Stanley J. Stein, Barbara H. Stein. Silver, Trade, and War: Spain and America in the Making of Early Modern Europe. Baltimore: Johns Hopkins University Press, 2000. ix + 351 pp. $51.50 (cloth), ISBN 978-0-8018-6135-2.

Reviewed by Ralph Lee Woodward (Department of History, Texas Christian University)
Published on H-LatAm (June, 2002)

Silver, Trade, and War

Silver, Trade, and War

Thirty years ago Stanley and Barbara Stein published a highly influential series of essays on The Colonial Heritage of Latin America (New York: Oxford University Press, 1970). That slender volume offered insight and structure to understanding the dependent nature of Latin America's development from colonial times into the nineteenth century. Now they have collaborated on another work of even greater significance for understanding the history not only of Latin America, but more especially the trajectory of early modern European history and the Atlantic world in general. This work, in fact, is not primarily about Latin America, except that the flow of silver from New Spain and Peru is central to its thesis.

As its title implies, this is a book that links the phenomenal flow of silver from the New World to Europe with the development of transatlantic trade and the series of intercolonial wars that determined the balance of power in Europe in the seventeenth and eighteenth centuries. The authors divide their work into two broad sections: Part 1 focuses on the Hapsburg legacy, in which they detail the structure and operation of Atlantic trade and its relation to the decline of Spanish hegemony in Europe; part 2, "Toward a Spanish-Bourbon Paradigm," analyzes the recognition of Spain^Òs underdeveloped and dependent economy by Spanish analysts and the failure of early Bourbon efforts to remedy the problem.

The work ends with the 1759 accession of Charles III, whose government implemented the most substantial "Bourbon Reforms." The Steins argue that "in hindsight we know that only an unexpected conjecture of internal and external pressures" (p. 259) could have opened the way to rapid change of that sort, and that resistance to such change had prevented more effective innovation to change the institutional structure of the Spanish economy during the previous century. Noting that a rich historiography exists for the reforms carried out under Charles III and IV, they also note the paucity of studies on the early Spanish Bourbons, which their work helps to remedy.

In both sections of the work the authors have combined significant research on the practical workings of the Atlantic trading systems with detailed discussion of serious criticism of the Spanish system by Spaniards and others. They convincingly make the point that many members of the Spanish "political elite" were aware of the shortcomings of Spanish policy, but that the combined forces of Spain^Òs historical culture, special interests firmly entrenched during the early Hapsburg period, and the success of foreign interests through diplomacy and war brought Spain to a dependent status as an underdeveloped economy by the end of the seventeenth century. Much of the work focuses on the second half of the seventeenth century, when a series of treaties with Holland, England, and France forced Spain both to admit that she could not enforce a monopoly on trade with the Americas and to allow foreign merchants legally and illegally to establish themselves firmly within the monopoly granted to the Andalusian ports of Seville and Cádiz. This is perhaps the most impressive part of the work, with its brilliant synthesis of a broad range of twentieth-century work on foreign participation in the Carrera de Indias, much of it done by non-Spanish European scholars, along with new research especially in French and other European archives. While much of the earlier work on the Spanish trade system had been grounded in records found in the Archivo General de Indias in Seville, the Steins have been especially successful in utilizing records from French and Flemish sources to reveal the records and observations of foreign merchants in Lower Andalusia and describing in precise detail how they managed to dominate the trade, often operating through Spanish fronts, or prestanombres, members of the prestigious consulados of Seville or Cádiz.

In their comparison of successful British and French development of commercial capitalism with Spain's continued reliance on bullionism, the Steins make much of the contrast between the formal structure of Spain^Òs trading system and the actual practice of it. Thus, the Steins suggest that, under the Hapsburgs, Spanish policy was not mercantilist at all, but rather what they term "pseudomercantilist," guided overwhelmingly by Spain^Òs dependence on American silver in an attempt to maintain the military and naval hegemony established in the sixteenth century. While this was ultimately a losing struggle, through treaty concessions and wartime alliances, Spain managed to hold on to nominal territorial control of nearly all of her American empire. Yet the enormous flow of silver did little to develop her economy, instead flowing directly or indirectly to France, Flanders, Holland, England, or Germany, where it capitalized the more successful commercial and industrial capitalism there. In analyzing this process, the Steins offer no single cause, but skilfully elaborate the complex juncture of cultural, economic, political, and social determinants that brought Spain through one crisis after another, but left her a second-rate power by the eighteenth century, unable to achieve the leadership that the rich resources of her American empire might have endowed.

This is a work that is certainly destined to take its place among the classics of Spanish economic history, but it does not have a great deal to say about internal Latin American development. Some attention is given to the Mexican merchants and the growing rivalry between the consulados of Mexico and Cádiz in the eighteenth century. We also learn something of the ways in which particularly the French found their way into Latin American markets by the mid to late seventeenth century. One might have expected to find more on investments by Latin American economic interests into the Andalusian economy, especially the so-called peruleros of Lima. Yet the work is remarkably effective at integrating the economic histories of Spain, northern Europe, and Latin America, showing the interrelated quality of their development in the early modern period. It also helps to explain the remarkable persistence of medieval institutions well into Spain^Òs modern history. This is a work that will enlighten all levels of study of colonial Latin America, appropriate for use in both undergraduate surveys and advanced graduate research seminars.

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Citation: Ralph Lee Woodward. Review of Stein, Stanley J.; Stein, Barbara H., Silver, Trade, and War: Spain and America in the Making of Early Modern Europe. H-LatAm, H-Net Reviews. June, 2002.
URL: http://www.h-net.org/reviews/showrev.php?id=6430

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