Trade and Empire, 1700-1870

Recent research has downplayed Spanish gains from colonial trade (Prados de la
Escosura 1993). The composition of trade suggests that the possibility of increasing
production by reallocating resources was small, and that most gains possibly resulted
from changing consumption patterns. By 1792, over 60% of retained imports consisted
of cocoa and sugar. Furthermore, these colonial products could have been acquired on
international markets. Consequently, gains from colonial trade would only occur if,
given colonial rule, Spain acquired the same commodities at lower prices. Furthermore,
Spain's dependence on the colonies for raw materials was very small (raw cotton and
dyestuffs only represented 4% of retained imports in 1792). This is of course a measure
of the weakness of domestic manufacturing. In the Catalan cotton textile industry (one of
the most dynamic industries at the end of the 18th century), European cotton yarn imports
were more important than colonial raw cotton imports, suggesting how weak the Catalan
spinning industry was at the time.

Industrial exports, concentrated in a few sectors (textiles: 36.6% in 1792; iron and
steel: 3.2%; paper: 4.4%; and food: 22.3%) stimulated industrial expansion and were
associated with some external economies in their regions of origin. Colonial protectionist
legislation made Spanish manufactures artificially competitive on the Spanish American
market. An upper bound computation suggests that exports of domestic manufactures to
the colonies made a 5% contribution to industrial value added before the Napoleonic
Wars (ibid).

One way of gauging the importance of overseas trade to the economies of
Western Europe is to see what happened when the trade between Continental Europe and
the Americas was suppressed by British blockades after 1807. Crouzet (1964, p. 571)
presents a vivid picture of a deindustrializing Western European seaboard during this
period: "Harbors were deserted, grass was growing in the streets, and in large towns like
Amsterdam, Bordeaux, and Marseilles, population did actually decrease..." Industries
which particularly suffered included shipbuilding, and those processing colonial raw
materials such as sugar and tobacco. A variety of food-processing industries were also
badly affected, as well as cotton printing, but the most important victim was the linen
industry in regions like Western France, Flanders, Holland and Germany. According to
Crouzet (p. 573), the damage done to the outward-oriented Atlantic economy of

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