Price Revolution Flashcards
1
Q
What evidence of a price revolution was there in 16th c Spain?
A
- Prises rose more than expected in 16th c Spain.
- Inflation rate reached around 400%.
- Not evenly spread over time or across Spain.
- Highest 2.8% 1501-1562; 1.3% 1562-1600 (slowed down in final 30 years). Nadler Oller’s research 1959.
- Steepest increases occurred in necessities, especially wheat.
- Earl J. Hamilton (1934) ‘throughout the first three quarters of the 16th c agricultural prices rose considerably faster than non-agricultural (prices).
- 1513 Alonso de Herrera ‘a pound of mutton costs as much as a sheep used to, a loaf as much as a sack of wheat’.
- 1568 Tomas de Mercado ‘thirty years ago a thousand pennies was something now it is nothing’.
- Cortes regularly complained of the price of grain and meat throughout the c.
2
Q
What are the reasons for price rises?
A
- Moral reasons, due to the wickedness of the population.
- Others blamed foreign speculators for increased cost of meat, horses, wool, cloth and silk.
- 1551 Castilian Cortes - blamed foreigners them for high cost of ‘all kinds of provisions’.
- 1588 in Viscaya claimed it was due to the laziness and drunkenness of the lowlanders, who neglected their fields and orchards.
- In mid 16th c theologians at Salamanca were first to link it to imports of gold and silver from the New World.
- 1556 Martin de Azpilcueta applied the new theory of supply and demand and attributed increased prices and wages to this.
- The theory states that the value of currency and price of goods fluctuate. Just as prices fall when goods are plentiful, currency loses its value when there is a large supply in circulation.
- 1569 Tomas de Mercado’s Manual of Deals and Contracts argued that part of the reason that new world trade led to increased prices was that it created a heavy demand for goods.
- 1568 Jean Bodin came to a similar conclusion. He pointed out that inflation in France was caused by debasement of the coinage. As there was no debasement in Spain it must have been caused by influx of gold and silver from the Indies.
3
Q
How accurate were contemporary explanations?
A
- Earl J. Hamilton’s work - 1934 - based on the official registers in Seville.
- Agreed that there was a link between the bullion coming in from the New World, in gold and silver pesos and the inflation observed by contemporaries.
- Concluded that there was an ‘extremely close correlation’ of price rises to the ‘volume of treasure imports’ ‘particularly from 1535 on’.
- To him this demonstrated ‘beyond question that the ‘‘abundant mines of America’’ were the principal cause of the ‘‘Price Revolution in Spain’’.
Criticisms of Hamilton’s work:
- J.H. Elliott and Henry Kamen have criticised his work.
- Inflation did not closely follow the amounts of bullion. Prises rose fastest in the first half of the 16th c when little bullion was imported. Once imports, especially silver after the 1550s, inflation slowed.
- Prices did not rise evenly across all goods, which it would have done if it was monetary based. The price of agricultural products, especially grain and wool, rose twice as much as manufactured goods.
- Kamen has also questioned the accuracy of the records at Seville. He believes silver-smuggling increased from the 10% which Hamilton suggests it was in the first half of the c. Therefore inflation was at its lowest when the most silver was available.
- The silver also did not stay in Spain, re-exported to pay for Spanish imports, for the pay and provision of Spanish forces abroad and to repay German and Genoese bankers.
- Hamilton’s figures also do not take in to account regional variation across Spain.
4
Q
What are the other possible causes?
A
- The law of supply and demand - Lynch (1988) points out that increase supply of money in circulation without an increase in either agricultural or manufacturing output prices rise. The same amount of goods is ‘chasing more and more money’.
- The population increase in Spain - No census but households in towns or districts might be counted for taxation, land registers and Church records also provide some evidence for cautious statements on this.
- It had been steadily rising since 15th c, by the 1550s probably 6.5 million.
- Greatest growth 1530-70, highest in 1580s then slowly declined. Population in 1590s 7-8 million.
- Large population increases in some towns: Seville 1534 to 1561 tripled in size (33,000 to 95,000).
- Increased population without increased production of basic staples, such as food leads to price rises as it is pay or starve.
- Population boom, especially in the towns, lead to increased demand for food and it became profitable to do this.
