Economic Miracle of Catalonia in the 18th Century

After suffering more than a decade of war and devastation in its wake, the people of Catalonia dreaded their future in the hands of their victor, King Felipe V (Philip V) of Spain. Either they continue to fight to the very end or make the best out of a bad situation. Their decision dictated their fate in their future in the economic life of Spain.
Insignificance and Destruction

Catalonia before the 18th century lived in relative obscurity under the shadow of a greater kingdom. But their insignificance allowed them to maintain their ancient privileges called fueros for centuries. Unfortunately, these privileges turned to their undoing as it made them join the wrong side in a war where they paid a heavy price.

From the time of Isabella II and Ferdinand II 700 years ago,  the Principality of Catalonia belonged to the Crown of Aragon which in turn joined hands with other Kingdoms to form the Kingdom of Spain. In this union, Catalans stood in the sideline while the top spot in the government and the economy belonged to the Kingdom of Castile. The Catalans contributed as little as 4% to the treasury of Madrid from 1479 up to 1700s. Even in population, they along with the whole Kingdom of Aragon only made up 16% in 1591 of the Kingdom population and even by 1717 only 23%.
King Ferdinand of Aragon and Queen Isabella of Castille
Despite the little contribution in population and in resources, the Catalans enjoyed vast degrees of autonomy under the guarantees of the fueros. They handled their own administration and most importantly finance. The Kings of Madrid cannot just order around the Catalans because of this. But due to their lack of significance, Madrid paid little heed to their fierce autonomy.

Everything changed in 1701 with the passing of the childless and inbred wonder King of Spain Charles II. The Spanish Succession War erupted between the German-Austrian Habsburgs candidate and the Bourbon candidate Philip that lasted 13 devastating years. Unfortunately for the Catalans, they sided with the Habsburg candidate, who in 1711 ascended as Holy Roman Emperor, abandoned his Spanish claim and his supporters to their fate in the hands of Philip V.

At this point, the Catalonians who suffered sieges, deaths, and devastation feared for their fate in the hands of a vengeful Philip V.What will the King do to the rebellious Catalans? How will the Catalans survive?

Bourbon Reforms 

Philip V or Felipe V embraced his new role as King of Spain and wished to mold it into the image similar to that of his homeland France, with an absolute monarchy in the center. He revamped the whole Kingdom’s administration, finances, and colonial empire which his successors continued being collectively known as the Bourbon Reforms. The Catalans felt these reforms immediately.
Felipe V and his wife Elisabeth Farnese
In 1716, Felipe V attacked Catalan privileges and administration under the so-called Nueva Planta (New Plant) decrees. It promoted centralization and in the King’s words:
...in my kingdom honors and dignities should be given to my vassals according to merit and not having been born in one province or the other.
Old Catalan institutions, such as the Corts, Consell de Cent, and the position of Viceroy went to the trash. In turn, an Intendant appointed by the King ruled over the region with Jose Patiño as the inaugural holder.

Tax Reforms

Besides the reformation of the administration, the Catalans also experienced a tax reform under the new dynasty. Felipe V wanted the different Kingdoms of Spain to contribute equally as Castile. And with the Nueva Planta Decrees, the Catalans held nothing to stop such actions, hence, the implementation of a new tax system called Catastro.
Jose Patiño
Catastro based on a quota of tax revenues taken from a cadastre or data derived from surveys and census. Initially implemented under the Intendent Jose Patiño and later improved in 1726, it seemed a punishment from Madrid by setting up a target revenue of 1.5 million pesos for a war-torn region. The backlash resulted in a decrease to 800,000 pesos which remained the quota until 1845.

The Catastro turned out to be a boon for Catalans. As the system relied on surveys, lying and concealment plagued the system. Who would answer truthfully knowing it will be the basis of your tax? Secondly, the 800,000 target later on became bearable with years, income, and inflation creeping in the following decades. As a result, with tax quotas stable, Catalans had extra income to invest in other ventures.

Trade and Commerce Reform

Following a gradually light taxation by Madrid, the Catalans, and most especially those in Barcelona, witnessed a shift in the trading patterns of Spain. As a result of war and a new management in Madrid, restrictive trade policies under the Habsburg gave way to more open Bourbon policies. The Catalans then looked towards it as an opportunity.
Casa de Contratacion in Seville, 18th Century
A restrictive trade regime prevailed under the Habsburgs. All commerce with the vast American colonies centered around the Casa de Contratacion in Seville. The Casa scheduled ships going to the colonies for trade in convoy-like trips called flotas. The trade within Spain fared no better as different regions taxed goods crossing in and out of their borders called internal customs. The setup created small different markets discouraging growth of business.

