The eighteenth century
There were many intellectuals and politicians who, from different parts of Spain and Portugal set out their economic ideas in the eighteenth century, particularly in the second half, and there were also several institutions, such as scientific academies and economic societies of friends of the country, who took upon themselves the task of spreading the basic principles of the emerging economic science.
In the case of Spain, the Society in the vanguard of creating a chair of political economy was the Real Sociedad Economica Aragonesa de Amigos del Pais in 1784. Economists were also aware of the relevant contributions by foreign authors, such as the French (Forbonnais, Herbert, the physiocrats, and Necker), the British (the political arithmeticians and Smith), the Austrian and Prussian (the cameralist literature), or the Italian (Galiani and Genovesi), not to mention the legacy from the Iberian arbitristas.The most representative economists, and those whose writings were translated into other languages, were the following three: a) Jeronimo de Uztariz, whose Theorica y Practica de Comercio y Marina (Theory and Practice of Commerce and the Navy, 1724) was translated into English by John Kippax (1751 and 1752), into French by Forbonnais (1753), into Italian (1793), and also into German (1753); b) Pedro Rodriguez de Campomanes, whose Discurso sobre el Fomento de la Industria Popular (Discourse on the Encouragement of Industry for the People, 1778) was translated into Portuguese (1778), German (1778), Dutch (1780 and 1790), Italian (1787), and Tagalog (1793); and c) Gaspar Melchor de Jovellanos, whose Informe (Report on the Agrarian Act, 1795) was translated into French (1806 and 1808), English (1809), Italian (1815), and German (1816). The French and English editions were summarized by renowned economists such as James Mill and McCulloch.
We can add another name to this trio of economists, someone who is half way between the eighteenth and nineteenth centuries, Juan Lopez de Penalver. In his Reflexiones Sobre la Variation del Precio de Trigo (Reflections on Price Variations in Wheat, 1812) Lopez de Penalver used mathematics and thus can be considered as one of the European forerunners of its application to the study of economic issues.The main subject of debate of these economists was the Agrarian Act, the promotion of manufacturing, fiscal reform, and trade liberalization, both domestic and colonial. This latter question was of great importance and had as its starting point the criticism of the colonial regime, which during the reign of the House of Austria was a monopoly characterized by the centralization of all trade in just one port, Seville, and by a system of fleets which organized the entry and exit of two fleets, one for New Spain and the other for Tierra Firme. King Philip V, the first Spanish Bourbon, implemented a few modifications on imperial policy, which did not substantially disturb the traditional colonial system. The Consulate and the Casa de Contratacion (Trade Contracts Tribunal) were transferred to Cadiz in 1717. In 1720 the regulations for fleets and galleons was published permitting one-off registers (that is, private individuals who joined up with the fleet or who could travel when convenient). The fiscal system was modified through the introduction of the right to “palmeo” (measurement by palms) as a replacement for “almoja rifazgo” (tax on exported goods). Finally, companies were created with trade privileges which limited the Cadiz monopoly.
Although Bernardo de Ulloa, Jose Campillo, and Bernardo Ward dealt with the colonial question in the first half of the eighteenth century, the economist who proposed a more radical change in imperial policy was Campomanes, who made a synthesis of his thought in a work written in 1762 and entitled Reflexiones sobre el Comercio Espanol a Indias (Reflections on Spanish Trade with the Indies).
Inspired and influenced by a diversity of authors such as Joseph Child, Charles Davenant, Nicolas Barbon, Gregory King, John Carey, Mirabeu, Montesquieu, and Ulloa, Campomanes proposed in his Reflections a new arrangement of the relations between Spain and her colonies. He proposed a return to the free trade practices that had prevailed before 1543. He attributed the misfortunes of the colonies not only to a one-port monopoly, but also to some restrictions such as the setting up of trade companies. The aim of colonial trade should not be to obtain precious metals or fiscal benefits, but rather, to stimulate the economic development of the metropolis.To achieve these new objectives, Campomanes made the following proposals: abolition of the exclusive right bestowed on the port of Cadiz, abolition of the system of fleets and galleons, setting up of a fleet of separate ships, reduction in the tariff for Spanish products and abolition of palmeo and tonnage taxes, and withdrawal of the privileges granted to commercial companies.
Campomanes' proposal influenced the more liberalizing regulation passed between 1765 and 1789. There was one author, Valentin de Foronda, who in his Cartasobre lo Quedebehacerun Principle Quetenga Colonias a Gran Distancia) (Letter on the Obligations of a Prince with Far-Off Colonies), written in 1800 and published in 1803, proposed the possibility of selling the Spanish colonies in America.
Eighteenth-century Spanish economists were aware of the writings coming from Europe and some of these works were translated into Spanish, as mentioned above. However, a gap began to appear as regards the quality and relevance of national contributions, when compared with the outstanding innovations made in other European contexts, which proved crucial for the development of modern political economy. Spanish authors kept a rather low profile on theoretical issues, showing a noticeable preference for studies on applied economics.