10 Things to Know About Catalan Economy of the 18th Century

From the devastation of the Spanish Succession War that the 18th century introduced, Catalonia emerged with a flourishing economy that exploited the reforms of Spain’s new Bourbon Kings. Here are 10 things to know about Catalonia's economic revival during that century:

1. Catalonia was on the sidelines under the Habsburgs

The center of attention since the time of Queen Isabella and King Ferdinand in the 15th century until the end of the 17th century had been Castile. Catalonia, which belonged to the Kingdom of Aragon, contributed little in terms of revenue and population.

In terms of government revenue, Catalonia and the rest of the Kingdom of Aragon contributed only 4% in 1610. In population, the region only took 16% of Spain’s population in 1591 and increased little over the centuries. By 1717, it shared only 23% of the population.

Wedding Portrait of Ferdinand and Isabella, 1469

2. Catalan made a Wrong Bet in the Spanish Succession War

Despite Catalonia’s menial contributions to Madrid, it managed to maintain its medieval privileges called Fueros. Being in the margin allowed the Catalans to stay out of Madrid’s sights and keep to their own affairs. With the death of Charles II, the War that followed threatened the existence of these Fueros.

The Catalans sided with the Habsburg candidate Charles during the Spanish Succession War. By 1711, however, Charles decided to abandon the Catalans and Spain to become Charles VI Holy Roman Emperor. Philip of the House of Bourbon became King Philip V or Felipe V of Spain and the Catalans, dreaded their prospects under the ruler they resisted from.

Felipe V and his wife Elisabeth Farnese, 1739

3. Catalans witnessed the Bourbon Reforms First Hand

The new Bourbon King Felipe V wanted Spain to reflect the government and even the economy of his homeland France. Hence, centralization of government with a sprinkle of Colbertism or economic policies implemented by the late French finance minister Jean-Baptiste Colbert, became  the theme of reform in Spain during the 18th century.

Catalonia experienced this first hand. From 1709 to 1716, King Felipe V issued a series of administrative decrees called Nueva Planta (New Plant), It aimed to change the administration of the country and placed great power and authority to the King. And so, old institutions in Catalonia went to the trash. For instance, instead of a Viceroy, an Intendant ruled over Barcelona.

In addition to administrative reforms, taxation and trade saw sweeping changes. Reforms in this 2 areas created the atmosphere for Catalonia to explore in the century.

Cover of the Nueva Planta decrees

4. Catalan Cheated Their Taxes

Jose Patiño y Rosales oversaw an implementation of a tax reform in Catalonia which created a tax system called Catastro. Previously, Catalonia collected its own taxes without interference from Madrid due to the fueros. But Patiño implemented a survey to collect data regarding land ownership, income, and livelihood of each Catalans. The data created a cadastre which then became a basis of Catalonia’s tax revenue quota.

Initially, the Catalans needed to remit around 1.5 million pesos. Devastated and battered, they protested the high quota and in the end, they only had to pay 800,000 pesos. Even this amount they called oppressive at the start. Later on, however, as recovery began, the quota remained and became easier to meet. One reason for the lightness laid with construed value recorded in the cadastre.

The cadastre relied on survey and census. The Catalans simply lied or concealed their land ownerships and income to maintain the 800,000. Madrid failed to curb this and only implemented reforms in 1845. The stable tax allowed Catalans to invest more in other ventures

Jose Patiño

5. Market Expansion

Besides taxation, trade and customs reform became a key in the reformist agenda of Madrid. Under the Habsburgs, a restrictive trade regime reigned. One plagued by tight control with trade between the mother country and the colonies in the Americas as well as internal customs, meaning, different regions imposed tariffs on products coming from other regions.

Felipe V and his successors started to dismantle this. In the 1750s after the War of Jenkin’s Ear aka War of Austrian Succession in Europe, the Casa de Contratacion which oversaw the trade between Spain and Americas loosened up its control. It opened ports for trade for licensed ships. Internal customs began to be removed between Castile and Aragon. Hence, a Catalan businessman had an opportunity to sell his goods in a wider market and make profits.

Casa de Contratacion in Seville, 18th Century

6. Growth Built by Brandy

One of the first to see an opportunity were brandy merchants. Barcelona boasted a long tradition of brandy making dating as far back as the 14th century. Brandy’s long shelf life and easy-storage allowed it to be exported to the Americas.

It sold well and demand rose. Soon, farmers moved from cultivation of grain, which grew with difficulty in dry Mediterranean soil, to easier and productive viticulture or cultivation of grapes. Grapes produced wine and when distilled became brandy. Grape growers, distillers, and brandy merchants prospered and they invested in other industries.

Armai de Vilanova, 14th century, developed the distillation of
wine which later came to be known as brandy

7. Rise of the Cotton Textile Industry

Besides brandy, a new cotton industry began to emerge in Catalonia. In particular, the crafting of indianes, printed cotton-made calicoes, Catalonia established this industry through the use of their contacts with the nearby French port of Marseille which hosted a calico printing industry.

In the 1730s Barcelona saw a rise in the number of workshops producing this textile. Soon men like Bernat Gloria rose to prominence by operating 6 workshops that employed 38 workers. By 1768, 22 cotton factories operated in Barcelona and it grew to 55 factories with each employing at least 130 workers.

A chintz (Indianes) shop, 1824

8. Trickle Down Effect

Prosperity from brandy and textile trade as well as the enlargement of the colonial market allowed other industries to emerge. For instance, silk, musical instruments, olive oil, and even shipbuilding saw an impetus to profit. But one of the most interesting commodity that benefited from the rise of Barcelona was chocolate.

Number of chocolatiers increased between 1729 and 1770. By 1779, they founded their own guild. Farga Chocolate began in the 1770s and still operates to this day. Chocolate Amatller also founded its roots in 1797, profiting from the rise in consumption among the prosperous businessmen.

Making of chocolate drinks in Chocolate Party, Barcelona, 1710

9. Sustained by Protectionism

Surprisingly, despite the initial hostilities between Felipe V and the Catalans, Madrid implemented protectionist policies that favored Catalonia’s trade and business. For instance, in 1714, Catalan brandy enjoyed preferential treatment from the monarchy by being exempted from tight scrutiny which other regions met. At the same time, the Crown imposed a ban on foreign cotton textile which again Catalans exploited to establish and promote their own industry.

In 1755, the Royal Company of Barcelona began to operate. It enjoyed port access to Santo Domingo and Puerto Rico. It provided administrative support to ship registration with the Casa de Contratacion. Most importantly, its ships enjoyed exemption from export duties which made its goods cheaper.

Unfortunately, protectionism created complacency and addiction, especially with the textile industry. Catalan textile stood no chance in price and quality in comparison with its peers in England or even France. Instead of raising quality and innovation, the industry relied on tariffs. Later on, the textile industry formed a cabal which influenced Spanish politics just to maintain the protection they enjoyed. Virtually, the tariffs became the new fueros.

A share certificate of Royal Company of Barcelona, 1758

10. Sowed the Seeds of Industrialization

Catalans' rebirth and rise in the 18th century created the capital needed to finance the industrialization boom that later exploded in Europe. By the 1780s and 1790s, Catalonia began to see the use of 2nd hand English jennies operating in its factories. Not surprisingly, the first steam powered textile factory in Spain started operation in Barcelona in 1833.

The skills and business acumen developed under the Bourbon Dynasty paid dividends. While most of Spain remained agricultural and backward in the 19th century, Catalonia became a beacon of development.

See also:

Catalan Economic Miracle (18th Century)