Day of Empire_ How Hyperpowers Rise to Global Dominance--And Why They Fall - Amy Chua [75]
A church institution led by the Dominican order and vested with draconian powers, the Inquisition was charged with purifying the country of heretics. Interestingly, “heretics” referred not to openly practicing Jews or Muslims but rather to false Christians. Starting in 1480 the Inquisition began hunting down, trying, and often torturing and executing conversos who despite their professed Christianity were universally suspected of secretly practicing Judaism. Soon, however, Spain would turn to the business of eliminating every Jew and every Muslim from its territory.
In 1492, Ferdinand and Isabella issued their famous decree giving Jews the choice either to convert to Catholicism or to leave Spain within four months. According to one estimate, 200,000 Jews left Spain, roughly 120,000 of them going to Portugal and the rest to Italy and the Ottoman lands. In 1502, the Muslims of Castile were ordered to convert or emigrate. Almost all chose to convert, creating a massive new group called Moriscos. A similar decree soon followed for the Muslims of Aragon. In 1526 the Inquisition began prosecuting Moriscos for failing to practice Christianity. The Spanish monarchy had officially embraced intolerance, and for an empire hoping to rise in global preeminence, this was a staggeringly bad move.7
The first wave of the Inquisition decimated Spain's converso population. In Valencia between 1494 and 1530, nearly one thousand converses were convicted of “judaizing” and sentenced to death. In Seville over roughly the same period, an estimated four thousand converses were burned at the stake. Terrified, tens of thousands of converso families fled.
The mass exodus of Spain's converses and Jews left a catastrophic financial vacuum. Castilian culture did not favor finance or trade. There was a distinctly anti-entrepreneurial streak among Spain's Castilian elite, who exalted instead the warrior, the priest, and the aristocratic landowner. Nevertheless, before 1492, foreign bankers played virtually no role in Spain. As the Spaniards themselves saw it, “[0]ur kings…did not need bankers foreign to the kingdom. The Abrahams, Isaacs, and Samuels sufficed.” This domination of finance by Jews and converses was in many respects a healthy state of affairs: Jews had a powerful interest in maintaining the strength of the Spanish state, on which they depended for their protection. Throughout the fourteenth and fifteenth centuries, this symbiotic relationship served the Spanish kings well. By the end of the 1400s, the Spanish crown united under Ferdinand and Isabella was one of the richest in Europe, and Spain “the greatest power on earth.”
But by attacking its Jews and conversos, Spain destroyed its own primary source of credit and thereafter became completely dependent on foreign bankers, including the Dutch, the Germans, the French, and especially the hated Genoese (“white Moors,” as a resentful Spaniard called them). The price of capital increased. As early as 1509, the Genoese were making loans at such high rates of interest that the archbishop of Seville sought to ban them, but Ferdinand sanctioned them on grounds of necessity.
Within a few decades, Genoese bankers controlled the provisioning of the Spanish fleet, and “[f]oreign bankers ran the Crown's finances.” This dependence on foreign financiers was particularly perilous because these were the years of Spain's most aggressive imperial expansion, particularly in the Americas, with naval expeditions and warfare calling for seemingly limitless sums of money. Hence the ironic emergence of an empire that was essentially insolvent even as it discovered and exploited the vastest reserves of precious metals yet encountered.8
The fantastic gold and silver mines of Central and South America poured their ore onto Spanish ships, but the ore was pledged in advance to foreign bankers who had financed the ships, the army, and the luxurious opulence of the Spanish crown. Royal bankruptcies occurred in 1557 and 1575. Suddenly, the crown reawakened to the utility of Jewish financiers.
In 1580, Spain absorbed