Free Ports within Empire: The Intellectual Origins of Spain’s Intra-Imperial System of Free Trade, 1765–1789

ABSTRACT

Between 1765 and 1789, the Spanish crown issued a series of comercio libre decrees that liberalised trade between Spanish America and peninsular Spain. What was the crown attempting to do by relaxing trade restrictions within the empire? Because the comercio libre decrees only authorised free trade within the confines of the empire, it may be easy to conclude, as the extant scholarship has, that these decrees were a delayed attempt to revitalise an increasingly obsolete mercantilist system. Indeed, Spain’s new imperial system of free trade appears to be little more than an outmoded form of protectionism centred on hoarding bullion. This article pushes against this perspective and shows that Spain’s decrees of comercio libre were part of an attempt to erect a peculiar interconnected system of free ports within the empire. Even though Spain’s free trade system excluded international trade, its intellectual architects deployed Enlightenment political economy to dynamize and integrate the imperial economy while avoiding the increasingly bellicose competition for international markets that was ascendant among European empires.

KEYWORDS:

• Commercial reform
• Enlightenment
• free trade
• Spanish empire
• political economy

Acknowledgements

I would like to thank Koen Stapelbroek and Corey Tazzara for inviting me to present this work in Helsinki for a conference on the ‘Global History of Free Ports'. I feel privileged to be able to collaborate with two towering scholars of the early modern period. I am deeply indebted to colleagues in Spain, especially José María Iñurritegui and Xabier Lamikiz, who have mentored and supported me over the course of my academic career. I will remain eternally grateful for their support and friendship. Additionally, I would like to thank the institutions that have supported this research: Princeton University, the University of Chicago, the Alexander von Humboldt Foundation, and Queens College-CUNY. Finally, I am delighted to acknowledge that this work was supported by Spain’s Ministerio de Ciencia e Innovación under research projects PGC2018-095007-B-I00 and PID2020-115261RB-100.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Cross, ‘South American Bullion Production and Export’; Flynn and Giráldez, ‘Cycles of Silver’.

2 Fisher, The Economic Aspects of Spanish Imperialism in America.

3 On the wealth of New Spain’s merchants, see Tutino, Making a New World. On Spanish American living standards in the eighteenth century, See Arroyo Abad, Davies, and Zanden, ‘Between Conquest and Independence’; Dobado-González, ‘Pre-Independence Spanish Americans’.

4 Marichal, Bankruptcy of Empire; Torres Sánchez, Constructing a Fiscal-Military State in Eighteenth-Century Spain.

5 For a discussion of the older historiography, see the introduction in Alimento and Stapelbroek, eds., The Politics of Commercial Treaties in the Eighteenth Century.

6 Shovlin, Trading with the Enemy.

7 Alimento and Stapelbroek, eds., The Politics of Commercial Treaties in the Eighteenth Century; Hont, Jealousy of Trade; Kapossy, Nakhimovsky, and Whatmore, eds., Commerce and Peace in the Enlightenment.

8 Jones Corredera, ‘Perpetual Peace and Shareholder Sovereignty’; Jones Corredera, The Diplomatic Enlightenment.

9 A 1768 commercial treaty with France, which expanded the Family Compact of 1761, is one major exception. But this treaty was simply concerned with assuring that no other European nation enjoyed greater commercial privileges in Spain than France. And, in the end, this treaty had very little effect. Additionally, Spain’s Treaty of El Pardo (1778) with Portugal is another exception. However, more than a commercial treaty proper, the treaty of 1778 was an extension of the Treaty of San Ildefonso (1777), which aimed to settle the border dispute between Spanish and Portuguese territories in South America. In exchange for the recognition of Brazil beyond the Tordesillas limits of 1494, Spain recuperated Colonia del Sacramento and received the islands of Fernando Poo and Annobón in the western coasts of Africa. Other minor examples include treaties of ‘friendship and commerce’ with Morocco (1767) and the Ottoman Empire (1782). For a list of Spanish commercial treaties in the eighteenth century, see Cantillo, Tratados, convenios y declaraciones de paz y de comercio.

10 Wright, ‘British Government Borrowing in Wartime’; Velde and Weir, ‘The Financial Market and Government Debt Policy in France’.

