The reign of Charles III, 1759–88

Economic revival

After 1714 Spain experienced a gradual economic recovery, which became quite marked in the second half of the 18th century. It is doubtful that much of this revival was the work of conscious but often confused government policy. Thus, the famous decree (1783) “ennobling” the mechanical trades had little practical result; the attempt to establish government factories and replace religious charity by the productive employment of the poor was a relative failure. Government policy had little to do with the growth of population, which rose during the century from 8 million to 12 million. The increased demand for food and the consequent sharp rise in prices encouraged agriculture, benefiting the large landowners of the south and the small farmers near growing towns such as Barcelona. The most remarkable feature of this economic revival was the emergence in Catalonia after 1745 of a modern cotton-based textile industry. The industry benefited from a protected market in Spain and the colonies. In the Basque provinces the archaic iron industry began a slow process of modernization. In Galicia, Catalan immigrants established a flourishing fishing fleet. The brandy trade brought sudden prosperity to the ports of Catalonia and their hinterland. Nevertheless, government actions of earlier years, such as financial reforms and the abolition of internal customs duties, removed obstacles to the expansion of the internal market, and the opening of the American trade acted as a strong stimulant.

Most of these developments occurred not in the old Castilian core of the monarchy but in the peripheral regions and in the towns rather than in the countryside. Price rises were steepest on the periphery; in Barcelona, for example, they outstripped wages and thus created the beginnings of a social problem. The role of Catalans in the economic revival lies at the origins of the Castilian stereotype of the Catalans as selfish, thrusting businessmen, indifferent to traditional values and exploiting their fellow Spaniards.

Imperial problems

Charles III maintained that the key to Spain’s prosperity lay in the development of an American market in the Indies. He saw clearly that Spain alone could not preserve an overseas market closed to the outside world against Britain. Ricardo Wall’s policy of strict neutrality had allowed Britain to make gains in Canada that were bound to weaken France—the only other anti-British power in America. If Britain would respect Spain’s possessions, or if Charles could mediate between France and Britain in such a way as to preserve the balance between them in America, then to commit Spain to the French alliance was a dynastic luxury. Once it was clear to Charles that British terms were nonnegotiable, then the Bourbon Family Compact of 1761, a mutual-defense treaty with France, was a piece of realpolitik, signed by the “Anglophile” Ricardo Wall.

The consequence of such an alliance was involvement in the Seven Years’ War—too late to save France. In 1762 the British occupied Havana—the greatest single blow sustained by Spain in the war. Spain theoretically allowed no foreigners to share directly in the colonial trade, the effect of which was to starve the colonies of necessary imports and to encourage smuggling. In 1762, 15 ships entered the port of Havana; during the 11 months of British occupation, 700 did. This was a dramatic indication to the colonists of the drawbacks of the Spanish monopoly, especially when that monopoly was exercised by what was, in European terms, an underdeveloped country.

The Treaty of Paris (1763) concluded the Seven Years’ War and destroyed France as an American power. Spain lost the territory between Florida and the Mississippi, in return gaining Louisiana from France. Spain also had to recognize Portuguese advances in the Río de la Plata (the fort of Sacramento) and the British right to cut mahogany in Central America. The Family Compact was therefore an immediate military failure, and it was only the revolt of the North American colonies against Britain that enabled Spain to recover the ground it had lost; the successful alliance with France to aid the colonists resulted in the Treaty of Versailles (1783), which gave back Sacramento, the two Floridas, and Minorca. Not until later did it become apparent that an alliance of revenge with colonial insurgents was a shortsighted policy for an imperial power.

Driven by fears of British and Russian expansion, Spain also undertook a more aggressive policy in the far north of its American possessions: California, New Mexico, Texas, and Arizona. These were reorganized into a single administrative unit, the Internal Provinces, under a unified military command. A string of missions was established in California to assert Spanish control.

The problems of imperial defense were thus temporarily solved by British weakness after 1765. The positive side of Charles III’s imperial policy was an attempt to create an efficiently administered colonial empire that would provide the crown with increased revenues and with a closed market for the exports of an expanding Spanish economy, a program known as the “Bourbon Reforms.”

The rationalization of the administration of the Indies had started before Charles III with the creation of a new viceroyalty at Santa Fé de Bogotá (present-day Colombia) in 1717. To protect the south against the British and against Portuguese incursions from Brazil, the Viceroyalty of the Río de la Plata was created in 1776. The centrepiece of Caroline reform was the introduction of the intendant system in the colonies to tighten up local administration. Most dramatic of all was the abolition of the monopoly of Cadiz, by which all trade to the colonies had to go through that port. Beginning in 1778, non-Castilian ports could trade directly with the colonies.

The new policies brought some immediate and striking results. Energetic viceroys and ministers and ruthless intendants doubled or tripled imperial revenues. The volume of Spanish goods in the American trade increased 10-fold in 10 years, prompting British concern at the Spanish revival. But imperial free trade would not satisfy the growing demand from Creole producers for free trade with all nations. Nor did the colonial oligarchs desire efficient government and higher taxation; they preferred bad government that let them control their own affairs. They showed their discontent in a series of revolts in the 1780s; only the fear of the native Indians drove them back to allegiance to the Spanish crown.

