it into money, causing rampant inflation and tanking its economy.

 

[Alt History Buff]

The influx of specie did cause a chronic trade surplus that led to any potential manufacturing sector to fail.

 

[Simon]

The influx of specie did cause a chronic trade surplus that led to any potential manufacturing sector to fail.

Well well one solution for that is to either institute a Buy Spanish policy or more likely offer foreign workers large sums of money to move to Spain to set up and run businesses there, after a while they would effectively become local concerns. It needs someone with a bit of forethought though rather than just throwing money at things to buy in any goods you want.

 

[PuffyClouds]

It would have been better off if it actually invested all of that gold and silver properly, instead of just turning it into money, causing rampant inflation and tanking its economy.

Please elaborate on this.

 

[NolanFoster]

Long term: very much yes. Without the flow of gold and silver from the Americas and its ruinous effect on the evolution of Spanish economic life, a stronger bourgeois middle class would have developed and an industrial revolution would have reached Spain on schedule.

 

[profxyz]

Difficult to say because the 'opportunity cost' of Spain going to the Americas might have been, ITL, directed towards other fruitless endeavors (i.e. North Africa expeditions).

Many reasons for Spanish political/economic failure also had not much to do with the American colonies:

- The failure to integrate Castile and Aragon (and later Portugal), both administratively and economically, led to lopsided burdens for Castile - and, more dangerously, perpetuated a legacy of Aragon/Catalan separatism and social warfare that would, time and time again, cause trouble for Madrid and eventually lead to the disasters of the 1640s.

- Castilian economic failure was not just a matter of silver imports (most of which would have, due to debt obligations, not remained in Castile anyway), but also due to the dominance of large rural landholding estates able to avoid taxes in Spain proper, the persistence of economic barriers between Castile, Aragon and Portugal, the impact of the historical wool trade in both capturing agricultural land (thus contributing to high grain prices and inflation) and also in creating monopolistic organizations that Madrid would later import into other industries, and the differing economic cycles/privileges of Castile and Aragon which proved to be a major obstacle to both development and reform.

- The conciliar nature of Spanish government was also a component of Spanish failure. While successful in taking power away from landed magnates and towns, the various Councils that reported to the monarch also tended to swamp the latter in paperwork, and also empowered royal secretaries and later, validos such as Lerma or Olivares (which itself enabled a culture of patronage/rentierism that also contributed to Spain's economic decline). Of course, reforming this system was anything but easy as the 1640s would demonstrate. It's also difficult to see how Habsburg Spain could have avoided fighting the French-Dutch-English wars that were to bankrupt it in the 16th/17thC, with or without American silver.

In addition, America itself had the potential of bringing great benefits to Spain: it served as an outlet for frustrated second sons of the nobility, it gave Spain a special status in Catholicism that it leveraged to its great benefit (e.g. control over Church revenues), and to an extent it did create economic union as textiles from Aragon found their way via Seville to the New World (though Aragon merchants were still excluded); certainly Spanish America synergized very well with 16thC Portugal's need for silver to fund its Asian trade which helped sustain the Iberian Union. Spain also had the option of promoting a complementary colonial-homeland economy in the Americas, rather than allowing it to become economically independent.

 

[Lampiao]

Well, it's quite a complicate question and I personally don't think that it would be beneficial for Spain in a long term.

First of all, the obvious: precious metals are money and money have only one clear vocation, it flows from one place to another as people do commercial transactions. All European nations minted with American metal, I've seem a paper once that analyzed the metalic composition of particular coins to determine the geographic origin of the metals that were used during a particular period and nation. It doesn't matter if the mines are Spanish, French, English, etc. Once the silver is in Europe, it'll start flowing everywhere. It's the Price Revolution. Of course, the revolution was felt with varying intensity depending on the country, being Spain the most affected.

Secondly, Early Modern Spain had three major geopolitical focuses: the Americas, the Netherlands and Italy.

As I see it, the Netherlands will be pretty difficult to sustain without a strong presence in the Atlantic (which was garanteed by the American commerce); a little bit later, the Reformation will make the control of the Netherlands a lost cause.

