Prior of Crato, 70
professional armies, 26–27. See also military revolution
profitability of lending to Philip II: alternative scenarios and their effects on, 178–80; compared with returns on other assets, 207f, 209f; correlates of, 186–90, 187f, 188f, 189t, 190t; by family, 183–86; measurement of, 173–78; net of defaults, 180–83, 192t; net overall, 192–94; over time, 190–92. See also contingent lending to Philip II; lending to Philip II; MIRR (modified internal rate of return); rate of return
profit index (PI), 175, 177–78, 188, 188f
property rights, 53, 247, 253n18, 278–79. See also absolutism; state capacity
puertos secos. See dry ports
Pufendorf, Samuel von, 26, 272
Quevedo y Villegas, Francisco de, 20
quicksilver. See mercury
quinto real. See royal fifth (tax)
Quiroga y Vela, Gaspar de, 199n35
Raleigh, Sir Walter, 64, 126
Ramsey taxation, 253n18, 258, 280
rate of return, 32t, 173–78, 192–94, 207f, 209f. See also interest rates; IRR (internal rate of return); MIRR (modified internal rate of return)
Reagan, Ronald, 135
Reconquista, 46, 74–75, 79–80
reconstruction of yearly revenues. See revenue
reforma de mercedes (1480), 47
Reinhart, Carmen, 1, 118n8, 140, 143, 190, 271, 279
renegotiation: and banker expectations, 171, 232; and calculation of lending profits, 178–86; and settlement after defaults, 6, 37, 63, 92, 95, 102, 109–10, 114, 134, 140, 145n18, 146, 167, 171, 232; speed of, 1, 17, 40, 109. See also Compañía del Medio General; contingent lending to Philip II; default (generally); defaults of Philip II; medio general; profitability of lending to Philip II; rescheduling
renta de la seda (tax), 85
repeat lenders, 149–51, 150f, 173–210. See also lending to Philip II
reputation (in models of debt), 139–44, 144t; empirical tests of, 135; lending to Philip II as evidence in favor of, 135, 273–74; and market power, 159–60. See also sanctions (in models of debt)
Requesens, Luis de, 62, 156. See also Dutch Rebellion/Revolt/War (Eighty Years’ War); Sack of Antwerp
rescheduling: of asientos, 99; through contingencies or bankruptcies, 39; as de facto insurance, 241; and excusable default, 230, 275; frequency of, 178; by medio general, 32, 111; through negotiation, 167, 275; never of juros, 159; and profitability, 181–83, 275; and upholding spirit of agreements, 134. See also contingent lending to Philip II; defaults of Philip II; profitability of lending to Philip II; renegotiation
resguardo, juros de. See collateral
resource curse: and “Dutch disease,” 264, 267; institutional consequences of in Spain, 263–70, 272, 277, 280; and mineral-rich countries, 266t, 267; and oil producers, 266t, 267; silver and, 263–69, 264f, 265f, 266t
restructuring period, 32t, 33
returns. See rate of return
revenue: annual series of, 88–89, 88f; growth rates of, 120–23. See also taxes
Richelieu, 257, 259, 272
risk sharing, 2, 213–14, 220, 229, 278–79. See also contingent lending to Philip II
Robinson, James, 41n79, 50n13, 74n1, 265
Roda, Gerónimo de, 157–58
Rogoff, Kenneth: on constant recontracting, 38; on debt intolerance, 190; on need for sanctions to sustain lending, 137, 139–41, 144t, 160n34. See also serial default hypothesis; This Time Is Different
Rome, 23, 26, 133n2
Roosevelt Corollary, 138. See also Monroe Doctrine; sanctions
Rose, Andrew, 138
Rosenthal, Jean-Laurent, 253n18
royal fifth (tax), 67, 87, 95, 98, 232–33
royal patronage, right of, 48, 81
Rudolph II, 63
Ruiz Martín, Felipe, 22
