THE LIBRARY OF IBERIAN RESOURCES ONLINE
Madrid and the Spanish Economy
David R. Ringrose
Chapter 4
The Urban Economy in the Eighteenth Century: Occupations, Income, and Consumption
 
 

[66] The conventional perception of Madrid's economy is summarized succinctly by Ramón de Mesonero Romanos' quip that the capital's most important industry was "the manufacture of reputations (hacer las reputaciones) for all parts of the realm," with tailoring and tertulias the important support activities. (1) This was a fairly accurate assessment, and government and tailoring were by far the largest industries in the eighteenth-century capital. Mesonero Romanos was not the first to make the observation, and Madrid's economic structure clearly reflects a perennial relationship between its urban functions and the larger world. Its most prominent features were a large, poorly paid service sector and a landed and bureaucratic elite that controlled a huge share of urban income and constituted the focal point for the city's economic life. Madrid's function as a producer of political and social services is starkly outlined in its occupational structure. (2)

I. Occupations
 
Detailed analysis of wealth and occupation has barely begun for Spain, and there is little work based on tax records, wills, estate inventories, and marriage contracts of the kind well known in England and France. (3) The sources [67] used for Madrid in this study are governmental and fiscal in nature, and consequently biased toward under reporting. Nevertheless, the data have compensating advantages, since they come from the Castilian Catastro of the 1750's, a source compiled all at one time using standard guidelines, a fact which gives the data a unique coherence. The fact that the Castastro measures incomes rather than accumulated wealth also offers wider prospects for understanding the urban economy. The end result is as precise a survey of an urban economic structure as we have for any large pre-modern community.

The occupational structure of mid-eighteenth-century Madrid is summarized in Table 4.1. It is based on an analysis of almost 42,000 income recipients listed in the Catastro, and ignores the traditional distinction between lay and clerical populations. (4) The conventional classification into primary, secondary, and tertiary sectors does not tell us much about pre-modern economies, and occupations have been grouped here into more relevant categories. (5) The nearly 42,000 income recipients equal almost 30% of the estimated population of 142,500 for 1757. This is a fairly high proportion, but corresponds with the large adult population documented in Chapter 3 and is reiterated in the census of 1804.

The occupational structure that emerges offers a concrete example in support of our general assumptions about the economic orientation of bureaucratic and patrimonial cities. (6) The landed elite and government employees account for over 10% of income recipients--a figure that includes clerks and doormen as well as royal ministers, widows with rooms to let as well as grandees. If one includes the clergy in the controlling elite, as does Gideon Sjoberg, it accounted for 21.6% of income recipients. (7) The dependence of the city on this elite is apparent in the structure of the rest of the workforce. The legal, medical, and teaching personnel outside of the government, including [68]
 
 

Table 4.1. 
Distribution of Economically Active Population by Occupational Sector, Madrid, 1757
 
Occupational Sector Number(a) % of active population
Royal and city government 3,000 (est.) 7.06%
Church-related 4,829 (est.) 11.36
Propertied persons 1,351 3.18
Professions(b) 1,758 4.14
Business and financial 1,952 4.49
Food industries 2,674 6.29
Construction 6,732 15.84
Manufacturing 7,325 17.23
Personal service 12,990 30.86
Sources: See Part I of Appendix C and Table C.1.
a. Because of the way the sources are constructed, the total excludes small groups of clerics, hospital staffs, and possibly untitled persons with income apparently wholly from extra-urban sources.
b. Professions include law, medicine, and teaching.
 their assistants and minor employees, constituted just 4% of the workforce. The entire mercantile sector as identified by contemporaries--merchants and agents, clerks and porters--included only 4.5% of the total. This figure includes only part of retail commerce because of the blending of retailing with manufacturing in the guild sector. Some "artisans" were in fact wealthy capitalists with large commercial enterprises; the silversmiths, iron merchants, and other metal suppliers stand out in this regard. Other craftsmen, such as tailors and shoemakers, fit the conception of guildsmen engaged in small-scale production of custom-made products for final consumption. As defined by contemporaries, the artisan sector included 17% of Madrid's economically active population, considerably more than the 12.5% estimated for Castile, and thus reflected the capital's concentration of special markets. (8)

Since the diverse artisan sector included everything from silversmith-jewelers with over 50,000 reales in yearly income to apprentices with only 300, a more detailed breakdown is very instructive (see Table 4.2). Well over half of the manufacturing population worked in luxury trades--precious metals, quality clothing, leather goods, and similar products. Classically an industry of transformation to consumer demand, tailoring was the largest craft, with 1,369 individuals. It was followed by shoemaking, a similar craft with 880 masters and employees. The inherent structure of these trades and the small [69]
 

