The Decline of Absolutist Spain in the Seventeenth Century

At the beginning of the seventeenth century, France’s position appeared extremely weak. Struggling to recover from decades of religious civil war that had destroyed its infrastructure and economy, France could not dare to compete with Spain’s European and overseas empire or its mighty military. Yet by the end of the century their positions were reversed, and France had surpassed all expectations to attain European dominance.

By the early seventeenth century the seeds of Spanish disaster were sprouting. Between 1610 and 1650 Spanish trade with the colonies in the New World fell 60 percent due to competition from local industries in the colonies and from Dutch and English traders. At the same time, the native Indian and African slaves who toiled in the South American silver mines suffered frightful epidemics of disease. Ultimately, the mines that filled the empire’s treasury started to run dry, and the quantity of metal produced steadily declined after 1620.

In Madrid, however, royal expenditures constantly exceeded income. To meet mountainous state debt, the Crown repeatedly devalued the coinage and declared bankruptcy, which resulted in the collapse of national credit. Meanwhile, manufacturing and commerce shrank. In contrast to the other countries of western Europe, Spain had a tiny middle class. The elite condemned moneymaking as vulgar and undignified. Thousands entered economically unproductive professions: there were said to be nine thousand monasteries in the province of Castile alone. To make matters worse, the Crown expelled some three hundred thousand Moriscos, or former Muslims, in 1609, significantly reducing the pool of skilled workers and merchants. Those working in the textile industry were forced out of business by steep inflation that pushed their production costs to the point where they could not compete in colonial and international markets.6

Spanish aristocrats, attempting to maintain an extravagant lifestyle they could no longer afford, increased the rents on their estates. High rents and heavy taxes in turn drove the peasants from the land, leading to a decline in agricultural productivity. In cities wages and production stagnated. Spain also ignored new scientific methods that might have improved agricultural or manufacturing techniques because they came from the heretical nations of Holland and England.

The Spanish crown had no solutions to these dire problems. Philip III (r. 1598–1621), a melancholy and deeply pious man, handed the running of the government over to the duke of Lerma, who used it to advance his personal and familial wealth. Philip IV (r. 1621–1665) left the management of his several kingdoms to Gaspar de Guzmán, Count-Duke of Olivares. Olivares was an able administrator who has often been compared to Richelieu. He did not lack energy and ideas, and he succeeded in devising new sources of revenue. But he clung to the grandiose belief that the solution to Spain’s difficulties rested in a return to the imperial tradition of the sixteenth century. Unfortunately, the imperial tradition demanded the revival of war with the Dutch at the expiration of a twelve-year truce in 1622 and a long war with France over Mantua (1628–1659). Spain thus became embroiled in the Thirty Years’ War. These conflicts, on top of an empty treasury, brought disaster.

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Spanish Troops The long wars that Spain fought over Dutch independence, in support of Habsburg interests in Germany, and against France left the country militarily exhausted and financially drained by the mid-seventeenth century. In this detail from a painting by Peeter Snayers, Spanish troops — thin, emaciated, and probably unpaid — straggle away from battle. (Prado, Madrid, Spain/Index/The Bridgeman Art Library)

Spain’s situation worsened with internal conflicts and fresh military defeats through the remainder of the seventeenth century. In 1640 Spain faced serious revolts in Catalonia and Portugal. In 1643 the French inflicted a crushing defeat on a Spanish army at Rocroi in what is now Belgium. By the Treaty of the Pyrenees of 1659, which ended the French-Spanish conflict, Spain was compelled to surrender extensive territories to France. In 1688 the Spanish crown reluctantly recognized the independence of Portugal, almost a century after the two crowns were joined. The era of Spanish dominance in Europe had ended.