In global terms, early modern Madrid exported far less than it imported, and consumed much more than it produced.51 An artless apologist inadvertently highlighted this fact in 1658 when he wrote, “… [O]nly foreigners work on the goods used by the capital, and this very fact proves that all other nations labor for Madrid, the overlord of all other capitals since all of them work for her and she serves none.”52 In other words, the Habsburg capital, like the rest of the country’s major cities, was economically and politically formidable, yet grossly dependent on its external suppliers. The latter certainly included converso merchants. Consonant with the inward orientation of the greater urban economy, Madrid’s strongest industries did not cultivate foreign demand for their products and services. For example, the crafts of embroidery, gilding, and tailoring thrived only because they transformed imported materials into luxury goods for local courtiers, government officials, and aristocrats.53
Madrid’s evolution was semichaotic and largely unplanned, hence the city was a grim and uncomfortable place. A majority of its residents were of modest means and lived in squalor, while a significant minority of wealthy denizens lived in private pockets of great luxury. High officers of the church and the royal bureaucracy, influential courtiers, members of the upper nobility, foreign dignitaries, and a handful of affluent merchants comprised the urban elite. Members of this moneyed class were the only ones (besides the royal family) who could afford to own mansions with stone facades, expensive carriages, and protective cocoons consisting of guards and servants.
In terms of its physical appearance, seventeenth-century Madrid offered an array of contrasts between superpatriotic fantasies of Spanish power, wealth, and dignity on one hand, and the reality of economic distress and social disorder on the other. There was considerable irony, for instance, in the fact that the physiognomy of the so-called Capital of Two Worlds (the “Old” and the “New”) was the product of a relative negligence.54 As Madrid’s population expanded during the 1600s, the city’s avenues, alleys, and footpaths developed haphazardly, forming dark and confusing passages.55 With the exception of a few main concourses, all streets were unpaved and therefore extremely dusty or muddy depending on the season.56
Plain structures of gray brick and earth dominated the city’s drab landscape owing to the fact that limestone and other choice building materials were scarce. High municipal taxes all but prohibited the construction of second stories.57 Most city homes were therefore indecorously low. In addition, a majority of residential dwellings had small, paper-covered holes instead of paned windows because the price of glass was beyond the means of ordinary builders, not to mention the residents themselves.58 These tiny holes limited the penetration of dust, rain, and extreme temperatures into domestic spaces. Yet the holes also made for dim interiors and could seldom prevent the entry of an endemic stench—the smell of stagnant refuse. As many travelers to the Spanish capital observed, the total absence of a municipal system of waste disposal meant that most madrileños dumped their excrement and other trash in the open. Favorite dumping sites included portals, main thoroughfares, and street corners.59 In addition to fomenting disease, ubiquitous garbage gave the capital an unenviable reputation among foreigners as the filthiest city in Europe.60
If Madrid’s endemic filth indicated that the city had swelled to unmanageable proportions, periodic disasters provided conclusive proof that the city’s sheer size invited total chaos. Epidemic diseases gestated in the unsanitary conditions of the slums, causing many casualties. The fire of 1631 destroyed much of the city’s central promenade and marketplace, the Plaza Mayor. It also killed a dozen people and sparked three days of flagrant looting of the surviving property.61
The plunder could not have come as a surprise, for despite the city’s intense economic activity and sheer economic weight, poverty plagued virtually all areas of the capital. Indigence had become so deeply entrenched over the course of the seventeenth century that there existed an entire underclass of desperate madrileños, including beggars, street thieves, prostitutes, and all manner of transients—pilgrims, demobilized soldiers, and the like. A disdainful observer complained, “The streets of Madrid … are [always] crowded with vagabonds and loafers who while away the time playing cards, waiting for the soup kitchens of the monasteries to open or to get ready to ransack a house.”62 With similar contempt, a journalist grumbled in 1637 that no one in the capital was safe after sundown because of the large numbers of criminals who prowled the streets.63 A class of metropolitan pícaros, then, was not a mere figment of the literary imagination of social satirists; it was an all too real reminder of the harsh reality of the time.
The educated pamphleteers known as arbitristas were among the most eloquent observers of Madrid’s condition.64 Several of these polemicists perceived what modern historians have identified as basic faults in the metropolitan economy. For instance, in 1616 the city magistrate Mateo Lopez Bravo argued that the maldistribution of wealth had worsened the economic inefficiency of Madrid by creating too many idlers at the top and bottom of the socioeconomic hierarchy.65 For their part, the French travelers Barthélemy Joly, Antoine de Brunei, and Francois Bertaut (who were not arbitristas) pointed out in 1604, 1655, and 1659, respectively, that Madrid, like Spain as a whole, seemed incapable of producing and accumulating wealth. These tourists’ writing paints the insatiable metropolis as a mere channel through which American gold flowed to Spain’s European competitors while the latter funneled their manufactures into Spain.66
Recent scholarship has confirmed the basic accuracy of assessments such as Brunei’s, yet it has also corrected a tendency of the arbitristas, of foreign observers, and of several historians to overstate the gravity of the Spanish crisis. New research has shown that while an economic depression was certainly real at the national level, it affected different Iberian regions differently, at different times, and was not always so deep that it embraced all aspects of local economies.67 Even wars, for instance, did not cause a cessation of Spanish international trade, not even with Spain’s wartime enemies.68
Though mired in poverty and crime, Madrid had a bustling economy because it was the economic and political nerve center of the Iberian Peninsula. The court alone was an enormous consumer of imports. So too was the large urban population that served it. As the hub of a complex economic system, Madrid had unparalleled access to the wealth of Spain and its far-flung possessions. In return for the service of governing the Habsburg Empire, the city received a host of taxes and revenues. By offering lucrative and prestigious governmental offices, Madrid also attracted nobles from the provinces who brought rents from their estates to the city. The resulting concentration of wealth in the capital was unprecedented in Spanish history. This concentration meant that Madrid had an equally unprecedented power to attract vast resources from beyond the Iberian hinterland. Simply put, Madrid became an enormous consumption-oriented market, and thus a giant magnet for long-distance trade.69 As we shall see in subsequent sections, Madrid provided commercially inclined New Christians—including Portuguese immigrants, native Spanish conversos, and especially returning exiles of both groups—plentiful opportunities to make a living, even in periods of economic depression.
Beyond Madrid, there were other areas of Spain (encompassing Portugal until 1640) that were economically viable, if not always prosperous, and therefore especially attractive to conversos during the seventeenth century. Seville, the gateway to the riches of the New World, stood apart as the most economically vibrant pivot of the realm. Further inland, a few medium-sized cities functioned as the axes of peninsular commerce. Valladolid remained the economic center of the Leonese province despite the city’s loss of preeminence after a brief stint as the seat of the Habsburg court (1601–4).70 Burgos and Bilbao were main links in the northern trade routes that covered the Basque country and Old Castile. In particular, Bilbao enjoyed a relative reprieve from the hardships that beset major economic centers in the Peninsula because it was a main exporter of iron (crucial for arms manufacturing in an age