11 Herr, The Eighteenth-Century Revolution in Spain, 52.

12 Elliott, Empires of the Atlantic World, 406.

13 Stein and Stein, The Colonial Heritage of Spanish America, 104. More recently the Steins asserted that ‘Spain’s policy-makers were not “reformers” but merely anxious to preserve the colonies in America from direct exploitation by English and French merchants. Their project may best be described as a form of “defensive modernization”’. Stein and Stein, Apogee of Empire, 351.

14 Delgado Ribas has suggested that the fiscal pressures that Spain imposed on Catalonia and Spanish America for purposes of war might have ultimately altered the traditional pact between local elites and the crown, which paved the way for general discontent across the empire. Delgado Ribas, ‘Construir el estado, destruir la nación’.

15 Barbier and Klein, ‘Las prioridades de un monarca ilustrado’.

16 Kuethe and Andrien, The Spanish Atlantic World in the Eighteenth Century.

17 Llombart, Campomanes: economista y político de Carlos III; Llombart, Jovellanos y el otoño de las luces; Astigarraga, Los ilustrados vascos; Astigarraga, A Unifying Enlightenment.

18 Paquette, ‘The Reform of the Spanish Empire in the Age of Enlightenment’; Paquette, Enlightenment, Governance and Reform in Spain and its Empire.

19 For a detailed discusión of this perspective and its opposite, see Bernal Rodríguez, ed., El ‘comercio libre’ entre España y América (1765–1824); García-Baquero González, El comercio colonial en la época del absolutismo ilustrado; García-Baquero González, Cádiz y el Atlántico (1717–1778).

20 For a general account of Barcelona’s cotton industry, see J. K. J. Thomson, A Distinctive Industrialization.

21 Montesquieu, Considerations on the Causes of the Greatness of the Romans and their Decline.

22 See Smith, The Wealth of Nations, ch. VII, Part II, p. 715.

23 On the Novatores, see Pérez Magallón, Construyendo la modernidad.

24 Not only were his works translated into multiple European vernaculars, but the Spanish version went through multiple printings. For a biography, see McClelland, Benito Jerónimo Feijoo.

25 Feijoo was the only writer to whom a Spanish king granted immunity from public criticisms and Inquisitorial scrutiny. Hence, even while many found heresy in his works, the immunity Feijoo obtained from Fernando VI in 1750 allowed him to explore philosophical issues, including the work of radical materialists like Baruch Spinoza, that no other Spanish thinker could in public. Sánchez Blanco, La mentalidad ilustrada, chap. 2.

26 Lehner, The Catholic Enlightenment.

27 Zavala y Auñón, Representacion al rey n. Señor D. Phelipe V, 6.

28 Zavala y Auñón, Representacion al rey n. Señor D. Phelipe V, 8.

29 On the tributo real, see Zavala y Auñón, Representacion al rey n. Señor D. Phelipe V, 46–47.

30 On the tributo personal, see Zavala y Auñón, Representacion al rey n. Señor D. Phelipe V, 48–50.

31 Zavala y Auñón, Representacion al rey n. Señor D. Phelipe V, 51–52.

32 Zavala y Auñón, Representacion al rey n. Señor D. Phelipe V, 80.

33 Zavala y Auñón, Representacion al rey n. Señor D. Phelipe V, 40.

34 Campomanes, Bosquejo de política-económica española, 45.

35 Perdices de Blas, La economía política de la decadencia de Castilla en el siglo XVII.

36 On Olivares, see Elliott, The Count-Duke of Olivares. On the Portuguese conversos, see Studnicki-Gizbert, A Nation upon the Ocean Sea.

37 For the most complete treatment of the subject, see Sánchez Belén, La política fiscal en Castilla durante el reinado de Carlos II. For a concise and lucid treatment, see Sanz Ayán, ‘Los estímulos reformistas y sus límites’.

38 Callahan, ‘A Note on the Real y General Junta de Comercio’; Molas Ribalta, ‘The Industrial Policy of the Board of Trade in Spain'.

39 Macanaz, Auxilios para bien gobernar una monarquía católica, 41.

40 Macanaz, Auxilios para bien gobernar una monarquía católica, 43.

41 Macanaz, Auxilios para bien gobernar una monarquía católica, 47.

42 Macanaz, Auxilios para bien gobernar una monarquía católica, 65.

43 Ventura de Argumossa Gándara, Erudicción política, 1.

44 Campillo y Cossío, Nuevo sistema, 74. The manuscript circulated with José del Campillo y Cossío listed as its author, but, as I have shown elsewhere, Macanaz was likely the author of this work. Tavárez, ‘A New System of Imperial Government’.

