18th Century Spanish Economy: Agriculture, Industry, and Trade

Economy in 18th Century Spain

Agriculture

Agriculture was the key economic sector, employing the vast majority of the population and providing almost all income. It was characterized by technical backwardness, the dominance of dry farming, and the prevalence of the Mediterranean trilogy. Cattle damaged farmland, leading to conflicts between farmers and the Mesta.

Frequent subsistence crises occurred, with poor harvests causing price increases, market shortages, and widespread hunger.

The backwardness of agriculture was related to land ownership, a legacy of the feudal system. Landowners were a minority, while the majority of peasants worked land that was not their own.

Land was often linked, meaning owners could not sell, donate, or freely bequeath it. Land was concentrated in the hands of the Church, the Nobility (through primogeniture), municipalities, the Crown, Military Orders, and a smaller proportion of farmers. This resulted in no land market.

The 18th century saw rising tensions due to agricultural problems, including peasant protests against rising leases, the need to plow uncultivated land, disputes over Mesta privileges, arable land shortages, and rising agricultural prices, especially for wheat.

Industry

Artisanal production was scattered across small cities, with workshops and unions using small and outdated technology. Enlightenment thinkers fought against the unions' control. In the second half of the 18th century, guilds' control over industrial production was eliminated, removing a significant obstacle to modernization.

Population growth increased demand for handmade products, but low farm income hindered industrial take-off.

In the first half of the 18th century, attempts were made to adapt the French model of manufacturing in Spain. Reales Fábricas (Royal Factories) existed with technical and financial government control. Some individuals were interested in the "manufacturing" model to escape union control, such as Juan de Goyeneche in New Baztán (brandy, silk, chamois) and the commercial bourgeoisie with Indian textiles.

Trade

To encourage trade and industry, mercantilist guidelines were followed. Mercantilism aimed to strengthen the state by creating wealth through a positive trade balance, encouraging domestic industries to avoid imports, and promoting exports to prevent the outflow of precious metals.

Internal trade was limited due to excessive barriers, including internal customs, tolls, strong local consumption, and an old, expensive, and dangerous road network.

Foreign trade experienced significant progress, largely due to the abolition of the House of Trade's monopoly. Freedom of Commerce was established in 1765 and 1778. Chartered companies were created to promote trade with America.