 Table 4.2. 
Distribution of Manufacturing Population by Type of Product, Madrid, 1757
 
Type of Product No. of Persons Active % of Industrial Sector
Quality textiles, leather, final products 3,273 44.7%
Precious metals, jewelry 820 10.7
Mechanical and metallurgical 1,449 19.8
Rough textiles, leather, semi-finished goods 1,296 17.7
Miscellaneous crafts 487 6.6
Sources: See Part I of Appendix C and Table C.1. Section C of Table C.2 illustrates the diversity and number of skilled occupations involved.
 

size of most other craft guilds shows that the industrial structure was shaped almost entirely by the internal market of Madrid itself--a market that, as we shall see, was extremely narrow. The other large guilds--locksmiths, bakers, carpenters, cabinet-makers, and master builders--were associated with either construction or food supply, activities that by their nature were confined to geographically immediate markets.

Not surprisingly, construction was the largest single industrial activity, with 16% of the workforce. A fourth of construction workers were skilled-- master builders, carpenters, window and door makers, stone-cutters, etc.-- while the balance consisted of unskilled or semi-skilled day laborers and transporters. The dependence of this industry on government and the monied class is obvious. While we have no study of building activity in eighteenth-century Madrid, it was an age of urban expansion and reconstruction. Only large institutions and the wealthier segments of the elite had sufficient capital for the investments implied. While the participation of the nobility in urban real estate has yet to be explored, it is suggestive that the city's titled residents drew income from urban real estate in excess of 10 million reales a year. Assuming that this represented a 5% return, it implies property assets of 200 million reales. Thus the construction industry was not just inherently oriented to the urban market, but depended directly on the investment abilities of its wealthy elite.

Food processing, with 6% of the workforce, was also dependent on the urban economy for markets, but in a broader way. Two-thirds of the participants in this sector dealt in basic commodities--the bread, wine, oil, and meat that absorbed most of the buying power of the poor. Here, too, certain industries dominate the scene--notably baking, with 970 persons, and wine [70] distribution, with 487 taverneros and bodegoneros. Among them, 120 master bakers and the wholesale wine brokers had substantial incomes. The remaining third of the food industry handled luxury foods such as fresh vegetables, milk, eggs, fruit, sugar, and chocolate. In general, the food industry reflected derived demand based on the overall distribution of urban income, rather than the direct demand of the wealthy elites. It is also the economic sector most directly linked with Castilian agriculture and thus has considerable importance in explaining the failure of the Madrid market to stimulate much development in the interior.

By far the largest segment of the workforce (30%) was devoted to service in the literal sense--hairdressers, entertainers, and above all, household servants and unaffiliated men-for-hire (gente de librea). Virtually all descriptions of society in Madrid dwell on the overstaffed noble houses, the use of servants in very modest households, and the hundreds of unattached able-bodied men in the city. (9) The Catastro confirms these accounts with an emphasis that makes the most exaggerated accounts credible. It also accords with our previous chapter's evidence of the city's attraction for young and unmarried adults who fit the customary requirements of personal service.

The numerical preeminence of the servant and bureaucratic classes in Madrid's workforce (about 40%) is clear enough, but its importance becomes apparent when Madrid is contrasted with commercial and industrial Barcelona. Although its categories are different from those of the Catastro, the census of 1787 reflects the same structural traits in Madrid as the earlier source, and at the same time permits direct comparison of the two cities (see Table 4.3). Thus, while minor differences between the two cities would stand little scrutiny, larger ones provide useful contrasts. The hidalgo, criado, and bureaucratic groups as defined in this census constitute 62.7% of the economically active population in Madrid, compared with only 28.7% in Barcelona. Conversely, artisans, manufacturers, and laborers composed only 27.5% of Madrid's workforce, compared with 47.8% in Barcelona. Since the Barcelona census includes the entire corregimiento, elimination of the agricultural labradores around the city would heighten the contrast.

Madrid's occupational structure clearly shows that the economy was not only shaped by its primary functions, but that the orientation of the economy to those functions was extremely strong. Political and social center of the empire, Madrid had an occupational structure ill-equipped to supply goods and services for the regions of Castile that provided its basic supplies. The structure of the workforce indicates that the city produced little that was not [71] destined for internal consumption, and thus the city contributed few exports to onset the cost of its imports. (10)
 
 

Table 4.3. 
Occupational Structures of Madrid(a) and Barcelona(b) in the Census of 1787
Occupational Category Madrid  
 

No. Active                                % of Active Pop.

