The Economics of Wool

The Economics of Wool


The year 1492 marked a watershed for Spain.  The conquest of Granada and the expulsion of the Jews had far-reaching consequences.  Centuries of conflict came to an end; so did centuries of religious tolerance.  Spain became a nation-state characterized by centralized autocratic government, a homogeneous population, and a theology that allowed for no deviation.  It was also a nation-state badly in need of gold.

The only way of getting that universally acceptable means of payment was through the export of wool,, a crop produced in a context of extreme economic disparity and hardship.

Ferdinand and Isabella had used the long war against the Moors to strike down the political power of the noblemen, but not their economic power.  The nobility, about two percent of the population, owned ninety-five percent of the land.  The peasants were not serfs: they had the right to leave their fields.  But that freedom has been called “the freedom to die of hunger.”  There was nowhere for them to go.

The sheep of Spain, some three million of them, belonged to the Mesta, the sheep raisers’ corporation, which was really a state within the state.  Every spring, these vast flocks of sheep were driven from the high plains of Castile to the mountains of Galicia and Leon for summer grazing.  In the fall they were brought back.  They had a guaranteed free passage.  The sheep walks could not be enclosed by the peasants, who twice a year saw their land despoiled and their woods cut down by the Mesta shepherds.

The wool went to Flanders for gold, and the Mesta paid no one for the damage done to the land.  No one but the King, who got tax monies, and the noble owners, who reaped profits, received anything back.

This, then, is a very brief sketch of the economics of Spain at the end of the fifteenth century: half-starving peasants and noblemen holding enormous estates: townships humbly obedient to an aggressive enormous monarchy and Church.  The country was criss-crossed by millions of hungry sheep like a permanent plague of locusts.  Wool was the national export but the wool trade brought in diminishing returns, and the damage to the land began causing repeated famines at home.

It was no wonder that envious eyes looked at the riches form commerce, and at the easy prosperity that the trade in spices and gold had brought to Venice, and was bringing to Portugal from its trading stations along the African coast.

The “Catholic Monarchs” felt they had a role to play in the world that could neither be financed by their miserable peasants nor by the Mesta alone.  The stage was set for Columbus and the conquistadors who came after him.

Hans Koning, Columbus: His Enterprise, 17-18