Bourbon Reforms and the Imperial Crisis

The so-called Bourbon reforms since 1763 lie at the heart of this long-term effort by the empire to survive. They were a mix of fiscal (the implementation of fiscal monopolies and the expansion of head taxes), administrative (the formation of a new bureaucracy and, in parallel, the end of the sale of offices), and institutional measures (the introduction of a version of the Spanish intendancy system).

All of those measures aimed at capturing greater monetary resources to ensure the continuity of Crown sovereignty and to resist pressure from European rivals. Historians of the Spanish Empire have heatedly debated if these reforms formed a coherent whole or were merely contingent. The effort to increase the efficiency of the imperial fiscal machinery was implemented at various times and had to be adapted to a wide range of local conditions. Even so, it is hard to deny that there was a general, organizational sense to the operation that lent it coherence. Josep M. Delgado has described it as an administrative attempt to raise fiscal pressure on the subjects of the overseas territories and on certain metropolitan sectors linked to the colonial trade.^[2287] The overall objective was not different from that of rival monarchies: to respond to the pressures of war and imperial competition. For that reason, it was only after the Seven Years' War, once the British had seized Havana and Manila, that the Spanish Bourbons decided to launch an ambitious military reform effort in the Antilles, the laboratory for the rest of the continent. An antecedent can be found in the fiscal and military measures imposed in the territories of the defeated Crown of Aragon after the War of the Spanish Succession. When the war ended, a punitive type of income tax replaced all taxes while the transition from magistrates to military officers at the top of provincial administrations took shape.

Again, after the Seven Years' War, the viceroyalties of New Spain, Peru, and New Granada were soon incorporated into the reform effort, part of which involved new administrative territories (such as Rio de la Plata) and rulers (the intendants) whose primary purpose was to increase revenue. Military reforms involved fortifications, troops, and battleships, along the lines of John Brewer's description of the development of the eighteenth-century fiscal-military state.^[2288] The increased militia and defense capacities brought with them new fiscal pressure to reach any and all financial resources, often with negative effects on economic growth. Unlike in the British case, however, this pressure was made manifest in the Americas and the colonies rather than in the metropolis, even as merchants on the periphery of the peninsula quickly learned to distinguish the rhetoric of commerce from the monarchy’s non- negotiable demands.

Many of Spain’s conflicts with the American lower classes and Creoles were due to these tax modifications in the last third of the eighteenth century. The former were especially concerned about head taxes on indigenous labor, forced purchase of a variety of European products, the nationalization of certain sectors (tobacco and low-grade alcohols), and the gradual price increase of goods of mass consumption through state monopolies and increased sales and excise taxes. Whereas prior to the changes of 1764 and 1782 taxation had still been based largely on indigenous tribute, mining, and regulation of the fleets, these political changes widened the realm of commerce and tribute.^[2289] As Stanley and Barbara Stein have shown, the inclusion of New Spain within the new imperial political economy was crucial in the definition of a new model emphasizing taxation of mass popular consumption and the establishment of fiscal monopolies.^[2290] The voracity of the state affected the regulation of transatlantic trade (which was partially liberalized from 1765 to 1778 in exchange for steeper taxation), the monopolization of key economic sectors, and confiscation of the properties of religious orders as in the case of the Jesuits in 1767 or the Catholic church itself, threatened by the end of the eighteenth century. Once again we see a paradox: the largest of the Atlantic imperial territories was able to withstand conflicts driven by colonial and dynastic ambitions that led to the partial collapse of the neighboring British and French empires in the Atlantic and the Caribbean.^[2291] In the case of Spain, Americans paid for a growing share of imperial defense but they did not revolt, at least not until the Napoleonic armies struck the very heart of the monarchical state.

The new fiscal policy affected different sectors of colonial societies in different ways. Above all, it reinforced the Bourbon monarchy’s ambitions regarding permanence and territorial integrity. Reorganization came about through a complex new fiscal solution, the commercial integration of the colonies with the metropolis, and increased circulation of currency. As expected, it benefited certain social groups — for example, the Creole military and free blacks and mulattoes—who could fortify their ranking through military privileges in a highly stratified society. It also favored people and places who stood to gain from royal revenues earmarked for military needs. Obvious cases of the latter included the construction of expensive military installations; supplies to troops and workers in Cartagena de Indias, Montevideo, and Havana; and merchants who were protected and encouraged to build businesses and invest in those places. Commercial legislation aimed at drawing American silver back to the Iberian Peninsula favored new business and industrial sites even though these new trading networks were subject to higher taxes. They were also

threatened by Spain's fiscal policy shift to emphasizing peninsular ports as intermediate outposts for European and US trade, one of the motivations behind the tariff policy of 1778, which jeopardized local control of a growing colonial trade.

For many years, historians of the empire have debated the impact of these measures on the American and peninsular economies. If the numbers mean anything, they show that the gamble behind the fiscal transformation ended up shoring up the monarchy's military effort. It also prevented the dramatic indebtedness experienced by Spain's most direct rivals. Nevertheless, the cost to individual taxpayers and commercial and industrial interests both in the metropolis and the colonies was high, and the reforms therefore weakened the empire's long-term stability. It is in that context of heightened social differences, which often took on racial hues, that political changes were undertaken from the end of the eighteenth century until the French invasion in 1808.

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Source: Bang Peter F., Bayly C.A., Scheidel Walter (eds.). The Oxford World History of Empire. Volume Two: The History of Empires. Oxford University Press,2020. — 1352 p.. 2020

Bourbon Reforms and the Imperial Crisis

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