 Barcelona 
 

No. Active %      of Active Pop.
Crown, military 5,566 11.1% 375 1.1%
Hidalgos 8,545 17.1 259 0.8
Rentiers -- _ 5,122 15.0
Inquisition, etc. 69 0.1 764 2.3
Students 734 1.4 2,113 6.3
Professions 854 1.7 441 1.3
Merchants 898 1.8 344 1.0
Artisans, manufactures 7,030 14.0 6,102 18.3
Day laborers 8,928 11.7 9,492 28.5
Criados 17,313 34.5 3,804 11.4
Labradores 102 0.2 3,981 11.7
Registered population 149,546(c) 124,323
Active population (d) 50,113 33,351
% of population 
economically active		 33.5% 26.8%
Sources: For Madrid: RAH, Censo de Floridablanca, leg. 9/6235. For Barcelona: Josep Iglesias, ed., El cens de Comte de Floridablanca, 1787: Parte de Catalunya, pp. 49-51.

a. Madrid figures for 1787 are not directly comparable with those of 1757, because of the differences in the two censuses.

b. Figures for Barcelona are for the corregimiento, including nearby rural areas. The population of the city proper was around 95,000.

c. The total registered population of Madrid differs from source to source, depending on whether the first or second tally is used and whether one uses the official totals or those on the barrio returns. Totals vary from 147,500 to 149,500.

d. Active population does not here include members of religious communities, secular clergy, nor the transients given in the Barcelona sources. Hidalgos are included, although this may involve some double counting, especially in the government-employee category. Rentistas do not appear in the Madrid count, and it is assumed that they are subsumed within other categories.
 

Table 4.4. 
Distribution of Income by Occupational Sector, Madrid, 1757
Sector % of Workforce % of Urban Income % of Adj. Income(a) % of Adj. Income(b)
Government 7.06% 32.08% 22.25% 21.74%
Church 11.36 6.80 4.72 9.22
Hospitals -?- 1.23 .86 .84
Propertied 3.18 8.73 36.69 35.84
Professions 4.14 3.52 2.44 2.39
Business and finance 4.59 9.05 6.28 6.14
Food industries 6.29 6.54 4.45 4.44
Construction l5.85 5.54 3.84 3.75
Manufacturing 17.23 13.34 9.25 9,04
Service 30.56 11.24 7.80 7.62
Sources: See note 12 and Part II of Appendix C. Table C.2, C.3, and C.4 illustrate the data from which income estimates were compiled.
a. Adjusted for known rental income of titled residents as of 1809, deflated by Hamilton's price indices.
b. Adding to the first adjustment the arbitrary assumption that extra-urban clerical income equaled clerical income from within the city.
 

II. Income
 
The domination of the urban economy by political and land-owning elites comes into sharper focus when we examine the distribution of income among [72] occupations, as shown in Table 4.4. (11) The Catastro includes only income from sources within the jurisdiction of Madrid and is based on a combination of direct survey and standardized assumptions: Incomes are overstated at the lower levels because of the assumption of regular employment in an economy readily affected by seasonal conditions. Extra-urban income was recorded where it was produced; consequently the inc me of the rentier class is distorted by the way in which the Catastro was compiled. And the income of most nonsalaried persons is also likely to be understated, because officials had to rely on what they were told by people who assumed that the survey was connected with taxes.

The first adjustment in Table 4.4 incorporates estimates of extra-urban income of the city's titled nobility. It is based on municipal sources of 1800-10, deflated by the New Castilian price index. The second adjustment illustrates [73] the effect of the further assumption that the extra-urban income of religious institutions equaled their urban income, a condition undoubtedly closer to reality than the unadjusted figures. The taxes that supported the Court and the bureaucracy were extra-urban in origin, but are recorded as salaries paid to employees within the city. Among the laboring classes, the conventional daily wages of the Catastro match those documented by Earl Hamilton, but the conventions regarding days of employment during the year are questionable. (12) The hierarchy of relative income size thus appears reliable, while the sectoral distribution of income both verifies and explains the occupational structure.

The 10% of the economically active population supported directly by the state and by land-owning received 41% of the income generated in the city and 60% of income after adjustment for extra-urban sources. If the clergy are included in the elite, 21.6% of income recipients controlled 48% of the income generated in Madrid and 64-67% of all disposable income. (13) Given the downward biases in the sources, this has to be a low estimate. The mercantile and professional sectors, with 8.7% of recipients, were credited with 12.5% of the income produced in Madrid. Because no adjustments could be made for their extra-urban income, their share of the adjusted total falls to 8.5%. But this is the class historians look to for rural investment; and to the extent that they had investments outside the city, their relative importance is understated. It is worth noting, however, that their income from urban real property was slight. Only the 182 lawyers obtained even 10% of their income from urban real estate--which suggests that the understatement of income inherent in the sources may not be great. The landed and business groups were numerically about the same; and although business income was overshadowed by the total income of the rentiers, the business sector controlled a larger share of intra-city income. Since this wealth was less likely to be committed to long-term obligations, the importance of the business sector in urban society was greater than the adjusted figures in Table 4.4 indicate.

