Economic Change: Spain
The 17th century saw the beginning of Spain's economic downfall for three reasons: a decline in the profitability of exports from New Spain, greater military spending as Spain engaged in new, far-reaching wars, and a mix of debt and poor policy decisions.
Spain's ventures in New Spain, its American colonies, led to its primary focus being the mining of silver, which became very profitable for Spain for trade purposes and taxation purposes imposed by the Spanish government. However, between 1623 and 1650m, silver shipments fell sharply as trade between Spain and the Americas dropped by roughly 50%. As this happened, the Spanish colonies became increasingly self-sufficient, reducing their need for Spanish imports. Spain had a vision of global domination, and its ambitions resulted in a disregard for Spain's domestic economy in favor of the exterior market of New Spain. The King at the time, Philip IV, promoted these policies, which caused inflation to skyrocket and resulted in a Spanish currency depreciation. This was again worsened by decreasing revenue from taxes on dwindling silver production.
At the same time as these issues were occurring, Spain's military spending increased. Spain was stretched far as it fought to defend its fare, reaching global domains, particularly against the Dutch in the Far East and the Caribbean. Kamen cites that "In 1624, it was informed to the king that the drain of cash to counter the Dutch in the Far East had reached alarming proportions, noting that during the decade 1610-1619, it amounted to a substantial outflow... 'the bulk of which was spent outside of New Spain'" (Kamen, 1982, p. 154). These military obligations imposed a substantial financial strain on New Spain, diverting resources that could have been used to strengthen its economy to this war effort.
The surrounding items, Philip IV's Patagon, a copy of the Santa Maria ship, and the Charter of the Dutch West India Company, attempt to encapsulate this complex economic history. The Patagon coin signifies the importance of silver in Spain's economy and that which was devoted to military spending. The Santa Maria replica represents the start of Spain's overseas expansion and its ensuing downfall due to overexertion of resources, contributing to its economic collapse. The GWC Charter demonstrates external pressures from other countries, such as the Dutch, which challenged Spain's economic control by draining their resources. These items help convey how military overreach, budgetary mismanagement, and the loss of instability of colonial wealth led to the deterioration of Spain's economy in the 17th century