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Early Impact of Mesoamerican goods in Iberian society.

Economy

The Spanish became the first entrepreneur to use full advantage of their colonies in the new world to expand their empire. Between 1501 and 1650, the Spanish empire acquired between 16,887 tons of silver and 1,813 tons of gold from the America into their ports; excluding the tons of wealth that were smuggled.[[|[1]]]

While the Spanish and Portuguese Empires thrived at home from their expenditures into the America, their new economic structure and social hierarchy became dependent upon it. Roberts continues to describe this when stating, “These remittances of precious metals from America allowed the Spanish kinds to maintain their power In Europe when their European resources alone would have been insufficient for that task.”[[|[1]]]

The Spanish and Portuguese capitalized upon every opportunity to extract revenue back to their empires; utilizing forced labor.[[|[1]]] When the Pope banned the use of forced labor by the natives, Spanish and French entrepreneurs turned to the African Slavery.

The Spanish crown applied the tactic of extraction to keep cost at ultimate low, which led to political corruption in their colonies and back at home. Robert summarizes it as, “An entire commercial system based on government official came into existence.”[[|[1]]]

Spain extractive method of its colonies would soon be problematic and outdated, as new global players would become involved in the Americas. The Spanish colonial system and economic dependency for raw materials would hinder Spain’s commercial markets. Spain would place less emphasis on their colonies in North America due to its’ lack of mineral wealth and would use them to as buffers to protect ports and other colonies further south. Weber highlights the flaw when stating, “The economic malaise that affected Spain’s North American colonies reflected the weakness of the Spanish economy itself, built traditionally on the exportation of raw materials and the importation of manufactured goods.”[[|[2]]] Spanish economy back at home, spiraling with inflation, would become dependent upon foreign imports and manufactured goods. The Spanish inflation had raised domestic manufactures and made them uncompetitive

Spain’s colonial agenda of extraction would lead to its’ inability to supply it’s colonies and subjects at home. Weber builds upon the Spanish inability to capitalize commercial markets when stating, “The cost of transportation plus profits for numerous middlemen and additional internal custom duties (alcabalas) along the way drove the price of some items to many time their Verecruz or Mexico City value by the time they reached the frontier.”[[|[1]]] The crown’s inability to establish efficient trading route and placement of high tariffs would discourage merchants and traders from legitimate business practices. Spain’s colonies in the Americas would soon suffer as merchants and traders would turn to other forms of trade. Weber summarizes it when stating, “For suppliers and consumers alike, such artificially high prices made smuggling so attractive that perhaps two-thirds of all commerce throughout the Spanish empire consisted of illegal trade, much of it with foreigner… it increased as English and French merchants grew more numerous and proximate.”[[|[2]]]

State Impact

The enormous wealth being extracted from the Americas and poured into the Spanish society would lead to corruption at home and in the colonies. Corruption and accumulation of vast resources at the top of the food chain had some ripple effects throughout the core countries. Corruption ran high from the top of the system, beginning from the crown in Spain and spread throughout the colonies. Royals, elites, government officials, and merchants grew significantly wealthy in a short period of time. Patch points out that, “State played a leading role in capital accumulation under colonialism. “Corruption” was therefore an integral and necessary part of the state system.”[[|[1]]] Government officials played a key role in the system in which they helped mobilize and invest capital, channeled the surplus away from the producers, and then split the profits with their merchant partners.  Merchant status increased as corruption increased, playing a key role in spreading different commodities and ideas. Dalton highlights that, “Merchant households in Cadiz that brokered marriages with foreign traders, pointing out that many Irish/ Spanish Families during the 1770’s, maintained a global reach”[[|[2]]]. Other recorded instances of corruption occurred when the Crown needed revenue such as in times of war. The Sale of Magistracies began in the 1670s, when the government of the last Habsburg king, Charles II, introduced the measure in a desperate attempt to tap all possible sources of revenue.[[|[3]]] Technically not sold but a post was usually granted to worthy subject who had performed monetary service for the king. Corruption ran high as the sale of a post became more commonly sold then given away.

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[[|[1]]] Robert Patch, “Imperial Politics and local economy in colonial Central America 1670-1770,” 80.

[[|[2]]] Heather Dolton, Port Cities Of Atlantic Iberia, C. 1500-1900, Sixteenth Century

Journal (Academic Search Premier, 2010), 490.

[[|[3]]] Robert Patch, “Imperial Politics and local economy in colonial Central America,” 83.

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[[|[1]]] Ibid, 133.

[[|[2]]] Ibid.

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[[|[1]]] Robert Patch, “Imperial Politics and local economy in colonial Central America 1670-1770, 78.

[[|[2]]] David J. Weber, Spanish Frontier in North America (New Haven: Yale University Press, 2009) 132.

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[[|[1]]] Paulo Drinot, “From Silver to Cocaine: Latin American Commodity Chains and Builidng of the World Economy,” Journal of Latin American Studies (Academic Search Premier, 2016) 790.

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[[|[1]]] Ibid.

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[[|[1]]] Robert W. Patch, "Imperial politics and local economy in colonial Central America 1670-1770," Past & Present no. 143 (Academic Search Premier: EBSCOhost, 1994), 77.

The significant amount of silver brought back to Spain and Portugal created inflation in Europe. For Spain, the period is referred to as Spanish price revolution.