Below the commercial and professional groups, income disparities rapidly [74] become extreme. Artisans and food suppliers were as numerous as clerical, titled, business, and professional elements combined; but while the latter enjoyed 75% of total urban income, they got only 13.5%. Furthermore, many crafts included individuals of substantial wealth, indicating even greater disparity within the poorer sectors. This part of society had virtually no income from urban real estate, and is unlikely to have had extra-urban rents. Manufacturing may have produced extra-urban earnings through commerce--and to the extent that Madrid profitably exported its products, industrial income is understated. The distortion is minor, however, since as late as 1789 only 6,500,000 reales worth of goods left the city, and the profit from that volume of sales was too small to have much effect on the distribution of income. (14) Construction and personal service were at the bottom of the income structure; most people in these categories were at best semi skilled and easily replaceable. With 46% of the total work force, these groups shared only 11% of adjusted urban income. Thus the distribution of urban income by occupational sector clearly reveals the dependence of the urban economy on political and residential functions.

If the sectoral distribution of income documents the relationship of the city's political and aristocratic functions to its economic structure, the overall distribution of income defines the city as a market for external suppliers and links its economic structure with its demographic patterns. These points are illustrated by the distribution of income in each occupation, as given in Table 4.5, and by Table 4.6, which cross-tabulates income levels with numbers of recipients. Both tables use the adjustments for extra-urban rents of the landed elite, but exclude the arbitrary estimate of extra-urban clerical income.

While the mean recorded income was about 6,300 reales, the median income was about 1,450. Nearly 70% of the population had incomes below 2,000 reales, accounting for less than 13% of the total, while about 1% of incomes exceeded 40,000 reales and comprised more than 40% of the total. These disparities have little meaning out of context, and the one useful comparison comes from England. English income distribution is considered to have been very uneven in the eighteenth century, and that inequality remained constant until after World War I. Figure 4.1 compares income distribution in pre-industrial and modern England with that of eighteenth-century Madrid, where the disparities emerge as far more extreme. (15) Figure [75] 4.1 is really an abstract portrait of a small, well-defined elite which created a narrow market for luxury goods and specially made items and supported a large service class with very little buying power. (16)

This abstract picture can be given some quantitative substance by combining data from the Catastro with prices and wages for the 1750's and various accounts of daily diets to estimate plausible annual food budgets (see Table 4.7). (17) The basic daily diet included a pound of bread, 60 to 100 grams of meat, a small quantity of chickpeas or dried beans, a little salt pork, and an ounce or two of olive oil. (18) While wine was a popular beverage, contemporary accounts do not list it among the basic essentials, and there was great variation in the quality and combination of even the most basic items. Eaten as bread at breakfast and bread stew (puchero) for lunch and dinner, this dreary diet cost 920 reales yearly for two adults in mid-eighteenth-century Madrid.


 
[76] Table 4.5
Distribution of Income by Occupational Sectors in Madrid, 1757
Income Level (in reales)
Sector 0-1,000 1,001-1,500 1,501-2,000 2,001-3,000 3,001-4,000 4,001-5,000 5,001-7,500 7,501-10,000 10,001-15,000
Propertied and titled persons (a) - - - 645 137 - - 357 -
Government (b) - 450 - 250 - 450 - 225 600
Legal, medical, etc., professions 24 498 45 100 - 381 499 - 149
Church and monastic persons, excl. servants 2 46 2617 52 109 759 16 13 10
Business and mercantile, incl. servants 688 189 - 95 - 180 11 92 245
Crafts: precious metals 178 57 234 31 4 8 103 107 75
mechanical and metallurgical 539 270 201 16 21 103 135 127 22
textiles and leather, finished and lux 442 1,089 793 225 167 1 476 6 75
textiles and leather, intermediate 346 333 40 100 26 17 146 183 89
miscellaneous 144 115 13 - - 15 98 63 8
Food: basic foodstuffs 537 398 - 242 108 - 224 - 26
luxury foods, spices, etc. 129 88 148 25 68 - 36 17 128
Construction 4,630 712 751 10 166 5 205 117 9
Skilled services, entertainment 245 44 - 275 289 37 46 5 11
Unskilled and day labor, servants 2,851 8,363 306 347 - 12 - - -
Totals 10,755 12,652 5,148 2,413 1,095 1968 1,995 1,312 1,447
 

[77] (Table 4.5 cont.)
 