Russia, 43, 255–56, 255f, 256f, 266t
Sack of Antwerp (1575), 37, 63, 151, 155–56, 156f, 159. See also Dutch Rebellion/Revolt/War (Eighty Years’ War)
Saint-Quentin, Battle of, 13, 19, 58
sales taxes, 29, 76–77, 83–84, 88, 102, 206, 240, 268. See also alcabala (tax); taxes
Salinas family, 183, 186
sanctions (in models of debt), 136–39, 273–74; and alternative smoothing mechanisms, 137–141, 160; Sack of Antwerp as an erroneous example of, 37, 134, 152, 159, 170–71; and servicing of Fugger debts by Philip II, 168; testable predictions of, 143–44, 144t; unobserved in equilibrium, 142. See also Monroe Doctrine; reputation (in models of debt); Roosevelt Corollary
Santa Hermandad, 47
Sanz Ayán, Carmen, 12n14, 101, 111
Sauri family, 16, 186
Savastano, Miguel, 118n8, 140, 190, 279
Schiller, Friedrich, 14n18
Schmalkaldian War, 95n33
Schmitt, Carl, 14n18
Scotland, 30, 257
Sebastian of Portugal, 69
securitization, 3, 96, 208–10
sentiment of lenders, 144t, 151, 171–72, 271. See also bankers: supposed irrationality of; Braudel, Fernand; This Time is Different
serial default hypothesis, 31, 118n8, 190, 246, 279
Serra family, 186
servicio (tax), 76, 82
servicio de los ocho millones (tax), 84, 89
servicio y montazgo (tax), 85
settlements (after default). See defaults of Philip II; medio general; renegotiation
Seville, 50, 67–68, 81, 86–87, 199, 211–12
short-term debt service. See debt service: of asientos
Sicily, 57, 60, 244, 260
Siena, 24
silver: facilitation of war by, 267–69; from Indies, 20, 51, 56, 85–88, 193, 200, 272; juros and, 98; piracy threat and, 87, 211; remittances of, 7, 28–29f, 39, 89, 102, 104, 119, 244t, 255f, 256f, 265f; and resource curse, 263–69, 264f, 265f, 266t; revenue and exclusive control by king of, 42, 67, 87, 277; and royal fifth, 67, 87, 95, 98; smuggling of, 67, 87; and sovereign borrowing, 39, 145, 213–14, 228–30, 233; transport of, 86–87, 89, 145; weakened bargaining power of Cortes due to, 267–69, 277. See also asientos; fleets; royal fifth (tax)
Simancas, Archive of, 22, 94f, 100, 152n25, 170, 203, 272
Singer, H. W., 263
smuggling, 67
sovereign debt: cost of (see debt service); and excusable defaults, 39–40; as intertemporal barter, 141, 167, 213, 228; in modern times, 2, 136–37, 230; noncontingent, 213–14; origins of markets for, 23–31; risks for holders of, 133–34. See also contingent lending; debt service; reputation (in models of debt); sanctions (in models of debt)
sovereignty, origins of, 24–26
Spain: and Black Legend, 155n29; as composite state, 257–59. See also Aragon; Castile
Spanish bankers, 100, 148–49, 152, 164, 203–4
Spanish Fury. See Sack of Antwerp
Spanish Inquisition. See Inquisition
Spanish Road, 19, 72. See also Dutch Rebellion/Revolt/War (Eighty Years’ War)
Spinola family, 145–47; Agustín, 10–12, 164, 167–68, 194–95, 208, 216; Ambrosio, 12, 16; anticipation by of default, 239; central role of, 161, 162f; and contingency clauses, 216–17; Lorenzo, 163n38
standing armies, 26–27. See also military revolution
Stasavage, David, 24, 25n56, 77n11
state capacity, 7, 29–30, 43, 48, 257–61, 262; and absolutist agenda, 253n18, 257–260; Besley and Persson on, 7, 28, 33, 254; and Church influence, 48; and consensually strong executive, 257, 269–70; versus constraints on the executive, 252–61; and dry ports, 85, 259; effect of silver inflows on, 263–69; in England, 244–46, 244t, 252–61, 255f, 256f; lack of, in Spain, 252–61, 255f, 256f, 272; measured by tax revenue, 244–46 (244t), 252–61 (255f, 256f); and nation-building, 30; and pre-existing heterogeneity, 161–63. See also absolutism
