Yes, they did, but it was not inflation as we know it, because prices didn’t rise as fast as they do today.
However, in those days they called it the Price Revolution, which they blamed on the Spanish and then called it the Spanish Price Revolution. Basically, it was a series of economic events that occurred between the second half of the 15th century and the first half of the 17th century.
In those days they blamed price rises, which today is called inflation, that spread across Europe for a century and a half, on the Spanish.
Today we would not be worrying as over a 150-year period prices rose on average by just 6 times! We would say there is nothing to worry about, unfortunately, in those days’ things were very different as even a small price rise made life very difficult for the ordinary person.
So, what happened?
Basically, it started when the Spanish ships started discovering gold, which, of course, they bought back from the new world.
Nobody had ever seen so much gold, and, of course, it led to the same old story, too much money, chasing too few goods. The classic definition of inflation.
As a result of their exploration the Spanish bought back so much gold and silver from the new world, that they became overwhelmed.
In those days the name they gave to all forms of metal such as gold or silver as well as other metals such as nickel and copper, was “Specie”.
As this Specie started flowing through Spain, it had the effect of making prices rise. This gave the Spanish a balance of payments problem, which they used their gold to clear down. To them it seemed simple, but it had the effect of damaging the economies of the other countries in Western Europe. This increased the monetary supply, which had the effect of increasing prices across Europe, while, at the same time, there was a population explosion. According to theory, this is inflation, too many people with too much money chasing too few goods.
The Spanish were not totally to blame
They got the blame as in Europe they were not popular, but it could be claimed it wasn’t all their fault. You see at this time the population was growing, and this was nothing to do with Spanish gold.
Basically, over this period Europe’s growing populations were needing more food, clothes and, of course, houses.
Unfortunately, food production could not keep up with this population growth, this also drove up prices, and had nothing to do with the Spanish. Therefore, until the mid-17th century, there were more people to feed than food available, which meant that many people had to live in permanent hunger. The result was price rises.
Now as always happens when politicians can’t solve a problem, they need someone to blame, and the Spanish were sitting with all this gold. No politician could resist it, it was obviously the Spaniards fault, so they called it the Spanish Price Revolution. It appears they got away with it!
The effect of the Black Death
It could be argued that it was the effect of the Black Death that really led to the price revolution. You see it dramatically reduced populations across Europe, therefore as the nation’s began recovering and their populations started regrowing, they needed food.
Unfortunately, farm workers also died in the Black Death and it took nearly 150 years for their numbers to catch up. This meant that it took until the mid-17 hundreds for there to be enough food to meet the needs of the population.
When did it end?
By 1640 the price rises started to melt away as the impact of the New World wealth slowly diminished and food production met demand.
Prices then stayed static until the 18th Century, now that is another story.
Did you have realised that inflation, in its different forms, has been around us for all this time, the only difference is that today the figures are bigger.
Isn’t history fun?
10 questions to discuss:
- What was the economic phenomenon during the 15th to 17th centuries that caused prices to rise across Europe, and what was it commonly referred to as?
- What was the primary factor attributed to the Price Revolution during this period?
- How did the influx of gold and silver from the New World contribute to the economic situation in Europe?
- What term was used to refer to all forms of metal, including gold and silver, during this period?
- How did the increase in the supply of money affect prices across Europe?
- Besides the influx of gold and silver, what other factors contributed to the Price Revolution?
- How did the Black Death impact the population of Europe, and how did this contribute to the economic situation?
- What role did food production play in exacerbating the economic challenges during the Price Revolution?
- When did the Price Revolution start to subside, and what factors contributed to its decline?
- How does the Price Revolution compare to modern-day inflation, and what are some similarities and differences highlighted in the text?
For more on this go to:
https://www.worldatlas.com/articles/what-was-the-price-revolution.html
https://www.worldatlas.com/articles/what-was-the-price-revolution.html
https://tontinecoffeehouse.com/2022/08/01/gold-inflation-and-spanish-decline/
© Tony Dalton