Income Level (in reales)
Sector 15,001-20,000 20,001-40,000 40,001-60,000 60,001-175,000 175,000-350,000 350,000-3,500,000 Over 3,500,000 Total
Propertied and titled persons (a) 20 - 38 76 32 39 7 1,351
Government (b) 330 635 60 - - - - 3,000
Legal, medical, etc., professions 23 50 2 - - - - 1,771
Church and monastic persons, excl. servants 2 - 2 - - - - 3,628
Business and mercantile, incl. servants 137 264 25 - - - - 1,926
Crafts: precious metals - - 22 - - - - 819
mechanical and metallurgical - 39 - - - - - 1,473
textiles and leather, finished and lux 16 - - - - - - 3,290
textiles and leather, intermediate 2 10 - - - - - 1,292
miscellaneous 10 36 - - - - - 502
Food: basic foodstuffs 160 8 - - - - - 1,703
luxury foods, spices, etc. 14 134 - - - - - 787
Construction 103 10 - - - - - 6,718
Skilled services, entertainment 60 40 3 - - - - 1,055
Unskilled and day labor, servants - - - - - - - 11,879
Totals 877 1,226 152 76 32 39 7 41,194
a. Propertied and titled persons distributed as per adjustments to the Catastro for total rent figures of 1808, discounted 30% as per first adjustment in table 4.4
b. Distribution of governmental incomes represents a tenative estimate, excluding the immediate royal household
 
 

[78] Table 4.6 
Distribution of Recipients and Income by Income Level, Madrid, ca. 1757 (a)
Recipients
Income level (in reales) No. % City Income % of Recipients Cumulative Income
0-1,000 10,755 26.1% 3.11% 26.1% 3.11%
1,001-1,500 12,652 30.7 6.09 56.8 9.20
1,501-2,000 5,148 12.5 3.47 69.3 12.67
2,001-3,000 2,413 5.9 2.33 75.2 15.00
3,001-4,000 1,095 2.7 1.48 77.9 16.48
4,001-5,000 1,968 4.8 3.41 82.7 19.89
5,001-7,500 1,995 4.8 4.88 87.5 24.77
7,501-10,000 1,312 3.2 4.17 90.7 28.94
10,001-15,000 1,447 3.5 7.02 94.2 35.96
15,001-20,000 877 2.1 5.92 96.3 41.88
20,001-40,000 1,226 3.0 14.17 99.3 56.05
40,001-60,000 152 0.5 3.78 99.8 59.83
60,001-175,000 76 0.2 3.44 100.0 63.27
175,001-350,000 32 0.1 3.24 100.1 66.51
350,001-3,500,000 39 0.1 20.02 100.2 86.53
Over 3,500,000 7 0.02 13.49 100.22 100.02
Totals 41,194 100.22% 100.02%
a. Incorporates the suggested adjustments in the text, including the hypothtical distrubution of government employees and adjusted incomes of titled nobility. Additional adjustments for extra-urban rents would no doubt increase the proportion of the middle ranges (5-40,000 reales) and reduce somewhat the proportion attributed to the very wealthy, but would still serve primarily to illustrate the extremes of income distribution which characterized the city. By these figures, the mean median income was about 6,300 reales, while the median income was slightly under 1,500 reales. The percentages do not total exactly 100% because of the need to round off decimals in the calculations.

 

To food we can add 60-70 reales per year for a single tenement room. (19) Ramón de la Cruz presents these quarters in detail, describing a two-story building with a small patio and a fountain for water and laundry. With seven rooms on each floor and two more in the attic, this tenement housed 13 households and 23 persons. The depiction includes only one child; but even at  [79] that low economic level, three households had servants. (20) An eyewitness description from 1836 presents a four-story tenement with awide range of rents, temporary living stalls in the hallways, and 62 households in one building. (21) Allowing for food, housing, wine, clothing, and miscellaneous items, [80] the median income of 1,450 reales barely supported two adults and left little leeway for temporary unemployment or unstable food prices--no strangers to the poor of the city. (22)
 

 
Table 4.7 
Estimated Annual Food Costs per Person in Madrid, 1750s
Example Cost of Basic Diet Cost of Diet with Wine, Fruit, Spices, Vegetables
Moderately affluent house hold, 7-10 persons, incl. children and servants 797 rs. 920 rs.
Bakery, 10 adult working men 806 l,117 (a)
Bakery, 6 working men and boys 280 590 (a)
Typical diet of the 1820s at 1750s prices 460 770 (a)
Sources: Food prices and descriptions of diets taken from the citations in note 19. 
a. Based on per-capita wine consumption, as calculated in Chapter 6.
 

