Seventeenth Century Spain: Demographic and Economic Collapse
Social and Economic Crisis of the Seventeenth Century
The Demographic Crisis
The seventeenth century experienced a deep recession that characterized general demographic decline across Europe, but it was particularly serious in the realms of Spain. The population registered a major setback, falling from approximately 8 million inhabitants in 1600 to 7 million in 1700. Causes included significant migration flows to the New World, war casualties, the expulsion of the Moors, and devastating plagues and epidemics that ravaged the country between 1601 and 1685.
The Economic Crisis
In the economic field, agriculture worsened its already precarious situation. Famine, war, and epidemics caused depopulation and an increase in both taxes and land abandonment. Many farmers left the land to move to cities to live as vagrants or beggars. Livestock also saw a reduction due to increased dryness of pastures and destruction caused by many peninsular wars.
Industry and trade also suffered a deep decrease. This was due to competition from foreign products and the low purchasing capacity of the ruined population. However, the phenomenon that most seriously affected the economy was the declining American demand for Spanish goods, as those territories were now more capable of sourcing their own products.
The deterioration of public finances resulted from increased court costs and continuing wars. The situation was aggravated by the dramatic depletion of the arrival of American gold and silver, the main source of public funding.
Neither taxes nor constant currency devaluations could save the Crown, which filed for bankruptcy on several occasions.
Social Problems
The serious economic situation was reflected in the tremendous flow of wealth from America during the sixteenth century. Activities that stimulated productivity had to support the imperial monarchy's model and consolidate a social structure where the nobility in the capital engaged in buying land, houses, or luxury spending.
Faced with this privileged few, there existed a huge mass of impoverished peasants who lost their land, artisans ruined by foreign competition, and nobles who could scarcely survive. Many landsmen were reduced to begging or could barely subsist. The only sectors that remained dignified were those involved in productive work. Therefore, the social model aspired to by the vast majority was one of unearned income or getting rich in America.
Work was considered something common and without prestige. Only the margins of the Crown of Aragon, especially, suffered less from the crisis, due to less fiscal pressure and a more stable currency, which redirected their production and trade toward the creation of commercial companies and the development, especially, of textile manufacturing.