The Bourbon King opted to change this. They changed the Casa, moving it to Cadiz opening it to bigger ships and in the 1740s and 1750s they gave licenses to ships to travel on their accord. Instead of only 1 or 2 trips, merchants plied the route multiple times. Internally, the 2 biggest Kingdoms, Aragon and Castile abolished their respective internal customs. Thus, it expanded the market size of Spain giving brave entrepreneurs the opportunity to grow their businesses. 

Thus, the Catalans witnessed a large market appear within 50 years after they suffered a catastrophe. With stagnant taxation and a vast market, Catalans, expecting poverty in the future after the rise of Felipe V, instead saw an opportunity for revival and growth.

Economic Growth 

With the taxation and trade apparently favorable, the Catalans then must find products to sell. Fortunately, they found it from the fruits of their land and foreign contacts. It led to the establishment of businesses that either made or broke them.

The soil and the infrastructure in Catalonia, unfortunately made grains, especially wheat, expensive. Dry soil along the Mediterranean Coast made it difficult to grow cereals. For the case of Catalonia, the lack of extensive roads increased transportation cost, making their produce more expensive. And so, some began to move away from grains and into viticulture or the cultivation of grape vines hoping to process them as wine or brandy and sell for higher prices.
Catalan doctor Armai de Vilanova in 14th century
created Aqua Vitae which later became brandy
The Catalans already had a long tradition of brandy making. They then began to sell this product to the Americas which found favor due to its long shelf life and easier storage. Merchants, distillers, and grape growers cashed in and began to prosper, moving on from the devastation of the Spanish Succession War and becoming pillars of Catalan revival in the 18th century.

Textile 

Besides brandy that benefited from the freer trade, a textile industry began to develop. The Catalans joined the rank of calico printers that swept Europe during the previous century. After 1716, when the government banned imported cotton, they wanted to fill the void with their eastern inspired Indianes, cotton-made calicoes with prints. They achieved it through the use of their contacts.

A calico print making industry existed in the French port city of Marseille. It shared close relations with Barcelona thanks to close geographical proximity. Some from Marseille then found employment in Catalonia who then began to establish their own prints.
A chintz (Indianes) shop, 1824
In the 1730s, indianes workshops began to grow in number. One of the examples being founded by Jacint Esteves who employed a Marseillais printer named Joan Benet Huvet. Unfortunately, plagued by theft and low quality, the workshop closed in 1737. Nevertheless, some followed in establishing their own workshops such as Bernat Gloria. With the opening of overseas and local markets, plus the ban, they flourished, the Catalans saw an industry rising.

Bernat Gloria by the 1750s with Rafael Gurdans already operated 6 workshops employing 38 workers and granted preferential duties, -50%. By 1768, Barcelona hosted 22 cotton factories. In 1773, the number stood at 55 with each employing an average of 130 workers.

Other Industries 

By the middle of the 18th century, Catalonia hosted a flourishing brandy and cotton textile industry as well as growing numbers of grape cultivators. The profits from here paid for the importation of grain which the region found difficult to produce as stated before. It also allowed for prosperity and consumption of other goods to increase. 

One of the consumer products which grew in Catalonia was chocolate. The industry picked up from the 1730s to the 1770s with the number of chocolate artisans rising. Fargas Chocolate began operation in the 1770s which still operates today. Chocolate Amatller was established in 1797 by Gabriel Amatller which still produces chocolate today. By 1779 they established their own guild.
Making of chocolate drinks in Chocolate Party, Barcelona, 1710
Many other small industries began to flourish as a result of increasing market demand overseas and affluence locally. Silk and musical instruments found markets. Shipbuilding and repair began to employ more Catalans.

With market enlargement, starting with brandy exports, the Catalans began to emerge from the devastation of the Spanish Succession War and found new ventures. Moreover, fears of repression from Felipe V dissipated as energies moved from fighting political rights to economic growth. Nevertheless, the span of growth lasted for a century, hence, what other factors laid in their success?

Keeping the Momentum

Trade

Textile and brandy powered the recovery and growth of Barcelona in the 18th century, but its sustainability relied on the colonial empire and protection. The Catalans looked for trade opportunities to exploit. Moreover, they suddenly found an unlikely ally that allowed them to keep their momentum in growth.