45 Ward, Obra pia, 16.

46 Ward, Proyecto económico, XIII. Although the book was published posthumously in 1779, Ward had written it in 1762.

47 Gándara, Apuntes sobre el bien y el mal de España, 132.

48 Campomanes, Reflexiones sobre el comercio español a Indias, 366.

49 Muñoz, Discurso sobre economía. Antonio Muñoz is a pseudonym. Enrique Ramos was the real author.

50 Muñoz, Discurso sobre economía, XXIII.

51 Muñoz, Discurso sobre economía, XXVII.

52 Muñoz, Discurso sobre economía, 18.

53 Muñoz, Discurso sobre economía, 32.

54 Muñoz, Discurso sobre economía, 42.

55 Muñoz, Discurso sobre economía, 29.

56 Muñoz, Discurso sobre economía, 75.

57 Hume, Essays, 326. Hume was not entirely against government intervention in the economy. ‘All taxes, however, upon foreign commodities, are not to be regarded as prejudicial or useless, but those only which are founded on the jealousy above-mentioned. A tax on GERMAN linen encourages home manufactures, and thereby multiplies our people and industry. A tax on brandy encreases the sale of rum, and supports our southern colonies’ (p. 324). For a discussion of this issue, see Haakonssen, The Science of a Legislator.

58 Hume, ‘Of the Balance of Trade’, in Essays, 312.

59 Hume, ‘Of the Balance of Trade’, in Essays, 308.

60 Muñoz, Discurso sobre economía, XLII–XLIII.

61 Hume, ‘Of the Balance of Trade’, in Essays, 257.

62 For the most thorough discussion of Enlightenment political economy in Spain, see Astigarraga, A Unifying Enlightenment. On the new consulados, see Tavárez, ‘Colonial Economic Improvement’; Paquette, ‘State-Civil Society Cooperation and Conflict in the Spanish Empire’.

63 The ports authorised to trade within the comercio libre system included: (1) In Peninsular Spain: Sevilla, Cádiz, Málaga, Almería, Cartagena, Alicante, Alfaques de Tortosa, Barcelona, Santander, Gijón, Coruña, Palma, Santa Cruz de Tenerife, and (2) In Spanish America, San Juan de Puerto Rico, Santo Domingo, Monte-Christi, Santiago de Cuba, Trinidad (Cuba), Batabanó, Havana, Margarita, Trinidad, Campeche, Golfo de Santo Tomás de Castilla, Puerto de Omoa, Cartagena, Santa Marta, Rio de la Hacha, Portobelo, Chagres, Montevideo, Buenos Aires, Valparaíso, Concepción, Arica, Callao, and Guayaquil.

64 The literature on ‘comercio libre’ is enormous. For an old but still useful collection of chapters on the topic, see Bernal, ed., El ‘comercio libre’ entre España y América. For a classic article on the matter, see Fisher, ‘Imperial “Free Trade” and the Hispanic Economy’. For a discusión of the political process that led to comercio libre, see Muñoz Pérez, ‘La publicación del reglamento del comercio libre de Indias’; Kuethe, ‘La desregulación comercial y la reforma imperial en la época de Carlos III’.

65 Jones Corredera, ‘Perpetual Peace and Shareholder Sovereignty; Jones Corredera, The Diplomatic Enlightenment.

66 Archivo Histórico Nacional (hereafter AHN), Estado, 2326 – Carta del Marques de Grimaldi dirigida a de los Llanos, Craywinckel, Aragorri, Goossens y Landazuri. 31 July 1764.

67 AHN, Estado, 2326 – Carta de Pedro Goossens a Grimaldi. 5 September 1764.

68 AHN, Estado, 2326 – Apuntamiento. 15 September 1764

69 AHN, Estado, 2314, exp. 1 – Consulta original de una Junta formada de orden de S.M. sobre el proyecto de comercio de América. 19 February 1765.

