Europe. After its absolutist political system solidified, it
went into relative and then, after 1600, absolute economic
decline. Almost the first acts of Isabella and Ferdinand after
the Reconquest was the expropriation of the Jews. The
approximately two hundred thousand Jews in Spain were
given four months to leave. They had to sell off all their land
and assets at very low prices and were not allowed to take
any gold or silver out of the country. A similar human
tragedy was played out just over one hundred years later.
Between 1609 and 1614, Philip III expelled the Moriscos,
the descendants of the citizens of the former Arab states in
the south of Spain. Just as with the Jews, the Moriscos had
to leave with only what they could carry and were not
allowed to take with them any gold, silver, or other precious
metals.
Property rights were insecure in other dimensions under
Habsburg rule in Spain. Philip II, who succeeded his father,
Charles V, in 1556, defaulted on his debts in 1557 and
again in 1560, ruining the Fugger and Welser banking
families. The role of the German banking families was then
assumed by Genoese banking families, who were in turn
ruined by subsequent Spanish defaults during the reign of
the Habsburgs in 1575, 1596, 1607, 1627, 1647, 1652,
1660, and 1662.
Just as crucial as the instability of property rights in
absolutist Spain was the impact of absolutism on the
economic institutions of trade and the development of the
Spanish colonial empire. As we saw in the previous
chapter, the economic success of England was based on
rapid mercantile expansion. Though, compared with Spain
and Portugal, England was a latecomer to Atlantic trade,
she allowed for relatively broad-based participation in
trading and colonial opportunities. What filled the Crown’s
coffers in Spain enriched the newly emerging merchant
class in England. It was this merchant class that would form
the basis of early England economic dynamism and
become the bulwark of the anti-absolutist political coalition.
In Spain these processes that led to economic progress
and institutional change did not take place. After the
Americas had been discovered, Isabella and Ferdinand
organized trade between their new colonies and Spain via
a guild of merchants in Seville. These merchants controlled