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  • Silver, Trade, and War: Spain and America in the Making of Early Modern Europe
  • Kendall W. Brown
Silver, Trade, and War: Spain and America in the Making of Early Modern Europe. By Stanley J. Stein and Barbara H. Stein (Baltimore, Johns Hopkins University Press, 2000) 351 pp. $49.95

Three decades ago, the Steins began The Colonial Heritage of Latin America (New York, 1970) with the pronouncement, "In 1492 Spain and Portugal were economic dependencies of Europe" (4). Now they have rescinded that judgment. In Silver, Trade, and War, they analyze how Spain became economically backward, largely due to the unforeseen consequences of New World silver. The authors show that the pattern established in Spain's late medieval wool trade with Bruges served as the economic model for the Spanish Habsburgs' overseas empire: Colonial commerce was monopolistic, controlled by the merchant guild of Sevilla, which was supplied and financed by foreign interests. Spain's imperial policy was bullionist, not surprising given the rich American silver mines in Mexico and Peru, and pseudomercantilist, pursuing state fiscal goals rather than economic development. The silver produced little economic growth in Spain because the monarchy wasted its share in a vain attempt to preserve Catholic and Habsburg hegemony in Europe, and Spaniards remained satisfied to purchase manufactures from abroad rather than developing domestic industries. None of this is particularly original, but the authors provide an admirable synthesis that will reward readers interested in early modern economic history.

Most original in the Habsburg section is the authors' analysis of the commercial treaties that Spain signed with its European rivals, following the Thirty Years' War. These treaties enabled the Dutch, the French, and eventually the English to establish legal enclaves in Sevilla and Cádiz, to the profit of foreign manufacturers and merchants, the Andalusian merchant guild (consulado), and the Spanish Crown, but to the detriment of Spanish economic development. Meanwhile, foreigners occupied islands in the Caribbean, which became bases for rampant smuggling into the Spanish colonies. By 1700, Spain's rivals largely controlled its imperial commerce, and soon thereafter, the new dynasty, the Spanish Bourbons, felt their colonies threatened by growing British naval power. [End Page 473]

The remainder of the book focuses on critiques and proposals advocated by Spanish political economists (proyectistas) during the first half of the eighteenth century to remedy the empire's malaise. Critics of "the involuting Spanish state, society and economy," such as Bernardo Ulloa, José del Campillo y Cosío, and Gerónimo de Uztáriz, proposed partial solutions (263). Melchor de Macanaz and Cenon de Somodevilla, marquis of the Ensenada, offered the only theories that effectively challenged the Habsburg legacy. Macanaz criticized Spaniards' dependence on silver mining and land monopolization that condemned most of the colonial population to poverty. He urged reforms that would turn the colonial lower classes into consumers of Spanish manufactures, thereby stimulating growth in the peninsula. As royal minister at mid-century, Ensenada tried to implement French-style, pro-growth mercantilism but was defeated by the merchants and bureaucrats who benefited from the status quo. When Charles III came to power in 1759, he inherited a "situation crying for change yet making change itself impossible" (258).

More a history of political economy than economic history, the book nonetheless offers valuable insights into Spain's imperial economy. Although the Steins draw on Spanish, Mexican, and French archival materials, theirs is chiefly a synthetic work that skillfully interprets the proyectistas' published and manuscript writings and a broad range of secondary sources dealing with the Spanish empire and the roots of the modern European economy. The Steins offer a convincing analysis of silver's failure to develop the Spanish economy. Although they draw a sharp contrast between Spain's economic and fiscal policies and those of its European rivals, they say little about the factors required for economic modernization. One also wonders whether French mercantilism was really the economic panacea that some proyectistas (and the Steins also) believed. Be that as it may, the book clarifies the impediments to modernization that made reform of the imperial economy so difficult for the Spanish Bourbons. [End Page 474]

Kendall W. Brown
Brigham Young University

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