Labor, in fact, to Spanish pride, was the badge of inferiority, to be escaped in every possible way. It is the general complaint of the publicists of the seventeenth century that every one sought to gain a livelihood in the public service or in the Church, and no one to earn it by honest work. The immense number of useless consumers thus supported was constantly alleged as one of the leading causes of the general poverty, from which the most crushing and injudicious taxation could raise only insufficient revenues. Public offices were multiplied recklessly, and the steady increase in the ranks of the clergy, regular and secular, was a constant subject of remonstrance. In 1626, Navarrete tells us that there were thirty-two universities and more than four thousand grammar schools crowded with sons of artisans and peasants striving to fit themselves for public office or holy orders; most of them failed in this through inaptitude, and drifted into the swarms of tramps and beggars who were a standing curse to the community, while the fields lay untilled for lack of labor, and the industrial arts were slowly perishing, so that Spain was forced to import the finished products which she could so easily have made for herself. This national aversion to labor, moreover, manifested itself in an indolence which, except in Catalonia, rendered the pretense of working almost illusory. Dormer tells us of his compatriots that they did not work as in other lands; a few hours a day, and this intermittently, were expected to provide for them as much as the incessant activity of the foreigner. To these drawbacks on productive industry is to be added the multitude of feast-days, which Navarrete estimates at about one third of the working-days, rising to one half at the critical season of the harvests, — feast-days which, according to Archbishop Carranza, were spent in a debauchery rendering them especially welcome to the devil. Under such conditions it was impossible for Spain to withstand the competition of the foreigner. How rapidly its industry declined is shown by the fact that in 1644 the shipments by the fleet to the West Indies from four cities of Castile—Toledo, Segovia, Ampudia, and Pastrana—amounted to $3,864,750, while in 1684 the total value of all Spanish goods carried by the fleet was only $800,000. It is true that in 1691 Carlos II. proposed legislation to check the overgrown numbers of the clergy and the immoderate absorption of lands by the Church, but his feeble projects were abandoned.

Thus the nation possessed little recuperative power to make good the perpetual losses of its almost continuous foreign wars. Already, in the apogee of its greatness under Charles V., symptoms of exhaustion were not lacking. His election to the empire, in 1520, was an unmitigated misfortune for Spain. Involved thenceforth in the entanglements of his continental policy, the land was drained of its blood and treasure for quarrels in which it had no concern, and of which it bore the brunt without sharing the advantages. So heavy was the load of indebtedness incurred that, on his accession, Philip II. seriously counseled with his ministers as to the advisability of repudiation. Under the latter monarch downward progress was accelerated. Imagining himself to be specially called of Heaven to uphold the threatened Catholic faith, he regarded no sacrifices as too great when heresy was to be repressed. For this he provoked the Low Countries to revolt, leading to a war of forty years, with uncounted expenditure of men and money. For this he incurred the crowning disaster of the Armada, and for this he stimulated and supported the wars of the League in France. Despite the unrivaled resources of the monarchy his finances were reduced to hopeless confusion; he was a constant borrower on usurious terms, and already in 1565 the Venetian envoy reported his annual interest payments at 5,050,000 ducats, which at eight per cent represented an indebtedness of 63,000,000 ducats, — a sum, at that period, almost incredible. When the reins slipped from his grasp, in 1598, his successor was the feeble and bigoted Philip III., and the seventeenth century witnessed the fortunes of Spain in the hands of a succession of court favorites, — Lerma, Olivares, Haro, Nithard, Oropesa, and their tribe, — mostly worthless and grossly incompetent. Financial distress grew more and more acute, aggravated by senseless tampering with the currency, which drove to other lands the precious metals of the New World, until the whole active circulation of the country consisted of a token copper coinage, the value of which the government endeavored to regulate by a succession of edicts of the most contradictory character, producing inextricable perplexity and uncertainty, fatally crippling what productive industry had survived the temper of the people and the wisdom of legislation.