Barcelona and the whole of Catalonia exploited the vast American colonial empire where they sold much of their goods. In 1755, they established the Royal Company of Barcelona to pool capital and cement the trade between Catalonia and the Americas. It strengthened trade with the ports of Santo Domingo and Puerto Rico while also providing administrative support in the registration of more ships with the Casa de Contratación in Cadiz.
The ships of the Royal Company received the privilege of export tax exemption making their products cheaper. Led by Antoni Gispert who said:
not for personal interest but only for the good fo the fatherland…The Principality groaned under this yoke, lamented its hurt and implored its relief…This repeal, which will be memorable forever in Catalonia, created the most celebrated epoch of her prosperity
Nevertheless, the company later on suffered from lack of capital that made her a lame duck compared to other European trading companies. With export privileges, Catalonia’s trade grew from 14 million reales in 1784 to 56 million reales in 1792.

Protectionism

Most importantly, the rebirth of Catalonia and Barcelona relied on the graces of an unlikely ally. What they deemed to be the center hell bent in punishing their region during the Spanish Succession War turned out to be their surprising supporter. Madrid and the Bourbon Kings protected their industries from foreign and even local competition. Felipe Fernandez-Arnesto summed up the reason of the Bourbon Kings: “...the conviction that the obedience of the Barcelonese could be bought.”

Francesc Roma Roseel also summed up the relations in 1766 as “Legitimate authority, absolute but gentle rule, bread and honest amusements.” Felipe V set the conditions for the growth of the local textile industry by prohibiting import of local cotton textile industries in 1718 and reaffirmed them in 1726, 1729, and 1730.Even before, back in 1714, he exempted Catalan brandy from regulations imposed in other regions.

Unfortunately, the Catalan industries became addicted to protectionism and tariffs. Their products stood abysmally in price and quality compared to English and French textiles. By the following century, the Catalan textile industry grew to become a powerful cabal that dictated the politics of Spain just to maintain their advantageous tariff protections.

Away from Devastation 

Before the next catastrophe in Catalan during the Napoleonic War, the Catalan economic revival in the 18th century brought significant effects. It brought different effects in the short term and long term. Eventually, it set up Catalonia for its role in the succeeding century.

It helped to rebuild a war-torn region in the short term. Fr. Jaume Caresmar described Catalonia in 1780, writing:
The industry of Catalans has extended throughout all the Continent, with an abundant traffic of carts and mules, with commercial shops over all the coast and in the main cities of the Kingdom promoting the quality of its produce and distilling its surplus wine into brandy, which they sell across the Ebro river, together with olive oil, wool, silk, and other staples.
In the long term, it established basic skills in business and industry, in particular, in food and beverage and textile. It allowed the creation of profits, savings, and investments to other industries and technologies that furthered development.

Seeds of the rise of the factory system began to be sowed with the guilds starting to weaken as seen in their membership and average age of their members. Membership in the guild of bridle makers began to decrease from 1729’s 108 members to 1808’s 47. Cloth dressers’ guild fared no better from the 700 members in 1700 to only just 3 by 1825.

Generational differences began to appear with the guild of carders. Back in 1719, the age of members ranged from 25 to 65 years old. By 1793, it went up to a range of 51 to 78. Clearly, the guilds began to lose their age and younger craftsmen veered away from guilds. Many began to prefer to  be vagos or free laborers which began to grow in Catalan.

With all of this, the seeds of industrialization which came in the 19th century began to be planted. The profits in the cotton industry allowed the purchase of 2nd hand English textile machineries such as spinning jennies and mules. This later gave rise to the establishment of the 1st steam powered textile factory in 1833. The industries that grew in the 18th century became the foundation and subject of industrialization in the 19th century, Catalonia became a beacon of industrialization within the country.

See also:

Bibliography:
Books:
Fernandez-Amesto, Felipe. Barcelona: A Thousand Years of the City's Past. London, England: Sinclair- Stevenson Limited, 1991.

Thomson, J.K.J. A Distinctive Industrialization: Cotton in Barcelona, 1728 - 1832. New York, New York: Cambridge University Press, 1992.

Tortella, Gabriel. Catalonia in Spain: History and Myth. Cham, Switzerland: Palgrave Macmillan, 2017.

Websites:
"Our History." Chocolate Amatller. Accessed on November 30, 2024. URL: https://www.chocolateamatller.com/en/about-chocolate-amatller/our-history 

Petzold, Christian. "Exploring the Oldest Chocolate Shop in Barcelona: The Sweetest Legacy." BCN Travel. Accessed on November 30, 2024. URL: https://www.bcn.travel/oldest-chocolate-shop-in-barcelona/ 


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