This rough estimate of the cost of survival provides a yardstick that gives some meaning to the income of more affluent groups. It indicates that a family of four or five required 3,000 to 4,000 reales yearly to enjoy more than minimal food, housing, and clothes, and 5,000 reales to achieve a measure of "bourgeois" comfort. In the professions, the 381 surgeon-barbers averaged about 4,800 reales per year; the 182 lawyers 5,900; and the 85 medical doctors 13,500, as did business agents. Wholesale merchants and the 278 members of the Five Greater Guilds ranged from 17,500 to 37,000 reales per year, the latter being the average of the 28 members of the Gremio de la Seda (Silk Merchants Guild). The 129 bakery owners and 28 wine wholesalers averaged 18,000 per year, and the 22 jewelers in the Silversmiths' Guild more than 50,000 reales per year. Among the artisans, a few trades show a considerable concentration of wealth--the 15 brass and bell casters, 24 wrought-iron suppliers, 22 wax and candle sellers, and 14 dyers averaged 25,000 to 35,000 reales. In most guilds, masters with their own shops had comfortable but more modest incomes of 6,000 to 12,000 reales per year. In contrast, masters without shops and working for wages were credited with 1,200 to 2,200 reales, depending on the trade. Journeymen were paid somewhat less, giving [81] them incomes that put a family at the subsistence level. The tradition that journeymen were unmarried was due to more than guild regulation. (23)

That is the context in which 645 propertied widows averaged 2,900 reales yearly, and 357 owners of urban mayorazgos received around 9,200. At midcentury the salary of a royal councilor was 40,000 reales, reaching 90,000 by 1790. (24) The 120 resident titled nobles averaged 44,000 reales in city-derived income, while the comparable figure for the 53 resident grandees was 140,000 reales per year. With adjustments for extra-urban land rents, 46 grandees had annual incomes over 350,000 reales, and 7 of them exceeded ten times that figure. Roughly 300 families, 0.8% of income recipients, enjoyed incomes over 40,000 reales and accounted for 40% of all income received in the city. Below this extremely wealthy group was a "middling class" of about 3,600 families with incomes between 10,000 and 40,000 reales; some 3,300 families with between 5,000 and 10,000 reales; and about 3,000 with between 3,000 and 5,000. Thus the "middling class" of the largest city in Spain at best included no more than 10,000 households. This class formed the demographic core able to sustain households and reproduce in the urban context, in contrast to the young, single, or childless immigrants entering low-income niches in the service sector and unskilled occupations. The result is in sharp contrast with the growing market at the "middling class" level in England, and a very small arena for the producer using capital-intensive mass production.

III. Consumption
 
Eighteenth-century Madrid thus constituted a market in which at least 70% of incomes hovered around the subsistence level. Judging by the percentage of the population that was economically active and the high proportion of young adults, the poor survived because they were single or because more than one member of the household worked. (25) These were the apprentices, day laborers, gente de librea, water carriers, sweepers, rag collectors, porters, refuse movers, washerwomen, and peddlers who appear in the poor relief records, in the Catastro, and in the depictions of the playwrights. (26) They were also those immigrants who entered the urban workforce because there was [82] even less room for them in the countryside. This segment of society consumed most of the basic supplies entering the city, and a decline in their real wages or employment meant forgoing all other commodities in the search for food.

At the other extreme, perhaps 7,000 incomes permitted the bourgeois comforts of an apartment with several rooms; a diet including fruit, vegetables, and sweets; and a cook, a houseboy, and two maids. Such a life-style implied a budget of 2.000 to 3,000 reales just for food, and another 1,000 for servants, plus the cost of clothes, transport, tutors, and other accoutrements of respectability. (27) Moreover, a large share of urban income went to families so wealthy that basic needs represented a small share of their expenses, leaving them insulated from fluctuating food prices. This explains why, as noted in Chapter 3, the core of the urban population appeared demographically stable in the face of crises that caused serious distress in the economically marginal "envelope" of urban society.

Thus Madrid's occupational and income structures point to an urban market with definite characteristics. They imply consumption of large quantities of a few basic commodities--wheat, meat, fuel, wine--and small but stable amounts of higher-priced foodstuffs, such as condiments, fish, fresh vegetables, and fruit. The low incomes of most inhabitants, and the sharp disparities in income distribution, also suggest that the demand for semi-luxuries and low-quality manufactures fluctuated greatly with real income. Such a market was extremely sensitive to the interplay of harvest yields in supply zones, the size of the city relative to the supply system, and the ability of the urban elite to pay their bills and support marginally useful domestics.

