Silver, Trade, and War: Spain and America in the Making of Early Modern Europe (review)

This sweeping study of the impact of American silver on European socioeconomic development and overseas expansion is an outgrowth of the authors' pioneering synthetic work, The Colonial Heritage of Latin America: Essays in Economic Dependence in Perspective (1970). The Steins asserted in this earlier book that by 1492 Spain and Portugal were already dependencies of northern Europe's more developed economic powers. Their current book provides empirical data to explain this process. According to the Steins, Spain's access to American silver buttressed Habsburg aspirations to hegemony in Europe, while the weaknesses of the peninsular economy allowed pragmatic French, Dutch, and particularly English merchants to gain access to enormous amounts of this wealth by contraband trading and by providing capital to Andalusian merchants trading legally through Seville and later Cadiz. Efforts by imperial reformers to curb Spain's enemies in the Caribbean, regain control over the American trade, and modernize the country ultimately failed by the mid-eighteenth century. Despite producing a fascinating and seductive tale--American silver produced both the rise of Northern European capitalism and Spanish decline--the authors would have greatly strengthened their argument by integrating the findings of more recent literature on this subject and by utilizing some rich documentary sources in Seville.

From the outset of Spanish overseas expansion, weaknesses in the peninsular economy forced the merchants' guild (consulado) in Seville (and later Cadiz) to ship foreign manufactured goods to the Indies in exchange for American silver. Between the Treaties of Westphalia in 1645 (ending the Thirty Years War) and the Treaty of Utrecht in 1714 (at the close of the War of Spanish Succession) however, powerful French, Dutch, and English merchant houses gained a series of commercial concessions from Spain that allowed them to dominate the silver trade. In addition, Madrid was ultimately forced to recognize her enemies' rights to Caribbean bases--Curaçao (Dutch), Jamaica (English), and later Saint Dominique (French)--which served as centers for contraband commerce to the Spanish Indies. These unequal treaties and a corrupt royal bureaucracy effectively allowed Spain to maintain legal control over the American trade, while giving foreign powers the ability to drain away colonial silver that fueled commercial capitalism in Northern Europe. Meanwhile, Spain languished economically and politically, culminating in the disastrous War of Spanish Succession. Although the Bourbon, Philip of Anjou, successfully gained the throne and reestablished Spain's tenuous hold over its rich New World possessions, the price tag was high--granting the English the right to supply slaves to the colonies, which they used to advance their share of economic control over the American trade.

In the second part of the book, the Steins examine the efforts of Spanish reformers to forge a strong absolutist state (modeled on the ideas of the French minister, Jean Bautiste Colbert) in order to stem this dangerous foreign control over the trade in American silver. These reformers, called the proyectistas, men such as Macanaz, Ustariz, Campillo, Ulloa, Legarra, and Gandara, tried to create an effective mercantilist regime capable of allowing Spain to compete more successfully in international commerce. The failure of the proyectistas became clear, however, with the downfall of their patron, the Marqúes de Ensenada, in 1754. His relatively "moderate" efforts to reform state finances, promote bureaucratic innovations, and impose commercial controls were checked at every turn by the corrupt Lower Andalusian bureaucracy, the entrenched merchant community (centered on the Cadiz consulado), and their powerful foreign allies.

Despite providing a bold, revisionist view of the impact of war, silver, and trade in the Atlantic World, this study would have benefited from weighing the findings of some more recent scholarship and utilizing archival documentation from Seville. The authors too often labor to prove points already covered in several important published works (which are...