As for continuing the vocation of Aragon and fight in Italy and in the Mediterrenean is just as terrible as the Dutch situation because 1) the Spanish will have to face two great powers, France and the Ottoman Empire; 2) The stability of their rule over Italy will largely dependend on the Pope; 3) Most importantly, if the Spanish focus on Italy instead of the Americas, they're pretty much focusing on the decaying old trade routes that crossed the Muslim world which were incresingly losing territory for the oceanic trade routes; so, a long-term economic dead end.

TL; DR. The Spanish fought too many wars that they couldn't win, the American silver and gold could've been better spent.

 

[Galba Otho Vitelius]

Its something of an iron law of history that empires never, ever, benefit most of the people living in the metropolis (the nation state at the center of the empire).

 

[Tonifranz]

Its something of an iron law of history that empires never, ever, benefit most of the people living in the metropolis (the nation state at the center of the empire).

Well, not really.

The Mongols themselves benefited from their empire.

So did Rome.

And England and London.

And the United States too.

And the Athenian Empire gave massive benefits to Athenian Citizens in Athens.

Constantinople certainly benefited from the Byzantine Empire.

And Mecca too from the Arab conquests.

Prussians certainly benefited from the formation of the German Empire.

The Netherlands certainly benefited from its colonial Empire.

And so did the Belgians from their empire.

 

[Sian]

Please elaborate on this.

a large percentage of the money that Spain gained from New World was funneled into the black hole that was Austrian supremacy in HRE against the heretic northern princes

 

[funnyhat]

a large percentage of the money that Spain gained from New World was funneled into the black hole that was Austrian supremacy in HRE against the heretic northern princes

The 80-year fight against the Dutch Republic ate up a lot of it, too.

 

[Analytical Engine]

@Tonifranz: the majority of people in those situations that benefited from empire were the elites, and (if it existed) the middle class.

Galba Otho Vitelius specifically said the people living in the metropolis, rather than the metropolis itself.

Take the UK, for instance. Whilst the poor in the colonies laboured to extract/produce primary resources, the poor in the mother country laboured to turn said resources into manufactured goods.

 

[Janprimus]

The 80-year fight against the Dutch Republic ate up a lot of it, too.

Not to mention, that the Burgundian Inheritance during the reign of Charles V and until Philip II screwed things up, was a major source of income for the Habsburgs. I can't help wondering whether Ferdinand. Maximilian II etc. would have been more pragmatic.

 

[Tonifranz]

@Tonifranz: the majority of people in those situations that benefited from empire were the elites, and (if it existed) the middle class.

Galba Otho Vitelius specifically said the people living in the metropolis, rather than the metropolis itself.

Take the UK, for instance. Whilst the poor in the colonies laboured to extract/produce primary resources, the poor in the mother country laboured to turn said resources into manufactured goods.

The rich benefited. But so did the poor.

Let's take Rome, for example.

When the Republic took it's first major acquisition, Veii, it settled the landless poor on plots of land, giving them farms, and making their lives much better.

As it expanded throughout Italy, the Republic confiscated lands from it's defeated enemies, and a lot of those lands were given to landless citizens in Rome as farms. Why? Because only those who owned land could become soldiers, and to settle them on land was to expand the base of recruitment.

And also, as it expanded, they founded lots of colonies to hold the new territories. Who populated the new colonies? The poor who would have nothing to lose from leaving Rome. Colonies were founded all throughout the Republic, giving the landless plots of land to farm, making their lives better.

From what I read, even though the second century BC witnessed the rise of latifundia and the decline of small landowners in Italy, small farms in Italy actually expanded during the 1st century B.C.

The reforms of the Gracchi actually did give lands to landless peasants, even though the Gracchi themselves were killed.

But more importantly...

Marius settled his landless veterans of plots of lands in Italy.

Sulla settled his landless veterans in plots of lands in Italy.

Pompey settled his veterans in Italy too.

So did Caesar. And Antony. And Augustus.

And you must remember that Augustus settled about 30 legions after Actium.

Where did the lands came from to give to these landless soldiers?

From the Ager Publicus.

But also from the confiscated estates of those who lost and those who supported the losing side. Or because their lands were just outright confiscated like the estate of Horace for the settling of demobilized soldiers after the Perusian War.

After taking Egypt, Augustus simply used Egypt's wealth to buy lot's of estates in Italy and settled tens of thousands of veterans of individual plots of land.

