When the last of her Habsburg rulers died in 1700, Spain, in the words of José de Gálvez, was ‘hardly less defunct than its dead master’. ‘With dominions more extensive and more opulent than any European state’, the country lacked roads, industry and commerce. The population had declined by a million and a half in the last hundred years. Agriculture was in decay. The administrative system was chaotic, the currency in confusion, and the treasury bankrupt. And if, in the New World, it might almost be said that there was ‘no peaceful desart yet unclaimed by Spain’, the Spanish American empire seemed to survive more by the forces of habit and inertia, and by the mutual jealousies of the European powers, than by any internal strength of its own. If it was not, as was sometimes thought, ripe for plucking or on the brink of collapse, nevertheless there is abundant testimony to its political, social and economic ills. The devastating report written for the information of the crown in 1749 by the two young naval officers Jorge Juan and Antonio de Ulloa, though dealing, it is true, with but a part of the colonial world, is a classical example.

Yet in the years between the War of the Spanish Succession and the Napoleonic invasions of the Iberian peninsula Spain herself rose with remarkable resilience from the decrepitude into which she had fallen in the seventeenth century. Her economic decline was first arrested and then reversed. Her administrative system was overhauled, centralised and modernised, on French and absolutist lines.