Was the 'rise of the Netherlands' a symptom or a cause of the 'decline of Spain'?

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Was the ‘rise of the Netherlands’ a symptom or a cause of the ‘decline of Spain’?

     The reputation of the Netherlands as an important country increased in prominence during the ‘early modern period’ of history, that being 1500-1700.  This essay intends to show that their ‘rise’ can be shown in terms of both a cause and also symptomatic of Spain’s decrease in significance over the same period.  The Spanish ‘decline’ largely concerns the period between 1600 and 1650, when Phillip III went from “monarch of the world” (New Cambridge Modern History Volume 4 (1970), pp. 269) into a position where his country had descended into “poverty and torpor” (NCMH, pp. 280).  Meanwhile, the Netherlands (in this essay, the term ‘Netherlands’ refers to the seven United Provinces in northern Europe) “raised themselves from nothing the challenge the massed might of the Spanish monarchy” (JH Elliott, ‘Richelieu And Olivares’ (1989), pp. 72).

     Spain, even before 1600, had mounting debts and fiscal troubles.  In 1595, the Spanish crown owed 100 million ducados to its creditors, and their debt was estimated at 1.6 million ducados per year from 1601 onwards (NCMH, pp. 440).  It had such an unreliable reputation that moneylenders were loath to give money at less than 70% interest (note that the Netherlands could borrow at 3%).  Such a situation meant that Spain’s actions over the period should have been concentrated on rebuilding the economy, clearing debts and strengthening the nation.  However, Spain had already amassed a global empire, which she desired to keep.  Kamen notes in ‘Golden Age Spain’ (1988) that “Spain, with its small population and weak economy, did not have the resources to create or sustain great-power status” (pp. 7).  This Empire included the Netherlands, so we can see that the inability to sustain power status will have aided the Netherlands rise in stature, in effect, a symptom of Spanish decline.  Kamen notes on page 9 that by 1634, 93% of Spanish expenditure is on foreign policy, a gross mistake for any nation, as that money could surely be better used in increasing production.  Indeed, all of the gold and silver being imported from the Americas was promptly used to repay other countries, leaving Spain in financial misery.  Despite this dire situation of finance, Spain was engaged during the period 1600-1650 with numerous wars.  Since 1580, the United Provinces had been warring with the Spanish crown.  Kamen says that “The Netherlands revolt was Spain’s Vietnam, sucking the money and lives of the interventionists” (pp. 11).  Like Vietnam, it was also impossible to win.  Spinola wrote to Phillip III saying that for 300,000 ducados per month, all the army could do was “reduce the pride” of the rebels, but not at all defeat them (NCMH, pp. 265).  This war is, of course, an explicit cause of Spain’s decline, as it drained finance out of Spain’s coffers and seriously damaged the country’s reputación.  A final war at the time was in Mantua, which coincided with the end of a 12-year truce with the United Provinces.  Elliott notices that “Flanders or Italy was an old Spanish dilemma” (pp. 101) – with two wars at opposite ends of Europe, Spain was forced to many decisions that were detrimental for the country.  The inability to concentrate firepower in any area, for no ‘breathing-space’ in between battles, exacerbated Spain’s decline in European influence, while enabling the Netherlands to continue it’s rise.  In this way the ‘rise of the Netherlands’ was a symptom of Spanish decline.

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     Olivares admired the Dutch model of commerce, and, as Elliott puts it, he wished to “turn Spaniards into merchants” (pp. 70).  He planned to do this by boosting the shipping power and encourage trade, instead of the current anti-capitalist atmosphere (embodied in the Inquisition), including road tolls and heavy taxation on goods – “a complete mercantilist policy” (NCMH, pp. 281).  At the time, Spanish ships that went to the Americas highlighted exactly how unprepared Spain was for commerce – 90% of all goods on board were not Spanish in origin! (NCMH, pp. 438).  A revision of commercial policy may well have ...

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