ECONOMIC GROWTH IN THE LATE EIGHTEENTH CENTURY

As the detailed discussion in Chapter 10 has indicated, the last quarter of the eighteenth century was an era of unprecedented prosperity and economic growth for Spain and Spanish America, a period in which for the first time the metropolis succeeded in unleashing the agricultural potential of its American possessions, whilst also promoting the continued expansion of mining production. The relationship between this economic growth and the liberalisation of trade is abundantly clear. It must be recognised, however, that the era of genuine ‘free trade’ in the Hispanic world as envisaged by the economic theorists of Bourbon Spain was short-lived. It was introduced hesitantly, like so many other aspects of the reform programme of Charles III in the 1760s, as part of the reconstruction of imperial policy which followed Spain's humiliation at the hands of Britain in the Seven Years’ War; it collapsed in 1797, an early casualty of Spain's alliance with revolutionary France, with the introduction of neutral commerce as a desperate expedient to maintain some imperial trade in the face of the British blockade of the Atlantic ports. The intervening Anglo-Spanish war of 1779–83, the only one of the three international conflicts from which Spain emerged as a victor, did less permanent damage to commercial relations between Spain and America than that which began in 1796, but, by paralysing trade for three years, it did frustrate the expansionist aims enshrined in the 1778 reglamento of ‘free trade’. Even when the conflict ended in 1783, and merchants became genuinely free for the first time since early 1779 to organise their trade with America in response to purely commercial considerations, restrictions remained upon the application to Venezuela and New Spain of the 1778 legislation. These restrictions remained in force, at least in theory, until 1789, thereby limiting the period of full, empire-wide ‘free trade’ to less than a decade.