American Silver and Its Repercussions on the Old World: The Curious Case of the Loss-Making Spanish Precious Metal Sector, 1590s–1640s

Abstract

During the last half of the sixteenth and first half of the seventeenth centuries, precious metal mines in Spain proved to be unprofitable and loss-making. At the same time, the Spanish Crown had access to rich silver deposits in the American territories. Nevertheless, a precious metal sector in Spain was promoted for several decades. This investigation tries to uncover the reasons for this strategy with the precious metal mining sector in Spain. Particular attention is hereby paid to the impact of Spanish America on the motherland in Spain. It is argued that the creation of mining institutions in Spain was a reaction to the stark dependence of Spain on American silver and has to be understood as a strategy of diversification. In addition, it will be shown that the repercussions of the American mining sector contributed to Spain’s technological and institutional advancement. These developments were not only limited to the mining sector but also included other branches of industry thus making America an important factor for progress in early modern Europe