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Yes, it did hit laborers and the lower class hardest. Spain also borrowed a lot. According to economic historian Earl Hamilton, inflation started earlier, but went up a lot in the latter part of the 16th century. He called it the price revolution. I don't understand economics that much, so I don't know how or why this would cause it, but he claims the minting of coinage in the Americas contributed to this. It is a controversial theory, but what makes sense is Spain's economic troubles, especially with losing competitiveness in exporting, could probably be a large reason why the British came into power.scout1067Participant
The traditional explanation for the Spanish decline I have always heard is that Spain bankrupted themselves trying to win the War of the Spanish Succession in the Netherlands. It did not help that because the Spanish monarchs were Habsburgs it is one of the few times outside of recent history that France and England were allied. The French felt surrounded and the English sought to maintain the balance of power on the continent. I can see how inflation would make paying for the war a long term problem. We are going to see the same thing in America within 5-15 years because of our unsustainable debt.PhidippidesKeymaster
We are going to see the same thing in America within 5-15 years because of our unsustainable debt.
That is interesting since I had not heard that as a model for the current American economic climate. Even on this forum we have discussed the parallel between the Roman Empire and America, but perhaps there are other examples through time which better mirror what the U.S. is now going through.scout1067Participant
What I find even more curious is the notion that war can be made to pay for itself. I had that thrown at me last night in semi-drunken bar discussion about the Iraq War, somehow we went from talking about steak to politics. i dont know how that happens. I had to point out that war can be made to pay for itself over the short-term but cannot think of a single instance where war was a long-term profitable enterprise. I also had to refute the notion that America or American companies had made money from Iraqi oil.