Domestic reforms

The domestic reforms of Charles III are more interesting for what they intended than for what they accomplished. They were not, as has often been maintained, directed at fostering a “bourgeois revolution.” The middle classes were too weak, in a predominantly agrarian country, for the role of a modernizing elite; nor did Charles III contemplate a frontal attack on the traditional nobility. The purpose of reform was to remove what seemed to civil servants to be “traditional” constrictions on economic growth and administrative anachronisms that prevented the efficient exercise of royal power. The reformers’ view of the inadequacy of the existing system was well expressed by Pablo de Olavide, an active administrator who would later fall afoul of the Inquisition:

A body composed of other and smaller bodies, separated and in opposition to one another, which oppress and despise each other and are in a continuous state of war…Modern Spain can be considered a monstrous Republic of little republics which confront each other because the particular interest of each is in contradiction with the general interest.

Reorganizations of the machinery of central government made for greater executive efficiency, but complete rationalization was never achieved; the old machinery of the councils persisted, with the Council of Castile as the ultimate decision-making body. An attempt to establish royal control of municipalities (without which reforms could not get past the oligarchic councils) was likewise only a partial success. Most of the public works that characterized the late 18th century were the achievement of vigorous captains general. The extensive civil functions of these military officials were the first signs of a hybrid military-civilian government that, in another form, was to be developed in the 19th century.

Spain’s agrarian economic structure also was not modified. All the chief reformers believed that the great and extensively cultivated estates, especially in Andalusia and Extremadura, constituted the greatest bar to agricultural prosperity. The landless underemployed proletariat who worked the large estates began to alarm reformers. The statesman and author Gaspar Melchor de Jovellanos asked:

Why in our villages and towns are these men without land and in the countryside land without men? Bring them together and all will be served.

It was felt that property should be more widely distributed and that there should be a free market in land. Yet none of the reformers was radical enough to push through a wholesale assault on private property or on the civil entail (the juridical instrument by which the latifundios, or large estates, were preserved intact). Acts such as the limitation of future entail, which preserved great estates intact over generations (1789), the limitation of the privileges of the Mesta (1779), and the right to enclose olive groves and irrigated land (1788) showed that the reformers believed primarily in the right of private individuals to do what they liked with their own property; the unrestricted pursuit of private profit, they believed, would bring public prosperity. The enemy was corporate property. Hence, it was proposed that common lands owned by municipalities and the crown should be sold for individual cultivation and that ecclesiastical entail (mortmain) be ended.

The attack on the privileges of the greatest corporation in Spain, the church, was less radical than has sometimes been maintained. Charles III himself was a devoted Catholic who dedicated Spain to the Immaculate Conception. While some of his servants were fashionable anticlericals, most were regalists; that is, they asserted the right of the crown to control over the church in civil matters. In the extreme regalists’ view, the state should take care of charity and education, and it should subject priests to civil jurisdiction for civil crimes and assert the traditional rights of the crown over church appointments.

The main attack of the regalists fell on the Jesuit order. In 1766 a serious riot in Madrid revealed some of the difficulties confronting the reformers. The abolition of fixed wheat prices during a bad harvest (a step that reflected the reformers’ belief in the virtues of a free market) and an attempt to reform outlandish fashions in popular dress brought out the mob in Madrid. The Jesuits were alleged to have fostered the riot and were expelled from both Spain and America in 1767. The importance of this expulsion, however, has been overestimated. Already expelled from France and Portugal, the Jesuits were bitterly criticized by rival orders as well as by the secular clergy: 42 of the 56 bishops approved of the expulsion. Again, the expulsion was a negative achievement; more ambitious plans to establish a state university system and a state welfare organization failed.

The question arises of the extent to which the policies of Charles III resulted from the acceptance by his servants of the precepts of the Enlightenment. Certainly Aranda, the “Hammer of the Jesuits,” and Olavide were what were called esprits forts (“strong spirits”; i.e., French-influenced radicals); their views gave a sharp edge to traditional regalism. Jovellanos was a disciple of Adam Smith. Although his famous Informe sobre la ley agraria (“Report on the Agrarian Law”) is not original, the book is significant in that it attempts to apply dogmatic laissez-faire ideology to Spanish conditions and is one of the foundations of Spanish liberalism.

One of the aims of the Enlightenment was to produce a society in which no traditional prejudices or institutions should inhibit economic activity. This was the motive behind the attempt to encourage the nobility to engage in commerce by making it “honourable.” Patriotic societies, organized with government encouragement from 1765 onward, were meant to provide the provincial basis for a progressive society and to familiarize Spaniards with European advances in technology and agriculture. However, this attempt did not progress much beyond the status of local reading rooms and debating societies.

Traditional Roman Catholic society was still strong, if under attack from a minority of intellectuals and civil servants. As the reaction of the countryside after 1808 was to show, the church was still a great social power. Arthur Wellesley, the duke of Wellington, observed that “the real power in Spain is in the clergy. They kept the people right against France.” Although a number of bishops could be counted among the “enlightened” and supported much of the reform program, most of the clergy viewed the new ideas of the Enlightenment as “foreign” and dangerous. There could be no such thing as moderate progress encouraged by the king himself—the notion of a “revolution from above” that was to haunt subsequent Spanish history. Voltaire, John Locke, and Jean-Jacques Rousseau were quite simply dangerous heretics, though the Inquisition proved powerless to prevent the clandestine circulation of their works. It was the clerical attacks on heretics as much as the subversive works themselves that familiarized a narrow stratum of society with new ideas. When the French Revolution exposed the dangers of progressive thought, the traditionalist cause was immensely strengthened, and the Inquisition appeared to the crown itself to be a useful instrument to control the spread of dangerous ideas.