How Did The Decline Of The Spanish Empire

The Fall of the Spanish Empire The Spanish Empire experienced a time of massive growth and exploration which came to an end in 1588. By 1598 Phillip III had inherited Spain with a bankrupt economy. This marked the decline of the great empire that had controlled an extensive amount of territories. Its decline can be attributed to the massive influx of gold and silver into the economy during the Age of Exploration which made Spain temporarily wealthy but had irreversible negative long term economic effects. Originally, this plethora of gold and silver helped fund Spain's bureaucracy, military, and the constant wars in Europe. It is clear that “Spanish society had become addicted to the influx of American treasure”(Flynn 139). In addition, this
affected the economy in many ways including, inflation and taxes. The Spanish empire collapsed due to economic failures, population growth, war, and disease which all led to a declining economic market and poor political governance.

Spain extended throughout the globe, indicated by red, while Portugal also spread, indicated by blue. Inflation was a primary economic issue for the Spanish after they had taken tons of silver and gold from the Aztecs and Incas. The excess amount of gold and silver lowered the value these two metals had in the economy, therefor making things cost more due to inflation. The need for gold and silver led to conflict between the natives such as “silver mining which intensified warfare among Native American societies” (Sandberg). Some major conquistadors which brought massive amounts of gold are Francisco Pizarro and Hernan Cortes led the expeditions and brought wealth to the Spanish crown. In Cortes letter to Charles V, he said he found “gold, silver, precious stones, and feathers; the gold and silver being wrought so naturally as not to be surpassed by any smith in the world” (Cortes). Inflation is the decline in the value of money. This typically coincides with an increase in prices for products and services. The image below shows the impact of wheat prices increasing with the Age of Exploration which began with Columbus.

This image is a representation of the price level rising due to increased wealth from gold and silver. In addition to increased inflation, taxes also skyrocketed. Taxes hit the lower class the hardest and it is estimated that taxes increase by 430 percent from 1559 through 1598. It was the peasants and the lower class who had to pay for the majority of taxes because the nobility were exempt. As you can see, this is ironic because the lower class barely had any money yet they were being hit the hardest with taxes that was just hurting the Spanish economy. It is also a double edged sword because taxes were raised by about 430 percent yet the average minimum wage was only increased by 80 percent. It is evident that this system where the lower class pay for taxes, but aren't getting the money to begin with is unsustainable for a world power of Spains magnitude.
This image indicates how much revenue was made in comparison to how much it was producing. Clearly this would lead to debt.

The population growth from 1530s to 1580s also proved to detrimental to the Spanish economy. Originally, Philip II felt that this was beneficial because there were more farmers who were farming and growing crops. Furthermore, much of Spains land is infertile for the exception of the land by the Mediterranean Sea. This land was not used or farmed due to the fear of pirates pillaging the land. However, even with more farmers, the yield of food and other products such as wheat remained the same. This led to a high demand in wheat and other grains which caused Spain to import wheat from other countries. The dependency on imports led to debt within the Spanish economy. By 1580, Spain was relying on imports of wheat to sustain the population. The Spanish Armada was built between 1586 through 1588 under Philip II.
There were tensions between Philip II and Elizabeth I of England. After the death of Mary I of England, relations between these two empires started to decline with the reign of Elizabeth I. Religion was a major cause to the tensions between these two nations. Philip II promoted Catholicism and so did Mary I who used harsh tactics in trying to make England a Catholic country. When Elizabeth I took power she ignored what Mary I had done and promoted the Anglican Church and Protestantism. Elizabeth I made it mandatory to engage with the Anglican Church and further ruined relations with Spain. Spain began end its positive relations with England because of their different religions. There were three primary reasons for the creation of the Spanish Armada. The first is because of the English pirates who had the consent of the queen to steal and pillage Spanish ships for gold and silver. Furthermore, England had set strict rules for practicing Catholics, which upset Spain. It was a serious crime to be Catholic in England and people were often imprisoned. Lastly, England had supported many of the enemies that Spain had fought so hard to convert such as the Dutch. The Treaty of Nonsuch declared that England would aid the Dutch in a battle against
Spain. Philip II was not a beneficial king for Spain because he “frittered away the immense material resources of his kingdoms in the pursuit of aims(both religious and dynastic) that had little to do with viable management of his empire, and this, rather than a lack of resources, explains the Spanish failure” (Tenace 855).
The Spanish were successful in colonizing many territories because of “Spain's political preeminence during the sixteenth and early seventeenth centuries was, in large measure, the result of its military preeminence” (Dupuy). The Spanish Armada had a profoundly negative effect on the Spanish economy. The total cost to build the Spanish Armada was 10 million ducats, but was expected to have only cost 3.5 million ducats. Ducats is the currency in most European countries. By 1595 Philip II was spending more that 12 million ducats a year to maintain the Armada. The cost to build the Spanish Armada came in the form of taxes and loans. The millones tax was created to "make 8 million ducats in 6 years" (Carter). Nevertheless, these taxes always came from the lower class which created a problem. Spain finally came to its knees in 1596 when the bubonic plague hit the people of Spain. The Spanish Plague of 1596 killed more half a million people and continued to kill for seven years. The Spanish Plague was the last straw in Spain's
demise.

The Image above is the Spanish Armada sailing for England to battle. Spain sailed with 160 ships. The Spanish Empire was a resilient empire which, had lasted for centuries and flourished. The Spanish empire collapsed due to economic failures, population growth, war, and disease which all led to a declining economic market and poor political governance. All together, these factors were a recipe for disaster, to cripple the economy and force the empire to fall. Important relations with other empires were destroyed during this time, such as the relationship Spain had with England prior to Elizabeth I.

Overall Conclusion Spain's reach extended from Central America, South America, and the Caribbean which influenced people from all cultures. Many civilizations fell to the Spanish conquistadors such as the Aztec and Inca. These were great empires of their own who were defeated by the Spanish. These civilizations were exploited for their gold and silver, which provided new wealth for many conquistadors. Along with the economic problems facing Spain, England had begun to separate itself from Spain in an effort to defeat the Spanish. Queen Elizabeth I was the monarch who broke all relations with Spain, which caused tension between these two empires. War is never cheap, and the war with the English caused the Spanish economy to collapse along with other factors.