States General (of the Netherlands), 62, 63
Stein, Barbara, 245n3
Stein, Stanley, 245n3
swaps. See juros
s
ubsidio. See three graces (taxes)
subsistence income, 121
sumiller de corps, 13
supersanctions, 138
sustainability of debt (generally), 119–20; effect of principal reductions on, 106, 124–25; IMF approach to evaluating, 120–22; relative to revenue, 119f; through reputation, 139–43; through sanctions, 137–39; vs. solvency, 106
sustainability of debts of Philip II, 34–35, 129–31; annual fiscal accounts, 112–19; bankruptcies, 109–12; effect of victory in Low Countries on, 126–29, 130f; IMF approach to evaluating, 120–22, 122t; military expenditure undermining, 43, 106–8, 142, 262; robustness of calculations of, 112, 123–26; short-term debt service and, 108–9; sustainable debt paths and, 40–41. See also fiscal policy reaction functions; lending to Philip II; reputation (in models of debt); sanctions (in models of debt)
Swart, Koenrad Wolter, 156n30
Sweden, 26
Switzerland, 127, 256
syndicated lending, 3, 142, 146, 164–65, 168–70. See also network lending
Szentes, Balázs, 167, 172, 214
tariffs, 28–29, 258–59. See also customs; dry ports; state capacity; taxes
taxes: ability to collect, 254, 258; burden of, 28–29, 243–58, 256f; collected through the Church, 83; and demesne income, 28, 74, 78, 133; direct, 82; distribution of revenue from, 28, 29f; and domestic opposition, 262; of European powers, 29f, 243–58, 255–56f; exemptions from, 29; farming of, 83, 88, 91, 111, 229, 260; on income, 28, 261; indirect, 28, 83–85; ordinary and extraordinary, 78, 82, 88f, 93, 98, 102, 196, 218; servicios, 82, 196, 218; shortfall and contingencies, 215, 215f, 224–28, 224t, 227t, 228f; on silver, 87. See also alcabala (tax); arrendamiento; contingent lending to Philip II; customs; derecho de las lanas (tax); dry ports; encabezamiento; renta de la seda (tax); revenue; royal fifth (tax); sales taxes; state capacity; servicio (tax); servicio de los ocho millones (tax); servicio y montazgo (tax); tercias (tax); three graces (taxes)
Temin, Peter, 246n4
Templars, Order of, 132–34
Tenochtitlan, 54–55
tercias (tax), 83, 259–60
tercios (Spanish army units), 47, 127
Thirty Years’ War, 258
This Time Is Different (Reinhart/Rogoff), 17–18, 31, 32t, 33–34, 139, 143, 144t, 240, 271–80
Thomas, Robert Paul, 41n79, 278–79
three graces (taxes), 83, 196n28, 259
tierras baldías, 78
Tilly, Charles, 24, 27, 256, 261
Tomz, Michael, 137, 139, 274
Tordesillas, Treaty of, 46
Torvik, Ragnar, 265
Tower of London, raid on, 253
trace italienne, 26. See also military revolution
transfer stop, 37, 143, 151–59, 152t, 171, 274; and Flanders, 168, 170. See also Genoese bankers; Conklin, James
transpersonal states, 24–26
treasure fleets. See fleets
tres gracias. See three graces (taxes)
tyranny of distance, 68
Ulloa, Modesto, 21, 22n48, 100–101, 111, 145n16
unemployment, 2
Unión de las Armas, 257–58
United Kingdom. See Britain
United States, 27, 250
usury laws, 17, 23, 97
Van Huyck, John, 140, 142, 213n3, 231
van Wijnbergen, Sweder, 264
Vázquez de Prada, Valentín, 152
Venice, 24–25, 135
Verdier, Thierry, 265
Vervins, Peace of, 66
Vicens Vives, Jaime, 278
Villalar, Battle of, 29, 52
Vivaldo, Adán de, 164
Vizcaya, 258, 260