70 Before outlining some solutions, the ‘Consulta’ listed a total of eight main causes of decline. Among the most important causes were that Spain’s commerce was ‘estancado’ (monopolised) in Cadiz, that the system of fleets and galleons limited the metropole’s navigation with all its formalities, that the excessive duties of ‘tonelada’ and the ‘palmeo’ method prevented many subjects from venturing into commercial enterprises, and that the prevalence of foreign contraband misappropriated Spanish American markets from their rightful owners.

71 AHN, Estado, 2314, exp. 1 – Consulta original de una Junta formada de orden de S.M. sobre el proyecto de comercio de América. 19 February 1765.

72 They had little to say about joint-stock companies other than ‘Las compañias de Caracas, Havana y Barcelona, merecen particular consideración. Pero si alguna de ellas huviere de gozar de privilegio exclusivo, no deberá participar al comercio general’.

73 It abolished the palmeo, the tonelada, the impuesto del Seminario de San Telmo, the derecho de extranjería, the reconocimientos de carenas, the habilitaciones, and licencias.

74 Archivo General de Indias (AGI), Santo Domingo, 2188 – Real Cédula e Instrucción. 16 October 1765.

75 Delgado, ‘El Conde de Ricla, capitan general de Cuba’; Kuethe and Inglis, ‘Absolutism and Enlightened Reform’.

76 Tazzara, The Free Port of Livorno.

77 Kleiser, ‘An Empire of Free Ports’; Kleiser, ‘Free Ports in the Atlantic World’.

78 Challú, ‘Grain Markets, Free Trade and the Bourbon Reforms’.

79 Vallejo García-Hevia, ‘Campomanes y las Nuevas Poblaciones de Sierra Morena y Andalucía’.

80 Astigarraga, A Unifying Enlightenment; Astigarraga, ‘Campomanes y las sociedades económicas de amigos del país’.

81 AGI, Mexico, 2778- Expediente promovido del virrey de Nueva España y arzobispo de México con motivo de las especies de fanatismo difundidas en aquella ciudad de resulta de la expulsión de regulares de la Compañía, Consejo Extraordinario del 5 de marzo de 1768, ff. 47–48.

82 Gálvez, La política americana de José de Gálvez según su ‘Discurso y reflexiones de un vasallo’, 139.

83 Gálvez, La política americana de José de Gálvez según su ‘Discurso y reflexiones de un vasallo’, 137.

84 On this issue, see Tavárez, ‘Colonial Economic Improvement’.

85 Reglamento y aranceles reales para el comercio libre de España a Indias.

86 AHN, Estado, 3188, box 3, vol. 11, doc. 420 – Anonymous, Observaciones sobre el sistema presente de la navegación y comercio de España, y medios que se proponen para fomentar estos dos ramos, f. 3.

87 Marichal, Bankruptcy of Empire, 16–47, chap.1.

88 Klein, ‘The Great Shift’; Klein, ‘La economía de la Nueva España’; Garner and Stefano, Economic Growth and Change in Bourbon Mexico.

89 Newberry Library (NBL), VAULT Ayer MS 1091 – Gálvez, Informe sobre el estado de México, California, Sonora y provincias remotas de Nueva España (1768–1778), 29 March 1778, p. 141.

90 NBL, VAULT Ayer MS 1091 – Gálvez, Informe sobre el estado de México, 157.

91 Brading, Miners and Merchants in Bourbon Mexico.

92 Barbier, ‘The Culmination of the Bourbon Reforms’, 57.

93 For a general overview of the colonial Latin American population, see Sánchez-Albornoz, ‘The population of colonial Spanish America’. On urbanisation, see Borah, ‘Latin American Cities in the Eighteenth Century’.

94 Arroyo Abad, Davies, and Zanden, ‘Between Conquest and Independence’.

95 For a detailed description of this debate, see Baskes, Staying Afloat, 70–77.

96 On the problem of jurisdictional fragmentation and market integration (or lack thereof), see Grafe and Irigoin, ‘Bargaining for Absolutism’; Grafe and Irigoin, ‘A Stakeholder Empire’.

97 In 1798, moreover, Britain captured Trinidad and Minorca. Stein and Stein, Edge of Crisis, 217–220.

98 Castro Leiva, La Gran Colombia; Afanador-Llach, ‘Una república colosal’.

99 Reza, ‘Confederación anfictiónica’; Reza, ‘El Congreso Anfictiónico de Panamá’.