17th Century Spain: Economic Crisis and the Golden Age

Economic and Social Decline in 17th Century Spain

From the late sixteenth century, the Spanish economy entered a long phase of decline. Strong inflation, caused by the massive arrival of American precious metals, led to the deterioration of the Spanish production structure. This, combined with the depletion of productive land and climate change, triggered the emergence of intensive epidemics in the early seventeenth century. These factors caused a significant population decline, exacerbated by the expulsion of the Moors, emigration to America, and the losses caused by wars. The Spanish population dropped from over 10 million in 1600 to 7.5 million in 1700.

The crisis resulted in a relative ruralization of the economy and the loss of economic and political power for the middle classes. Conversely, the nobility gained positions of power within the state structure (notably through the validos or royal favorites) and increased pressure on rural manors and their subjects—a process known as refeudalization. This led to an increase in the number of poor and beggars, as well as a rise in crime and banditry. The crisis finally subsided in the late seventeenth century when a balance between population and resources was restored.

Mentality and Culture During the Spanish Golden Age

The cultural splendor initiated in Habsburg Spain persisted throughout much of the seventeenth century, defining the so-called Golden Age. Following the conclusion of the Council of Trent, most cultural expressions had to adhere to the doctrinal standards of the Counter-Reformation. Catholic orthodoxy profoundly shaped Spanish thought and daily life, which was steeped in social values like honor and reputation, as well as ethnic and religious prejudices that led to the expulsion of the Moors in 1609.

Consequently, the Inquisition and an obsession with "purity of blood" became core identity markers of Spanish society at that time. The population remained primarily illiterate; their education came from the Church, tradition (condensed in proverbs), and popular entertainment, with theater being one of the most vital cultural forms during the Golden Age. Access to culture was restricted to the affluent sectors of the cities: the bourgeoisie, the clergy, and the nobility.

In universities, the Church's dominance was absolute, with teaching centered on the primacy of theology and outdated theories such as geocentrism. The isolation of Spanish culture from the rest of Europe resulted in a significant scientific lag, reinforcing a culture that prioritized art over reason—a characteristic that persisted in Spanish culture until the 20th century.