7.5: Spain

Practically every other kingdom in Europe attempted to reorganize the state along the absolutist lines followed by France. Monarchs tried to consolidate royal power at the expense of their nobles and on the backs of their peasants. Those efforts were at least partly successful in places like Sweden and Denmark, but were disastrous failures in Spain and England.

In the 16th Century, Spain had been the most powerful kingdom in Europe. Enormous reserves of bullion came from its control over Central and South America. Shrew marriages by the Habsburgs aligned the country with the largest dynastic system in Europe. However, the failed invasion of England in 1588 and the ongoing debacle of the Dutch Revolt resulted in enormous losses of both wealth and prestige. By the 1620s, the monarchy was bankrupt and Spain was divided between numerous small independent kingdoms and territories. Resembling the Holy Roman Empire, the Spanish king only directly ruled the central territory of Castile. (It was the Castilian dialect, centered on Madrid, that became the official Spanish language).

Spanish nobles asserted their own sovereignty against the pretensions of the monarchy. Attempts by royal officials to enact reforms similar to those undertaken by Richelieu in France were met with failure. Even as Spain was losing the Dutch Revolt, it was trying to bankroll the Catholic forces of the Thirty Years’ War, thereby undermining its own financial reserves and stretching its military power to the breaking point. As result, the regional parliaments of various Spanish territories revolted against the central monarchy, with Portugal achieving complete independence in 1640.

Simultaneously, there was little economic dynamism. With a small middle class, Spain’s conservative nobility succeeded in preventing non-nobles from achieving positions of authority within the Spanish royal bureaucracy. Relatively little of the empire's wealth ended up in the coffers of the monarchy, and the sheer scale of the slave-based extraction of precious metals from the New World ran up against simple economic laws. By the 17th Century, the bullion-based system was in dire straits due to the inflation silver imports introduced to the European economy.

There was a strong mood of depression and nostalgia among elite Spaniards. These feelings are most memorably expressed in Miguel Cervantes’ Don Quixote (published in two parts, 1605 and 1615), portraying a delusional minor nobleman trying to live out a glorious tale of fighting giants and dragons while actually attacking windmills.