Although they are often hard to disentangle, the city was susceptible to two types of economic crisis. When events reduced elite income, incomes dependent on elite demand also declined; thus a crisis in the political and economic systems of the monarchy affected all levels of urban society. Regional subsistence crises, on the other hand, affected primarily the food supply, driving up prices and drawing disposable income to essential commodities with little impact on the habits of the wealthy. Thus regional subsistence crises aggravated disparities in income, since the living standards of the wealthy were less affected. Despite their interaction, the two patterns must be kept in mind, since they reflect Madrid's position in Spain's dualized economy.

The actual structure of urban demand is documented by a resumé of 1789. (28) Imports ranged from 1,500,000 bushels of wheat and 38,000 tons of [83] charcoal to 105 silk petticoats and 103 bushels of rye. There are many omnibus headings such as "spices," "munitions," and "trinkets and costume jewelry of little value" registered in bales, boxes, casks, dozens, and pounds. Only 14 items are recorded as exports or re-exports, 11 of them in small quantities (e.g., 1,860 sheets of painted wallpaper; 326 pounds of lacquer). Two of the larger exports were 335,000 decks of playing cards and 112 tons of saltpeter, both from royal monopolies. Books were the only private-sector export of consequence, destined for the protected market for religious tracts and prayer-books in Spanish America. The internal orientation of Madrid's industries is shown here by the fact that printing and playing cards involved only 700 out of 12,000 artisans.

The significance of this emerges when imports are linked with prices to create an approximation of their relative importance in the market. The results indicate an overwhelming urban trade deficit in which an estimated 433 million reales worth of imports was offset by only about 6-7 million reales worth of exports.

To obtain this estimate, imports were grouped as (1) basic subsistence commodities (wheat, barley, wine, meat, fuel); (2) other foods and beverages, colonial products, and raw materials; and (3) semi-finished products and manufactures. Various sources were checked for prices to attach to commodities. (29) Prices were found for about 100 items that were on the imports list or were close substitutes. The goods that could be priced cost urban consumers a minimum of 325,000,000 reales. If this represents 75% of the value of all imports, the minimum total paid for imports was 433,000,000 reales for the year. (30) By contrast, urban exports amounted to only 6-7 million reales. This omits unrecorded goods exported by villagers and transporters, but evidence indicates that these were negligible. (31)

The massive trade deficit was financed not by providing commercial and industrial services, but by the power of the city's elites to transfer rents, taxes, and tithes for dispersal in the capital. Government salaries and pensions [84] totaled 45 million reales in 1757, and 100 million by 1790, not including the expenses of a garrison of 7,000 to 10,000 soldiers. The 192 titled families in the city in 1757 received 100-110 million reales in income from extra-urban sources. (32) The Duke of Osuna offers a typical example of private revenue transfers: During 1650-1700, one-third to one-half of his expenditures were in Madrid, approaching 400,000 reales annually and including 3 million reales for a new palace. Typical of the blurring of public and private income, the palace was reputedly paid for with "profits" from the Duke's service as Viceroy in Milan. (33) With over 3,000 religious personnel and dozens of endowed institutions, the clerical contribution to the city's deficit of payments was also considerable. (34) These fragmentary figures demonstrate the dependence of the urban economy on the state and on the private and clerical rentier elements in the capital.

This massive imbalance in Madrid's trade highlights an important aspect of the city's failure to stimulate economic change in its hinterland. Unlike Barcelona or London, which imported, processed, repackaged, and re-exported many goods for both hinterland and long-distance markets, Madrid simply imported from both for internal consumption. The capital provided few goods and commercial services that might have induced rural Castile to intensify and specialize so as to add variety to its standard of living. Location and urban taxes made Madrid the most unlikely of entrepôts. Thus Madrid itself provided few affordable inducements to rural productivity and was unable to create links between maritime demand and the products of the interior. Lest the importance of this be missed, Madrid's consumption in 1789 exceeded half the value of Spain's import, export, and bullion trade at Cádiz, making it a centerpiece of the country's nonsubsistence economy.

If the one-sided nature of Madrid's trade reveals something of the city's association with its hinterland, the nature of urban imports provides additional insights. In Table 4.8 the imports of 1789 that could be assigned prices have been classified as subsistence commodities, non-subsistence foods, raw materials and semi-finished products, and manufactures. The value of goods that could be priced in each category is shown as a percentage of the value of all imports that could be given prices. The results reinforce the findings in the earlier sections of this chapter. Despite the high proportion of low incomes, [85]
 


