History of Spain (1700–1808)

The Kingdom of Spain (Spanish: Reino de España) entered a new era with the death of Charles II, the last Spanish Habsburg monarch, who died childless in 1700. The War of the Spanish Succession (1701-1714) was a European war fought between the proponents of the French Bourbon prince, Philip of Anjou, and the proponents of the Austrian Habsburg claimant, Archduke Charles. After the war ended with the Peace of Utrecht, the Prince of Anjou ruled as Philip V of Spain from 1715, although the peace treaty required he had to renounce his place in the succession of the French throne.

Spain entered a period of reform. Ideas of the Age of Enlightenment entered Spain and Spanish America. The period ended with the invasion of the Iberian Peninsula by Napoleon Bonaparte in the Peninsular War (1808-1814), which upended the stability of the Spanish Empire, and although France was defeated, the turmoil in Spain led to the Spanish American wars of independence of 1808 to 1833, in which most of the empire was lost.

The 18th century in Spanish historiography is often referred to as Bourbon Spain, but this label can be misleading as the Spanish Bourbons returned from exile to reign from 1814 to 1868 (following the restoration), from 1874 to 1931, and since 1975.

The last few years of the rule of the mentally challenged and childless Spanish Habsburg Charles II, were dominated by the politics of who would succeed the unfortunate monarch, the last Spanish king of the Habsburg dynasty. Spain was at the center of this political crisis, but it was the "object not the arbiter." Economic troubles, the decay of the Spanish bureaucracy, a series of defeats in wars against France, and the erosion of imperial institutions in the seventeenth century had left Charles the king of a declining empire, and his physical and mental weakness provided him with little ability to reverse the course of his country. The vastness and wealth of the ultramarine Spanish Empire in the New World and the Philippines, along with her naval resources, had made Spain a vital part of European power politics. If the throne of Spain was to go to a relative of the king of France, or if the two countries were to be united, the balance of power in Europe would shift in France's favor. The wealth of the Spanish overseas empire would flow to France. If it remained in the hands of another member of the anti-French, Austrian Habsburg dynasty, the status quo would remain. European politics at the end of the 17th century became dominated by establishing an orderly succession in Spain that would not alter the balance between Europe's great powers.

Bourbon France and Habsburg Austria and its allies went to war to determine the successor to Charles. The prize was the wealth of the Spanish Empire. The War of the Spanish Succession (1702–14) was won by France, but by the Treaty of Utrecht that ended the conflict, the French and Spanish Bourbon dynasties pledged not to unite formally. Louis XIV of France's exclamation that the "Now there are no more Pyrenees!", after his grandson became Spain's monarch, did not come to pass. Although Charles II's chosen heir inaugurated a new dynastic house in Spain, the Habsburg Spanish empire in Europe was reduced to the Iberian peninsula itself, with the loss of the Spanish possessions in Italy (the Duchy of Milan, Kingdom of Sicily, Kingdom of Naples, and Kingdom of Sardinia) and the Spanish Netherlands, and Britain captured Gibraltar and the island of Menorca as well. The Treaty of Utrecht ended the conflict and Philip V of Spain renounced any claims to the French throne. Before the conflict ended, Philip's young wife, Maria Louisa of Savoy (1688–1714) died, but the Bourbon royal succession was assured with the birth of two sons.

Philip V proved an effective administrator, centralizing the Spanish authority by eliminating regional cortes (parliaments) and beginning a process of making uniform the laws among the various regions of Spain's empire by eliminating special privileges (fueros). The Nueva Planta decrees (1716) dismantled the composite system of rule in Spain, and replaced it with rule from Madrid and unitary Castilian values. If the Austrian Habsburgs had won the War of the Spanish Succession, Habsburg pluralism promised to be continued, leading Aragon to support the losing Habsburg cause. The Nueva Planta decrees eliminated that regional autonomy. "The most enduring achievement of the reign of Philip V was to establish, for the first time since the Romans, a single, united polity."

Also eliminated with the Bourbon dynasty was the Habsburg system of conciliar government, replacing councils with four secretariats, later evolving into ministries: State & Foreign Affairs, Charity & Justice; Army & Navy, and The Indies, i.e., the overseas portions of the Spanish Empire. The four ministers formed a "cabinet council" and ministers were directly responsible to the crown. In general, aristocratic men no longer dominated government positions, but rather men of talent who were then elevated to high position and rewarded with noble titles. Some 200 new titles were created by Philip alone. Administrative reforms included the division of Spain into eight reinos (lit. 'kingdoms') headed by a military official and an audiencia was established for the administration of justice. Local level administrators (corregidores), which had already existed in Castile, were appointed to the other reinos. An important reform was in taxation and royal debt. Some bonds issued by the crown were repudiated while others had their interest rate downgraded. New tax officials were efficient in collecting and administering taxes, to the benefit of the new monarchy. Regions that had not paid taxes at the same levels as Castile were not subject to taxation by the unitary state. Since Spain under the Bourbon monarchs pursued many wars, having a tax base to pay for them was crucial.

Philip's selection of capable French and Italian ministers to key positions in the government reined in independent, isolated, and corrupt ministries that had flourished in the later period of Habsburg rule. Philip aimed at expanding economic activity and moved toward economic freedom, especially regarding Spain's trade in its overseas empire, in theory a Spanish monopoly. Expanding Spanish manufactures and agricultural exports was envisioned, so that trade did not benefit foreign powers who had horned in on the Spanish American trade. The House of Trade, long operating in Seville, was moved to Cádiz in 1717, while the monopoly on trade with the Spanish Empire was also opened to all the ports of peninsular Spain. Philip permitted the foundation of the Basque Caracas Company in 1728, on the model of Northern European trading companies, to trade with Venezuela, a major producer of chocolate. The free trade zone (comercio libre) within the Spanish sphere expanded further with later Spanish Bourbons.