war: in the age of Philip II, 56–66; cost of, 26–31, 36–37, 53; economic effects of, 30; finances and success in, 37, 143, 152–59; frequency and duration of, by century, 27t; makes states and states make war (Tilly), 256. See also military revolution; individual conflicts
War of the Holy League, 19, 57, 60, 62n34, 107
War of the Spanish Succession, 41, 49, 249
Waterloo, Battle of, 43
Welser banking dynasty, 53, 93, 167n46
Westphalia, Peace of, 61, 269
William of Orange (William the Silent), 62–63, 127–28
Williamson, Jeffrey, 246n4
wool, 50, 85, 206, 267. See also derecho de las lanas (tax); servicio y montazgo (tax)
Wright, Brian: and anarchic environment, 36, 159; and “cheat-the-cheater” mechanism, 36, 141–42, 144t, 170, 171; and intertemporal barter, 167, 213
Wright, Mark, 139, 140, 167, 214
Zacatecas, 56, 86
Zechem, 153
Zeeland, 127, 158. See also Netherlands
Zierikzee, 155
THE PRINCETON ECONOMIC HISTORY OF THE WESTERN WORLD
JOEL MOKYR, SERIES EDITOR
Growth in a Traditional Society: The French Countryside, 1450–1815,
by Philip T. Hoffman
The Vanishing Irish: Households, Migration, and the Rural Economy in Ireland, 1850–1914,
by Timothy W. Guinnane
Black ’47 and Beyond: The Great Irish Famine in History, Economy, and Memory,
by Cormac Ó Gráda
The Great Divergence: China, Europe, and the Making of the Modern World Economy,
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The Big Problem of Small Change,
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The Strictures of Inheritance: The Dutch Economy in the Nineteenth Century,
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Understanding the Process of Economic Change,
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Feeding the World: An Economic History of Agriculture, 1800–2000,
by Giovanni Federico
Cultures Merging: A Historical and Economic Critique of Culture,
by Eric L. Jones
The European Economy since 1945: Coordinated Capitalism and Beyond,
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War, Wine, and Taxes: The Political Economy of Anglo-French Trade, 1689–1900,
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Power and Plenty: Trade, War, and the World Economy in the Second Millennium,
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Power over Peoples: Technology, Environments, and Western Imperialism, 1400 to the Present,
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Unsettled Account: The Evolution of Banking in the Industrialized World since 1800,
by Richard S. Grossman
States of Credit: Size, Power, and the Development of European Polities,
by David Stasavage
Creating Wine: The Emergence of a World Industry, 1840–1914,
by James Simpson
The Evolution of a Nation: How Geography and Law Shaped the American States,
by Daniel Berkowitz and Karen B. Clay
Distant Tyranny: Markets, Power, and Backwardness in Spain, 1650–1800,
by Regina Grafe
The Chosen Few: How Education Shaped Jewish History, 70–1492,
by Maristella Botticini and Zvi Eckstein
Why Australia Prospered: The Shifting Sources of Economic Growth,
by Ian W. McLean
Cities of Commerce: The Institutional Foundations of International Trade in the Low Countries, 1250–1650,
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Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II,
by Mauricio Drelichman and Hans-Joachim Voth
t, Taxes, and Default in the Age of Philip II (The Princeton Economic History of the Western World)
Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II (The Princeton Economic History of the Western World) Page 39