The Formation of Modern Spain: Economy and Monarchy in the 15th Century

Europe in the Fifteenth Century

Population and Economic Growth

The disappearance of the great epidemics of the previous century (such as the Black Death) and the recovery of crop fields allowed for a significant increase in population.

Increased demand drove manufacturing productivity, which grew gradually. Farm output also expanded.

Sea routes in the Mediterranean Sea, the Baltic, and the North Sea revitalized trade. The expansion of commerce resulted in the increase of craft production and the growth of cities that served as commercial centers and major ports.

The Rise of the Bourgeoisie

The growth of trade and manufacturing activities generated great profits for the bourgeoisie.

The economic power of the bourgeoisie was not based on land ownership, as was the case with the nobility, but rather on the possession of capital, which they invested in productive activities. Thus emerged the first capitalists and the beginnings of what is called commercial capitalism, developing primarily in cities linked to maritime trade routes.

The Catholic Monarchs

The Union of Castile and Aragon

Ferdinand, son and heir of John II, King of Aragon, married Isabella, sister of Henry IV of Castile.

Upon the death of his father, Ferdinand became King of Aragon (1479). Queen Isabella secured the throne of Castile the same year.

This marriage joined Aragon and Castile in a dynastic union.

Territorial Expansion

The Catholic Monarchs sought to unite the peninsular territories and achieved this through the following actions:

• After a war that lasted 10 years, they conquered the Nasrid Kingdom of Granada, the last Muslim stronghold on the peninsula (1492).
• The Kingdom of Navarre, which had allied with France, was invaded by a Castilian army. It was finally incorporated into Castile, but conserving its laws and institutions.
• The Catholic Monarchs developed a policy of intermarriage with Portugal. Two of their daughters married the Portuguese monarch. This policy paid off when Philip II later inherited the Kingdom of Portugal and incorporated it into the Crown (1580).

Foreign Policy

The Catholic Monarchs directed their foreign policy in two main directions:

1. The Mediterranean Area: They continued the traditional intervention of the Crown of Aragon in the Mediterranean. In this direction, they conquered the Kingdom of Naples, which covered all of Southern Italy. They also addressed various places in North Africa to stop the Barbary pirates.
2. The Atlantic: The second direction was oriented towards the Atlantic, laying the foundations for the future Castilian empire.