Spanish real wages in the Northern-Western European mirror, 1500-1800. On the timings and magnitude of the Little Divergence in Europe

Abstract

The aim of this paper is twofold. First, to present a new estimation of real wages for Early Modern Spain with regard to a subsistence line -understood as a theoretical minimum of consumption necessary to meet basic human needs and to sustain an active life. Second, to contribute, with new evidence, to the debate on the economic divergence before the Industrial Revolution. In broad terms, our results describe a general picture of low real wages in Spain in the long run, although there are regional variations in levels and timings that challenge previous perceptions, particularly in the case of urban Castile. In terms of international comparisons, our data suggests different chronologies and magnitudes of the Spanish divergence. As we attempt to demonstrate, two issues conditioned the dimension of the gap on real wages between Spain and the European North-Western core, as displayed in the recent literature. The first is related to the available Spanish evidence; the second deals with some methodological choices in the composition of the subsistence baskets –namely, the “oatmeal effect’. The question we discuss here is whether the Spanish Little Divergence was as great and early as it has been suggested; or, turning it around, whether the European North-west was, in respect of real wages, so exceptional before 1800. Calculations will show that the divergence did not appear clearly until the early 18th century, and that North-western European real wages for labourers were not that far from the bare subsistence line as they appeared to be. Our paper provides some different responses to the issue of the timing of the Spanish divergence and questions the conventional wisdom on its magnitude.