The 17th Century Spanish Demographic and Economic Crisis

The 17th Century Demographic Crisis

In the first half of the seventeenth century, a demographic crisis occurred, as the population dropped from 8 to 7 million. The causes were:

• The Plague: Bloody outbreaks that coincided with food crises, including bad harvests, famine, and hunger.
• Expulsion of the Moors (1609): This accounted for 3% of the population.
• Economic Difficulties: Factors that increased migration to America, reduced the number of marriages, and increased the number of religious figures.

The Financial Crisis of the Crown

The real problem of finance: The indebtedness of the royal treasury was caused by continual wars, worsened by the decline in the arrival of precious metals from America. During the seventeenth century, there were six bankruptcies. The Crown was unable to pay its creditors, who renegotiated the debt by adding new interest, which further increased indebtedness.

To solve the problem, the Crown sought new sources of income, such as monetary disturbances:

• Coinage: Mixing silver with copper caused rampant inflation due to the weak purchasing power of the new coins, which disrupted the entire economy of the country.
• Sale of public offices and peerages.

Economic Sector Recession

The recession was reflected in different economic sectors:

• Agriculture: A drop in production, especially due to the decline in population.
• Livestock: A crisis in the bovine industry.
• Industry: Castilian textile competition from foreign markets.
• Trade: American trade was monopolized by foreigners.

Late 17th Century Recovery

In the late seventeenth century (around 1680), some recovery was seen in three aspects:

• A higher birth rate, particularly in coastal areas.
• A recovery in commerce.
• Economic policy measures: The devaluation of coins in 1680 (reduced in value by 75%), which brought the legal value of the currency closer to its actual value, slowing inflation and stabilizing the monetary system.

Implications of the Crisis

The crisis reverberated throughout society. The Spanish estate society underwent a process of polarization marked by:

• The impoverishment of the peasantry, which constituted the major part of the population.
• A weak bourgeoisie and the poor.
• The existence of a social mentality that prevailed in the contempt for work and trade.
• The numerical growth of unproductive social groups: nobility, clergy, and marginalized individuals (rogues and beggars).