Western History 106 : How and why did Spain decline?

The Spanish Empire reached its zenith in 1571 following the defeat of the Ottoman Empire at Lepanto. Spanish colonies were present in the Americas, the Philippines, Africa and the Pacific. The Hapsburg Monarchy in Spain also enjoyed domination in Italy (particularly Sicily and Naples) as well as the Low Countries. In 1580 Philip II (r.1556-1598), the Spanish king, became the sovereign for Portugal extending his domain into Spain’s Iberian neighbor via the apparatus of the Council of Portugal.

Spanish rule in the Americas though would prove fatal for the local population, with death tolls from imported diseases playing a huge role in the death of 70 million people in the New World (over eighty percent of the pre-contact population by some estimates). Source: (Naimark, Norman (2016). Genocide: A World History. p. 35).

However as the seventeenth century approached, Spain was less able to hang on to her territory in North America and the Caribbean as a result of fierce competition from the English, French and Dutch. In particular Spain struggled to meet the demands of the Indies for consumer goods with merchants from the rival European trading powers moving in to fill the shortfall.

Spain was forced to defend her Empire as English pirates plundered Spanish merchant ships. In 1588 the defeat of the Spanish Armada turned the naval balance equation in favour of Elizabeth’s England.

Philip III (r. 1598-1621) tried to stave off decline but the Castilian Plague of 1596-1602 greatly decimated the population of the heartland. In 1607 Spain moved toward bankruptcy as she struggled in a bitter war with the United Provinces (largely the modern day Netherlands).

The situation worsened to some extent under Philip IV (r. 1621-1655) although the capable Count-Duke of Olivares worked to reform the system and pacify the Dutch. In 1627 however the Castilian economy collapsed. The currency had been debased for some time and inflation continued to eat away at overall wealth. Parts of the country resorted to a barter economy.

In 1640 Portugal was lost to the Spanish, and in the 1650s Spain suffered several military defeats at the hands of the French culminating in the Treaty of the Pyrenees, a document that reaffirmed the new domination of France.

Meanwhile plague continued to weaken Spain. Between 1647-52, 25% of Seville would succumb to disease with some historians pegging total plague losses in Spain to 1.25 million or one-eighth of its base population.  Deaths

Later reforms built around  mercantilism policies failed to take hold. Elite mining companies dominated the critical silver mining markets with corruption at several levels including royalist interference in market pricing creating many inefficiencies. There were a few minor revivals but by the dawn of the eighteenth century as Spain transitioned to a Bourbon monarchy, Spain had fallen well behind both the English and the French in the continental hierarchy of power.

                                                              Spanish Empire 16th century 
                                              Source: https://gohighbrow.com/the-spanish-empire/