Spanish Empire - The Spanish Habsburgs: The Sun Never Sets (1516–1700)

The Spanish Habsburgs: The Sun Never Sets (1516–1700)

The 16th and 17th centuries are sometimes called "the Golden Age of Spain" (in Spanish, Siglo de Oro). As a result of the marriage politics of the Reyes Católicos, their Habsburg grandson Charles inherited the Castilian empire in America, the Aragonese Empire in the Mediterranean (including a large portion of modern Italy), lands in Germany, the Low Countries, Franche-Comté, and Austria (this one, along with the rest of hereditary Habsburg domains was almost immediately transferred to Ferdinand, the Emperor's brother).

While not directly an inheritance, Charles was elected emperor of the Holy Roman Empire after the death of his grandfather Emperor Maximilian thanks to prodigious bribes paid the prince-electors. Charles became the most powerful man in Europe, his rule stretching over an empire in Europe unrivalled in extent until the Napoleonic era. It was often said during this time that it was the empire on which the sun never set. This sprawling overseas empire of the Spanish Golden Age was controlled, not from inland Valladolid, but from Seville.

The Castilian Empire abroad was initially a disappointment. It did stimulate some trade and industry, but the trading opportunities encountered were limited. Matters began to change in the 1520s with the large-scale extraction of silver from the rich deposits of Mexico's Guanajuato region, but it was the opening of the silver mines in Mexico's Zacatecas and Bolivia's Potosí in 1546 that became legendary. During the 16th century, Spain held the equivalent of US$1.5 trillion (1990 terms) in gold and silver received from New Spain. Ultimately, however, these imports diverted investment away from other forms of industry and contributed to inflation in Spain in the last decades of the 16th century: "I learnt a proverb here", said a French traveler in 1603: "Everything is dear in Spain except silver". This situation was aggravated by the loss of much of the commercial and artisan classes with the expulsions of the Jews (1492) and Moriscos (1609). The vast imports of silver ultimately made Spain overly dependent on foreign sources of raw materials and manufactured goods.

The wealthy preferred to invest their fortunes in public debt (juros), which were backed by these silver imports, rather than in production of manufactures and the improvement of agriculture. This helped perpetuate the medieval aristocratic prejudice that saw manual work as dishonorable long after this attitude had started to decline in other west European countries. The silver and gold whose circulation helped facilitate the economic and social revolutions in the Low Countries, France and England and other parts of Europe helped stifle them in Spain. The problems caused by inflation were discussed by scholars at the School of Salamanca and arbitristas but they had no impact on the Habsburg government.

The Habsburg dynasty spent the Castilian and American riches in wars across Europe on behalf of Habsburg interests, defaulted on their debt several times, and left Spain bankrupt several times. These problems led to a number of revolts across his empire, notably that of Castilian rebels in the Revolt of the Comuneros, but these rebellions were put down.

The Habsburgs' political goals were several:

• Access to the resources of the Americas (gold, silver, sugar) and products of Asia (porcelain, spices, silk)

• Undermining the power of France and containing it in its eastern borders.

• Maintaining Catholic Habsburg hegemony in Germany, defending Catholicism against the Protestant Reformation. Charles attempted to quell the Reformation at the Diet of Worms but Martin Luther refused to recant his 'heresy.' However, Charles's piety could not stop his mutinying troops from plundering the Holy See in the Sacco di Roma.

• Defending Europe against Islam, notably the Ottoman Empire.

• To spread religion to the unconverted souls of the new world. With conflict between Catholics and Protestants raging in Europe, the new world was an ideal place for more Catholics to be recruited.