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Geography is a powerful forcing shaping both history and economics. This is demonstrated in Spain, but also that cultural factors are also important. The most important economic sector in the ancient world was agriculture and thus a culture's wealth was primarily determined by geography. Modern wealth is more importantly shaped by the utilization of human resources and technology. In early periods geography was more important. And two factors affected the Iberian Peninsula, climate and location. Large areas of the Iberian Peninsula are not well watered. Thus in comparison to France and other areas of Europe, Spanish agriculture is less productive, however, mineral wealth is imprtant. Tin was particularly important. A trade in tin began during the Neolithic era. The Greeks and Carthaginians established colonies on the Iberian Peninsula. Many coastal cities like Barcelona were founded in this period. Rome seized control of Spain during the Punic Wars and remained a Roman colony until the fall of the Roman Empire. The mineral wealth continued to be great economic importance. Spain was almost overwhelmed by the Muslim invaders (8th century AD). Gradually the Christian kingdoms reasserted themselves and the Reconquista began. For centuries, Spain was the only place in Europe where Christians, Muslims, and Jews lived in relative harmony. And as a result of that toleration and resulting intellectual development, Spain during the Dark Ages was the most advanced and economically successful area of Europe. The modern values of toleration and diversity were not seen as a positive in the medieval era. And both Muslims and Christians vied for control of the Iberian Peninsula. The year 1492 was a turning point not only politically and culturally, but also economically. The Catholic monarchs Ferdinand and Isabella completed the Reconquista when they seized Granada. Once that was accomplished they approved Columbus' voyage. Here geography was again important as the Iberian Peninsula is the western-most promontory of Europe--key factors in the European maritime outreach. This led to the foundation of vast colonial empires. Unbelievable quantities of gold and silver bullion poured into Spain making it the richest both powerful country in Europe. Most of that wealth proved ephemeral. Rather than founding new industries like other countries as Europe entered the modern age, Spain purchased goods made abroad. Also in 1492, Spain expelled it Jews and thus lost some of its most productive citizens. The Inquisition established earlier was used to track down Jews who persisted in their faith as well as free thinking Christians. Shortly afterwards the Protestant Reformation began to reshape Europe. The Inquisition and Counter Reformation not only battled Protestantism, but also intellectual thought in general. The result was that as science began to emerge as a powerful European development, Spain did not participate and the country gradually declined to a poverty-stricken backwater. The Spanish Civil War and the Franco's victory had the impact of continuing Spain's isolation. Only with the death of Franco did the Spanish economy begin to enter the modern economic mainstream (1975). Spain and Portugal entered the European Union (1986).
Geography is a powerful forcing shaping both history and economics. This is demonstrated in Spain, but also that cultural factors are also important. The most important economic sector in the ancient world was agriculture and this a culture's wealth was primarily determined by geography. Modern wealth is more importantly shaped by the utilization of human resources and technology. In early periods geography was more important. And two factors affected the Iberian Peninsula, climate and location. Large areas of the Iberian Peninsula are not well watered. Thus in comparison to France and other areas of Europe, agriculture is less productive in Spain. however, mineral wealth was important.
Tin was particularly important in ancient times. A trade in tin began during the Neolithic era. The Greeks and Carthaginian established colonies on the Iberian Peninsula. Many coastal cities like Barcelona were founded in this period. Rome seized control of Spain during the Punic Wars and remaindered a Roman colony until the fall of the Roman Empire. The mineral wealth continued to be great economic importance.
Spain was almost overwhelmed by the Muslim invaders (8th century AD). Gradually the Christian kingdoms reasserted themselves and the Reconquista began. For centuries, Spain was the only place in Europe where Christians, Muslims, and Jews lived in relative harmony in comparison to the rest of Christian Europe. . And as a result of that toleration and resulting intellectual development, Spain during the Dark Ages was the most advanced and economically successful area of Europe. The modern values of rationale and diversity were not seen as a positive in the medieval era. And both Muslims and Christians vied for control of the Iberian Peninsula. The year 1492 was a turning point not only politically and culturally, but also economically. The Catholic monarchs Ferdinand and Isabella completed the Reconquista when they seized Granada. Once that was accomplished they financed Columbus' voyage west. .
