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Military Entrepreneurs and the Spanish Contractor State in the Eighteenth Century

Author(s):Sánchez, Rafael Torres
Reviewer(s):Agudo, David González

Rafael Torres Sánchez, Military Entrepreneurs and the Spanish Contractor State in the Eighteenth Century. Oxford: Oxford University Press, 2016. xxii + 297 pp. $100 (hardcover), ISBN: 978-0-19-878411-1.

Reviewed for EH.Net by David González Agudo, Vancouver School of Economics, University of British Columbia.

Rafael Torres Sánchez, professor of Economic History at the University of Navarra, has tackled an interesting topic that fits well in the current state-building debate: the relationship between military entrepreneurs and the Spanish monarchy in the eighteenth century. This well-known scholar of war, states and economic development tries to determine whether the Spanish mobilization of military resources helped improve the country’s economy or hindered it. The so-called “second contractor state interpretation” addresses military entrepreneurs’ effectiveness in pushing the state to “go further” (p. 8) in the production and distribution of markets.

Torres Sánchez approaches the issue from four different perspectives: 1) He first dives into eighteenth-century Spain’s military supply policy, whose priority was never the development of a supply method (direct administration or contract with private entrepreneurs), but the procurement of supply itself by means of pragmatic decisions. 2) In the second section, the author uses signed contracts, correspondence, and notarial protocols to look at the negotiation processes within the Spanish army and navy victualing, where the state saw no problem switching back and forth from administración (direct administration) to asiento (contract with private entrepreneurs). 3) Focusing on the navy, Torres Sánchez aims at determining whether or not a “fiscal-naval” state existed in Spain, as it happened in England. To do so, he analyses how Spain’s military entrepreneurs participated in the development of the world’s second biggest fleet. 4) The last section assesses the Spanish contractor state’s efficiency in an urgent and particular military action, the Minorca expedition of 1781-1782.

The book tells a twofold story. On one hand, the Spanish military supply system of the eighteenth century was apparently successful, giving way to the involvement of private entrepreneurs. This permitted a mutual collaboration between the state and Spanish businesspeople. Both parts, sharing mercantilist beliefs, benefited from their relation and somehow contributed to reinforce the national production of military provisions. The state did so through investment policies in shipbuilding, as well as in textile and iron-and-steel factories. The contractors played their part in it by purchasing most of supplies within the country and its territories. Torres Sánchez underlines the consequent emergence of several opportunities for Spain’s economic development: an improvement in the geographical integration, with a greater domestic and colonial circulation; a more effective redistribution of income, offering more opportunities than ever to local sectors and areas; and a strengthening of the business elites that brought about new prospects.

On the other hand, Torres Sánchez argues that the relationship between the state and military entrepreneurs was risky and unsteady. This mutual reliance, materialized in privileges and monopolies, ended up shutting out other potential businessmen and production systems that otherwise would have been beneficial for the whole economy. The state was not interested in constructing a competitive market for its military entrepreneurs, who became increasingly conditioned by the government’s finances. How this came about is shown through the case of several Spanish financiers, traders and companies such as Francisco Medinueta (chapter 4), or the Cinco Gremios Mayores of Madrid (chapter 5). This impeded the state from advancing in the production and distribution of markets. Unlike Britain, the Spanish Bourbons preferred to trust a business elite rather than exerting an administrative control of the military entrepreneurs. This leads the author to describe the “strange paradox” of the Spanish eighteenth century (p. 111): in the first half the government applied absolutist policies that encouraged a gradual development of monopolistic entrepreneurs; in the second half, as a free-trade stage was taking shape, the crown again resorted to anticompetitive measures.

We have, in sum, an excellent book that provides good Spanish “victuals” for thought and that contributes very substantially to the understanding of the link between warfare and modern state construction. Torres Sánchez sagely highlights the constant rivalry between European countries as the driving force behind the connection between the emergence of modern states and the growth of military activity. Historical competition between states in Europe is precisely one of the reasons argued nowadays by some economic historians to answer the basic questions on the Great Divergence debate: “why Europe conquered the world” (Hoffman, 2015), or “why the Industrial Revolution did not happen in China” (Mokyr, 2017). According to Joel Mokyr, fragmentation and competition within the European continent led to a “cultural change” that sparkled the Industrial Revolution. Philip Hoffman highlights the role of the rapid development of gunpowder technology and the military sector in the establishment of European colonial empires and industrialization. Embedding Torres Sánchez’s work in this recent discussion would be highly desirable.


Philip Hoffman, Why Did Europe Conquer the World? Princeton, Princeton University Press, 2015.

Joel Mokyr, A Culture of Growth: The Origins of the Modern Economy, Princeton, Princeton University Press, 2017.

David González Agudo is a Postdoctoral Fellow at the Vancouver School of Economics, University of British Columbia. His main area of research is economic history, with a focus on the reconstruction of economic and demographic variables in early modern Spain. He is author of “Housing and the Cost of Living in Early Modern Toledo” (2014), with Mauricio Drelichman, in Explorations in Economic History.

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Subject(s):Government, Law and Regulation, Public Finance
Military and War
Geographic Area(s):Europe
Time Period(s):18th Century