The Decline of Spain in the Seventeenth Century
One of the most striking phenomena of the early modern period was the rise and then the decline of Spain between the late fifteenth and the late seventeenth centuries. Spain’s rise to be a European and global power began with the marriage (1469) of queen Isabel of Castile (1474–1504) and king Ferdinand of Aragon (1479–1516), whose realm included Aragon proper, Valencia and Catalonia. They not only united “Spain” by bringing together, very loosely, these disparate territories, but they also conquered the last Islamic realm (Granada) in Iberia, supported Columbus’ Atlantic voyages, and extended Spanish dominion in north Africa and Italy.
In 1516, this inheritance passed to their grandson, the Habsburg Charles I of Spain (1516–56), the future Holy Roman Emperor, Charles V. Forty years later, Spain, Spanish Italy (Naples, Sicily, Sardinia and Milan), the Spanish Low Countries (Flanders, Luxembourg and Franche Comte) and an expanding Spanish America (“the Indies”) from which foreigners were excluded and which was yielding growing revenues, passed to Charles’s son, Philip II (1556–98), under whom Spanish power and influence reached new heights.
Philip secured Portugal and its empire in 1580–1 and in 1588 launched an attempt to conquer England – the Spanish Armada – which almost succeeded. Nevertheless, the Armada’s failure is widely regarded as a turning point, the beginning of a decline which became pronounced in the seventeenth century. Spanish forces continued to win victories in the 1620s and 1630s, in the Thirty Years War, but in 1639 another Spanish fleet, convoying troops to Flanders was destroyed off the English coast; a few years later, in 1643, Spain’s Army of Flanders suffered defeat in France at Rocroi.
For many historians, this finally extinguished Spanish military power. Imperial retreat followed. In 1648, after a near eighty-year struggle to suppress the Dutch Revolt in the Low Countries, Philip IV (1621–65) acknowledged the independence at last of the Dutch Republic; in 1655, the English admiral Blake seized the island of Jamaica; while further losses were sustained inside and outside Europe in the following decades. The rise and apparent decline of Spain can be pursued in the State Papers (mainly in series SP 94), drawing above all on the despatches of successive English diplomats resident (often for long periods) at the Spanish Court.
Unfortunately, these records do not cover the whole of the period, reflecting the fact that for years at a time diplomatic relations were broken off; most obviously in wartime. It also has to be said that some of those diplomats, for example, Alexander Stanhope in the 1690s, had a largely jaundiced view of Spain, its government and people, such that what they write about monarch, ministers and subjects cannot always be taken at face value; some others, however, were more sympathetic.
Whatever their personal opinions, successive diplomats were expected to provide their own Court with the ‘correct’ intelligence regarding Spain and its material resources which would enable monarch and ministers at home to formulate an effective policy vis-a-vis Spain and the other sovereigns of Europe. Seen in this light, those reports – and those of the many English consuls resident in Spanish ports, and in those of other parts of the Spanish monarchy, notably Naples and Sicily (SP 93) – offer an invaluable and hitherto largely untapped insight into Spain’s difficult seventeenth century.
The setbacks suffered by Spain from c. 1590 (above) owed something to some serious domestic problems. Whereas the sixteenth century had been a period of remarkable population growth, the seventeenth was one of demographic decline. Serious outbreaks of plague around 1600, which returned with less intensity at various times between 1600 and 1700, and the expulsion of the moriscos, Christianised Moors, between 1609 and 1614 contributed to a fall in numbers which struck foreign observers.  The declining population helped depress Spain’s economy.
Once prosperous industrial towns (Granada, Segovia, Toledo) decayed as their key industries fell into difficulty. For its part, Seville, which had prospered greatly in the sixteenth century as the hub of the Indies trade, suffered from the silting up of the river Guadalquivir – the trade re-locating to Cadiz later in the seventeenth century—and from a depression in the Indies trade from about 1620. One consequence of that recession was that less bullion was being remitted to Spain for the king, or for the merchants trading with the Indies. Spanish agriculture, too, was in growing difficulty.
The government in Spain, short of revenue for its expensive imperial projects, increased the fiscal burden and manipulated the coinage, triggering inflation and further damaging the Spanish economy. The picture was less gloomy in some parts of Spain than in others – the coastal periphery suffered less than the interior, Old and New Castile – but a sense that things were not right in Spain stimulated a wave of commentators, the so-called arbitristas who sought, often in print, to diagnose and propose solutions to Spain’s (or rather Castile’s) travails.