So yeah, a kind of land reform happened in the first century, in that the estates of the losing sides were given to landless men, aka soldiers who served in the armies. And it didn't even require being soldiers of the winning side. Octavian even settled the soldiers of Antony's armies after Actium.

Now in Rome itself, grain became cheap and subsidized, then became free. Who benefited? The poor in Rome who received it. Who paid for the free grain? The provinces.

During the empire itself, the plebians in Rome gained many benefits, from a fire brigade, cleaner water from aqueducts, a better diet from importation of foods, free entertainment, free baths, also free grain, free meat, free olive oil. All possible because of Rome's empire.

Then there is the alimenta, a welfare program that helped orphans and poor children throughout Italy. It provided general funds, as well as food and subsidized education. The program was supported initially out of Dacian War booty, and then later by a combination of estate taxes and philanthropy. In general terms, the scheme functioned by means of mortgages on Italian farms (fundi), through which registered landowners received a lump sum from the imperial treasure, being in return expected to pay yearly a given proportion of the loan to the maintenance of an alimentary fund.

Now are you going to tell me that poor people in Rome did not benefit from empire?

 

[wcv215]

Please elaborate on this.

It wasn't just the American gold and silver that did it. The money that flowed in from that was actually a fraction of Spain's overall income. Far more damaging was their horrible taxation system. Due to the way Spain was set up the only place that could really be effectively taxed was Castille. Spain's growing Imperial commitments meant it constantly needed more money to support its efforts, and those taxes all, or almost all fell on Castille. Castille was the richest area of Spain of coruse, but the taxes basically destroyed it economically. Meanwhile the lack of investment in Spain itself as money was drained to other parts of Europe meant that as inflation hit from the increased amounts of specie meant Spain was becoming poorer relative to Europe vs say the Netherlands or England.

It also didn't help that most of the silver ended up in China.

 

[Autocrat]

Spain would not have been better off without its American empire. It would have been better off without its German empire. The Hapsburg empire forced Spain into a series of costly wars that bankrupted the nation and not even the Americas and the Netherlands could pay for. If Miguel de Paz lives and united Portugal, Aragon, and Castille, then Spain will be much better off. It will have a much larger American income and that income will go towards more limited and wise initiatives then all the grandiose projects of the Hapsburgs.

 

[Soulbound]

Spain would not have been better off without its American empire. It would have been better off without its German empire. The Hapsburg empire forced Spain into a series of costly wars that bankrupted the nation and not even the Americas and the Netherlands could pay for. If Miguel de Paz lives and united Portugal, Aragon, and Castille, then Spain will be much better off. It will have a much larger American income and that income will go towards more limited and wise initiatives then all the grandiose projects of the Hapsburgs.

indeed spain has made MANY stupid decisions, if those where just cut out i can actually even see the american colonies thou not necessarily any other ones STAYING in the empire,
Portugal however would likely still lose south africa no matter what unless spain and portugal united but then the colonies at that point might actually be causing more harm just by have SOOOOOOOO much american territory

 

[Mike]

If 500 years later today is an acceptable long-term duration, then I would say yes because of geopolitics. The establishment of these colonies has made Spanish an important international language today. This has indirectly benefited Spain because of common origin affinity, trade links and first language advantage. This would grow even more important once Latin America gets its act together and transitions into a First World region which will benefit Spain even more in the future as the hispanophone world would increase in clout. I wouldn't be surprised if Spanish would soon become the equal to English as the two most prestigious languages in the world.

The same argument can be made for Portugal once the behemoth of South America, Brazil, grows more important once it sorts out its corruption issues. The lusophone world would get more clout as the result of this. I don't think Portuguese would become the equal of English but it will be much more important than today which can only benefit Portugal.

 

[wcv215]

Spain would not have been better off without its American empire. It would have been better off without its German empire. The Hapsburg empire forced Spain into a series of costly wars that bankrupted the nation and not even the Americas and the Netherlands could pay for. If Miguel de Paz lives and united Portugal, Aragon, and Castille, then Spain will be much better off. It will have a much larger American income and that income will go towards more limited and wise initiatives then all the grandiose projects of the Hapsburgs.

As a sidenote, both would probably have been better off without the other. Without the Hapsburg behemoth to both the east and south France might have focused less on screwing over the Hapsburgs for so long, and in the process Europe could end up less devastated without constant wars to knock the Hapsburgs down a peg.