- As there were no new techniques to increase food production the solution was to turn more land into arable land. Common and public land, less fertile or less accessible land and pastureland was all converted. Food production became more expensive and prices reflected this.
- Textiles were also in increased demand and Spain had no technical innovations to increase manufacture. This had important consequences for industry.
5
Q
What was the social impact of inflation?
A
- The main losers - those on fixed income or receiving low rents, or a cash income instead of goods.
- Small landowners, the lower clergy, government officials, farm labourers and many town dwellers. Each year their standard or living went down. By 1581 an Italian engineer, Antonelli commented that it was so bad that ‘the nobles, gentry, commoners and clergy cannot live on their incomes’.
- Unskilled labourers reliant on seasonal work fared even worse. Henry Phelps Brown and Sheila Hopkins (1959) showed that for Valencian building workers wage rises did not keep up with inflation.
- New taxes were also introduced (1590 the millones tax on basic food affected everyone). Rents also increased eg in Valladolid rents almost doubled 1530 to 1555.
- The roads of Spain thronged with beggars, vagabonds and the unemployed.
- The Crown - was affected as the cost of administration and paying, feeding and equipping the military increased. However, in real terms cost of loans was lower and they could always levy more or new taxes.
- The higher nobility (the grandees) - they too managed to maintain their income levels. Vast estates with land to be farmed meant rents could be increased in line with inflation at least. The Crown needed them and they were paid well for service in the highest military and administrative positions.
- Entrepreneurs - Sales and trade benefited from inflation, manufacturers and merchants did well until 1550. Inflation damaged exports, especially to the colonies later. Powerful merchants were able to survive. Fortunes were made from the Indies especially by those in the wine trade and shipping. Many claimed mino noble status and were tax-exempt.
6
Q
What was the impact of inflation on agriculture?
A
- Main staple was bread so grain production was crucial,
- Kamen used tithe returns to show that in New Castile and Catalonia production rose steadily 1460-1560, reaching its highest point in 1560-80 before going in to decline.
- This was not due to increased yields, meaning more land was used for crops.
- In 1552 Florian de Ocampo noted ‘even mountains disappeared as everything in Castile was ploughed for sowing’. This might be poorer, less fertile lands, common lands of royal lands (baldios) bought from the Crown.
- Spain also had to import more. First from its own empire (Sicily) then increasingly from the Baltic. Especially in years of famine 1560s, 1570s and 1590s.
- A time of chronic food shortages - David Vassberg (1984) that the fault lay not with the weather but with human inefficiency. Unequal distribution of land, poor agricultural techniques (crop rotation), using mules not oxen, problems of obtaining investment (cash or credit) and high rents and taxes. By 1580s most of Spain relied on imports.
- The sheep trade - important to Spain, with its main centres in Segovia, Toledo and Cuenca. The migration of sheep trampling (allowed because of the power of the Mesta) arable land had ruined Spanish agriculture (Klein 1920). There is little evidence for this. Mesta was powerful in the early 16th c (crown valued it for loans) however as its trade declined so did the support of the king.
7
Q
What was the impact of inflation on industry?
A
- Spain possessed iron, lead and copper mines, as well as leather, soap and armaments industries.
- Main industry textiles, wool and silk.
- Little evidence available but it suggest that the population growth and demand from the New World settlers led to increased textile output for the first half of the 16th c.
- Later, inflation meant higher production costs, this combined with poor quality cloth mean foreigners who bought Spanish wool could make better quality goods. These could be sold in Spain at lower prices than Spanish textiles but at higher prices than the exported wool.
- Other factors also hindered industry.
- Town guilds often made the introduction of new practices difficult.
- Government loans brought higher returns than investing in industry which might have improved the quantity and quality of goods produced.
- The Crown’s foreign wars could not be equipped by its own armaments industry.
- Poor roads and regional customs barriers made transport costs around Spain high.
- Government policies often inflicted more damage. In 1552 legislation to prevent removal of Spanish goods, unless for the Indies, was partially reversed in 1558 (as it had not worked). In 1548 foreign cloth was allowed to be sold in Spain, competing cheaply with Spanish cloth.
8
Q
Who were the winners and losers during the periods of inflation in the 16th c?
A
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