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Benefits

To what degree did Spain benefit or become disadvantaged from its exploration and conquest of the New World?. Benefits. Increase in prestige and power so that Spain became competitive with other Euro powers. Great wealth fueling its artistic period.

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Benefits

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  1. To what degree did Spain benefit or become disadvantaged from its exploration and conquest of the New World?

  2. Benefits • Increase in prestige and power so that Spain became competitive with other Euro powers. • Great wealth fueling its artistic period. • Opportunities for Spaniards – more than at home! • Fulfillment of Spain’s Christian mission.

  3. Disadvantages • Price revolution and inflation, increase in royal expenditures, instability of royal finances, and repudiation of royal debt. • Overextension of Spain’s ability to promote Catholicism (conflicted with other empires) • Difficulties fulfilling economic demands b/c of expulsion of traditional trading populations (Jews and Muslims), discouraging economic modernization and manufacturing.

  4. Latin American Silver and Spain Chapter 15

  5. Iberian Empires in the Americas • Conquest grew out of individual efforts by freelance adventurers, NOT royal policy • Conquistadors were awarded with control of their own encomiendas • By 1570, large parts of Central and South America were controlled as semiprivate regimes of conquistadors! • The king worried about control • 1500s saw a steady increase in Spanish population, leading to a sharp rise in the demand of food and goods.

  6. Mining and Agriculture in the Spanish Empire • Though gold was rare, it soon became evident that silver was not • Zactecas in Mexico • Potosi in Peru • A mita, system which forced each town to contribute laborers to the mines. People most often drafted by the mita were Native American Indians

  7. Silver and the Spanish Economy • Silver flowed from the New World to Spain • The Spanish gov’t kept 1/5 if all silver in taxes • Spain used silver to pay long-term debts. • This money was also used to build a large army and navy to fight wars in Europe to try to stop the spread of Protestantism – (The Spanish Armada) • This money also funded Spanish trade in silks, spices and other exotic Asian goods stimulating global trade

  8. The Negatives • Too much silver production led to inflation and loss of value • The Spanish bought most of their manufactured goods; never developed their own industry. • On the down side, inflation was often harmful to small businesses and local artisans in Spain who could not compete with cheaper Asian goods

  9. As a result… • Bankers lent money to the Spanish Crown despite falling value – which created bigger problems • Spain over-extended itself trying to fight Protestant countries • Because silver is not a renewable product like silk, spices, and porcelain, Spain developed a NEGATIVE BALANCE OF TRADE with China. • 1588 – Spanish Armada defeated by British.

  10. The Answer? • Mercantilism!! • Government protects the domestic market so as to guarantee a favorable balance of trade. • Limit imports • Set tariffs • Encourage trading companies

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