The existence of this group was among the most distinctive cultural or intellectual consequences of recession in Spain, although it is possible that historians have been too influenced by the sombre picture painted by these arbitristas. These difficulties exacerbated, and were in turn sharpened by political difficulties within the Spanish monarchy. As early as the 1620s, the king’s favourite, the count duke of Olivares, recognising that a depopulated and recession-hit Castile could no longer bear unaided the great burden of empire, devised the so-called “Union of Arms”, to spread that load more widely.
Unfortunately for Olivares and king Philip IV, this blueprint for greater imperial unity threatened the near autonomy enjoyed by most of the non-Castilian realms ever since the essentially dynastic and personal “unification” of Spain under Ferdinand and Isabella (above). Especially problematic was the response of the principality of Catalonia (whose ability to contribute was over-estimated by Olivares), which in 1640 revolted and eventually accepted the sovereignty of the king of France, Louis XIII.
For similar reasons, the kingdom of Portugal also resented the failure of the Court of Madrid to protect its overseas empire (in the East Indies but above all Brazil) against Dutch encroachment and the intrusion of Spaniards into office in Portugal in breach of the terms of Philip II’s accession to the throne in 1580–1. In December 1640, the duke of Braganza, Portugal’s senior aristocrat, took advantage of Philip IV’s preoccupations in Catalonia to declare himself king.
For almost thirty years, the Spanish king was fighting to restore his authority in Portugal, in a conflict which caused devastation in those parts of Spain bordering Portugal (Galicia, Castile, Estremadura and Andalucia), until in 1668 the Court of Madrid finally recognised Portugal’s independence. In the meantime, the loss of, and war in, Catalonia and Portugal increased the pressure on the other territories of the Spanish monarchy, prompting further (short-lived) revolts in Naples and Sicily (1647–48) and even some disturbance in the Indies.
In the later 1640s it looked to many outside observers as if the Spanish monarchy was disintegrating, its difficulties compounded by the fact that its elite appeared to have lost the martial qualities which had underpinned Spanish success the previous century.  In fact the monarchy survived. Remarkably, and rather curiously, Castile, still bearing the main burden, was relatively quiet. Naples and Sicily were both recovered within a reasonably short period of time, and in 1652, the Catalans decided that they preferred the lighter touch of the Habsburgs to the heavier hand of the French monarchy.
Nevertheless, the Court of Madrid had to abandon its plans to exact more from Catalonia. Historians have identified what has been called a “neo-foral” regime in operation for the rest of the century, one in which Madrid accepted that it must respect the fueros, or customary laws, practices and privileges, and de facto autonomy and fiscal exemption, of the Crown of Aragon. This shift in the balance between centre and periphery, which also meant greater autonomy for Spanish America, may have weakened Madrid’s ability to assert itself in Europe.
But other factors were also at work. Seventeenth-century Spain was the age of the “lesser Habsburgs” – Philip III (1598–1621), Philip IV, and Charles II (1665–1700) – who are widely thought to have been less able and less energetic than Ferdinand and Isabella, Charles V and Philip II. Philip III was the first to rely on a new feature of the Spanish political scene, the royal favourite or valido, the first being the duke of Lerma. 5] Philip IV’s valido from c. 1620 was Olivares until the latter’s fall in 1643. Philip sought to rule without a valido thereafter. However, new problems arose in the reign of Philip’s son and successor, Charles II. For one thing, Charles succeeded as a four year old child. As with royal minorities everywhere, it encouraged a struggle for power. Unfortunately, the Regent, Charles’ mother, Mariana of Austria, sought aid in government from two favourites.
The first, the Austrian Jesuit, Nithard was effectively expelled from Spain (1669) following the machinations of another new and disturbing element in Spanish politics, Philip IV’s bastard son, Don Juan of Austria, who had been omitted by his father from the Regency and who resented his exclusion. To achieve power, Don Juan exploited the contemporaneous Spanish defeat at the hands of Louis XIV in the so-called War of Devolution, 1667–8. Following Nithard’s fall, Mariana continued to exclude Don Juan from power and favoured instead the relatively obscure Fernando Valenzuela.