Here geography was again important as the Iberian Peninsula is the western most promontory of Europe--key factors in the European maritime outreach. This led to the foundation of a vast colonial empires in the Americas a very little cost. In fact the small armies that conquered Mexico and Peru were small private armies that cost the Crown nothing. Unbelievable quantities of gold and silver bullion poured into Spain from making it the richest both powerful country in Europe.
Through most of human history, agriculture was the primary economic foundation and source of wealth. Here Spain was at a disadvantage to much of the rest of Europe. Large areas of Spain are arid and not very productive in contrast to France with its rich, well swattered farm lands. Few counties were as productive as France, but almost all were more productive than Spain. But this was not all of Spain's problems. Spain engaged in large numbers of wars with various countries requiting very expensive professional armies. Rather than making good use of the American gold and silver by founding new industries Europe entered the modern age, Spain purchased luxury goods made abroad. Also in 1492, Spain expelled it Jews and thus lost some of its most productive citizens. The Inquisition established earlier was used to track down Jews who persisted in their faith as well as free thinking Christians. Shortly afterwards the Protestant Reformation began to reshape Europe, especially northern Europe. Spain became the major force leading the counter Reformation and unlike England and northern Europe did not benefit from the new ideas swirling in Europe and changing society. Spain was also adversely affected by clinging to medevil economic structures while other countries were adopting more efficient economic and financial systems.
The Inquisition and Counter Reformation not only battled Protestantism, but also intellectual thought itself. The result was that as science began to emerge as a powerful European development, Spain did not participate and the country gradually declined to a poverty-stricken backwater. The Spanish Civil War and the Franco's victory had the impact of continuing Spain's isolation.
Only with the death of Franco did the Spanish economy begin to enter the modern economic mainstream (1975). Spain and Portugal entered the European Union (1986). The Spanish economy benefited from European integration. It is like much of the EU a mixed capitalist economy. It is the 12th largest economy in the world and in the EU the four largest country (after Germany, Britain, France, and Italy). Spain reported several years of rapid economic expansion. The construction industry was particularly important in the economic expansion. As a result, today the living standard is now similar to that of the other major EU countries. Socialist governments offering extensive benefits have won wide appeal among Spanish voters. The country as in the rest of the EU has expanded its social welfare system. At the same time, policies instead of promoting the private sector have either restricted the sector or placed short-sighted restrictions on it. Labor laws make it virtually impossible for companies to fire workers. As a result, the country's productive sector, as in many other European countries, is no longer capable of financing the extensive social welfare system. And a housing and construction bubble which burst (2008), has left the country's banks weakened by bad loans. Unemployment skyrocketed. The Government has attempted to help the caja system (a kind of sanings and loans). The Spanish government has adopted austerity policies, attempting to reduce the budget deficit and cutting back on social benefits. The Government does not seem to recognize the importance of a pro-growth business climate. And a wide swath of the population seems to have accepted the Socialist promise that the Government can be relied on to provide basic benefits even though the future entitlements promised are now far beyond the Government's ability to pay. Spain has so far been able to finance its debts and bond rates through mid-2011 have remained relatively low. The future of the EU and especially monetary union will in large measure depend on Spain's ability to deal with its economic crisis. The EU is today dealing with peripheral countries (Greece, Ireland, and Portugal) which have gone bankrupt. Spain is a much larger economy and the EU weakened by costly programs to shore up the peripheral countries, will find it much more difficult to assist Spain if needed.
Kennedy, Paul. The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 (New York: Random House, 1987), 677p.
Lockhart, James and Stuart Schwartz. Early Latin America (New York: Cambridge University Press, 1983).
Lynch, J. Spain Under the Hapsburg Vol., I (Oxford: 1964).
Parker, G. Spain and the Netherlands, 1559-1648 (London: 1979). According to the author, Spain furnished a minimum of 218 million ducats to the military establishment in the Netherlands (1566-1654). Receipts from the Indies were only 121 million ducats during that same period.
Thompson, I.A.A. War and Government in Hapsburg Spain, 1560-1620 (London, 1976).
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