Spain's Old Regime: Absolutism, Economic Challenges, and Reform

Bourbon Absolutism: Centralization of Power

The authoritarian monarchy of Asturias had already begun a process of power concentration in Castilla. However, in the Crown of Aragon, Navarre, and the Basque Country, their own institutions (such as the Cortes) and a degree of sovereignty had been preserved. Bourbon absolutism, established in France with Louis XIV, was imposed upon Spain. This absolute monarch constituted the very embodiment of the state: the territory belonged to him, and authority emanated from his institutions. He was the supreme head of government and justice. Monarchs were supported by loyal and competent advisors who fought against even the few constraints acting on the prerogatives of the Crown.

Weakness of Spanish Industry and Internal Trade

Under the Old Regime, handicrafts and commerce were subsidiary economic sectors to the traditional agrarian industry. The industrial world was organized by guilds, controlling production and the creation of new industries. This was a protectionist mode of production. Regarding trade, the domestic market was weak and sparse, limited to local, regional exchanges. There were serious transportation problems, and interior areas of the peninsula were isolated from the periphery. The most serious market problem was its subjection to the limits of an almost subsistence farming economy, where surpluses were minimal and barely sufficient for necessities. Only significant colonial trade sustained the market for more products.

Limits of Bourbon Reformism and Enlightenment Ideas

The enlightened despotism of Carlos III presented a positive outlook. Economic reforms were pushed, alongside proposals and projects for the advancement of public education, urban sanitation, and more. The state's prerogatives against the Church were defended, and subjects were encouraged to develop productive activities. However, attempts at land reform profoundly disrupted the power of the privileged classes. When Carlos IV ascended, he and his colleagues observed with great fear the effects that Enlightenment ideas had provoked in France, particularly the French Revolution.