Valenzuela’s rise to the position of chief minister and grandee status again provoked Don Juan and his supporters who exploited resentment at renewed defeat at French hands in Louis XIV’s so-called “Dutch War” (1672–78). In a palace coup (1676), Don Juan ousted Valenzuela and became briefly (dying in 1679) chief minister of his half-brother. These were remarkable events, the monarch a helpless observer of a power struggle in which defeat abroad fuelled the domestic power struggle: evidence indeed of a transformation of Spain’s domestic and international position since c. 580. Charles’s achievement of his majority in 1675 did not much improve matters. He enjoys a very poor historical reputation. Besides being dismissed as not very intelligent – some even dismiss him as an imbecile or idiot – he was unable to provide Spanish government with the energetic direction which it needed in difficult circumstances. 
His weakness encouraged factionalism among the nobility, which seemed to be the real power in Spain.  In addition, his inability to father a child by either of his two wives, Anne-Marie of France (d. 689) and Mariana of Neuburg – prompting some to suggest that he was bewitched, (hence the name by which Charles is widely known in Spain, el Hechizado) and triggering a bizarre meeting between the king and an Italian exorcist – encouraged further factionalism as his Court divided between the rival foreign claimants, Austrian Habsburgs and French Bourbons, for the Spanish Succession; a problem which focused international attention on Spain in the years preceding Charles’ death in 1700.
The Spanish monarchy, once the arbiter of international affairs, was now the passive, impotent object of international diplomacy.  For some Spaniards setbacks of this sort, combined with those at home, may have suggested that a God who had favoured the rise of Spain earlier had now turned against it. But the decline of Spain, like that of all dominant powers, was in some respects relative, simply the other side of the coin of the emergence, or re-emergence of other powers whose previous weakness had enabled Spain to take a lead and to rise in the first place.
In the great age of Spanish success, the later sixteenth (and the early seventeenth century), for example, France had been riven by religious civil war, as it was later by the domestic upheaval we know as the Frondes (1648–53). However, the reign of Louis XIV (1643–1715) saw a remarkable recovery of France, which subsequently replaced the Spanish monarchy as the dominant power in Europe. Spain, however, was frequently on he receiving end of this remarkable French revival: in 1667–68 when it seemed that only the intervention of England, the Dutch and Sweden prevented the collapse of Spanish Flanders; in 1672–78 when Franche Comte was lost to Louis as well as more of Flanders; and again in 1683–84 when Louis seized Luxembourg.
Louis XIV’s vigorous government and personality contrasted remarkably with that of Charles II, while French culture replaced that of Spain which had been so influential c. 600. Also relevant in this context was the emergence of England, briefly in the 1650s (the Commonwealth), and later, and more permanently, following the Glorious Revolution of 1688. Having said that, historians have been far too ready to write off seventeenth-century Spain, in part influenced by eighteenthcentury writers wishing to praise the new Bourbon dynasty for its supposed transformation of Spain.
It is increasingly clear that the multi-faceted domestic demographic and economic recession referred to earlier was not century long: it had largely bottomed out by the 1640s, after which a slow recovery began. In addition, one of the reasons other powers came to the rescue of Spain in 1667–8 and on later occasions was a concern that Spain should throw its still enormous resources into the struggle to restrain Louis XIV, who had replaced the king of Spain as the main threat to the European balance.
Those resources included substantial remittances of bullion from the Indies; indeed bullion imports in every decade after 1660 exceeded the peak achieved in the 1590s, although foreign merchants were now, and long had been, the major beneficiaries of that trade despite their formal exclusion from it. Some foreign diplomats found it irksome that Spanish ministers continued to speak as if Spain was still the force it had been in the sixteenth century when in fact Spain clearly was not as powerful as before.
However, such language reflected a real determination on the part of many in Spain to preserve reputation and empire. That attitude, which was also reflected in a distinctive, formal and slow-moving style of government which exasperated foreign commentators, was an important factor in the remarkable resilience of the Spanish monarchy in this period, and helps explain why on Charles II’s death the global Spanish monarchy was still largely intact and a prize well worth fighting for in the War of the Spanish Succession.
Not surprisingly, and for all Spain’s difficulties in the seventeenth century, historians are less confident than they were of the validity of the term “decline” in describing without qualification the experience of the monarchy in that period.