 
Table 4.8. 
Distribution of the Value of Madrid Imports by Type of Commodity, 1789
Category(a)
Subsistence commodities 40.1%
Nonsubsistence foodstuffs 16.2
Raw and semi-finished materials 6.4
Manufactures 37.1
Source: Based on AVM, Secretaría, sig. 4-5-67, and the sources in note 17.
a. Subsistence commodities = wheat, meal, wine. charcoal, and olive oil. Nonsubsistence foodstuffs = sugar, chocolate, fruit, etc. Raw and semi-finished materials = silk, wool, yarn, iron, etc. Manufactures = textiles, hardware, shoes, etc.
 

the economic importance of nonessential goods is striking, and reflects the extreme concentration of wealth. This again highlights another of Madrid's structural traits: the orientation of manufacturing and commerce to the city's internal market. Unable to export, and having an urban market with only a few thousand affluent households, Madrid could absorb only a small volume of any given product. Hence manufacturing and marketing were locked into the handicraft stage. By the later eighteenth century, it was precisely such handicraft production that was becoming vulnerable to European competitors who, because they enjoyed expansive markets, were able to experiment with new industrial techniques that lowered production costs and allowed penetration into markets which, like Madrid, were serviced by high-cost producers.
 
IV. Implications
 
In a narrow market with few affluent customers, the final cost of a good is frequently less important than its uniqueness, variety, and style. This context emphasizes profit per unit sold, rather than profit through volume sales. (35) The type of elite that Madrid exemplifies has little concern for the geographic origin of the goods it fancies--distant origin is often part of the intangible uniqueness of a costly item important to the externalities of status. Thus Madrid's market absorbed a large volume of a few basic commodities required by virtually all inhabitants, and a remarkable variety of luxuries, textiles, and manufactures sought by the narrow middle- and high-income market. The relative unimportance of raw materials and semi-finished products [86] reflects both the weak urban demand for industrial products and the dependent position of the craft sector in the urban economy.

This interaction of consumer and producer afflicted Spain beyond Madrid and shaped the industry of the interior from the sixteenth century onward. It became even more striking as Madrid did, in fact, become a major industrial center of pre-industrial Spain. (36) It was, however, an industrial community in an environment unlikely to stimulate structural change in production or alter the mentality of producers and distributors. Madrid's dominant urban functions and concentration of income created a pattern of consumption in which demand for imported luxuries remained inelastic unless there were major problems in the monarchy itself. The extensive fields of influence created by political power and aristocratic social integration produced an urban elite which was largely immune to economic distress in the Castilian interior. Indeed, crop shortages generated high grain prices that tended to enhance the situation of a rentier class with stocks of grain to sell. At the same time, the demand for basic foodstuffs remained inelastic because most of the population was so near the subsistence level that it could not reduce consumption without serious results.

Income distribution and urban function thus interacted with fluctuations in food supply and the effectiveness of political authority to create a market with inelastic demand for a few agricultural commodities and a great many luxury products. The segment of urban demand that was highly elastic involved the lower-quality manufactures of the interior and less essential foodstuffs. (37) Consequently, the structure of the urban economy left the craft industries and specialized agriculture of the hinterland vulnerable to the changing fortunes of the city.

The stultifying effect of concentrating so much buying power in a market so constructed marks a strong contrast with seventeenth- and eighteenth-century England and London. Residence for a rising "pseudo-gentry," London's very size implied returns to scale in distribution and a volume of demand that stimulated significant productivity increases in agriculture. As F. J. Fisher comments: "Had the consumption of imports and city-made goods been confined to the upper classes, it is doubtful whether much weight could reasonably be attached to them as a spur to production." (38) In Madrid, not only was wealth concentrated among the upper classes, but within the elite there were disparities that rendered buying power even more concentrated than it first appears.

[87] The perennial reliance of Madrid on distant suppliers also meant that, despite a rudimentary regional economy, long-distance commerce was well developed. Beginning in the later eighteenth century, accelerating European industrialization set the stage for a progressive shift in urban preferences toward imported goods. By the second quarter of the nineteenth century, the dependence on imports involved the purchasing patterns of the poor as well. These trends spelled trouble for the craft industries of Castile and for the manufacturing sector of Madrid. This is hardly a surprising result of the industrial revolution, and the Spanish preference for imports is a cliche. But the economic structure that Madrid's raison d'être imposed upon its urban economy, and the narrow market structure that resulted, suggest that the capital transmitted economic forces into the Castilian hinterland in ways that reinforced its economic stagnation. To verify that, we must next examine some of the long-term changes in the structure of the urban economy.
 

 Notes for Chapter 4
 
 1. Ramón de Mesonero Romanos. Obras, vol. 2, p. 217.

2. The result is an even more extreme case of the "residential city" than the Berlin cited by Werner Sombart in Luxury and Capitalism (1967), p. 25. On urban functions and occupational structures, see Christalier, Central Places in Southern Germany.

3. For a compendium of examples of such work in France, see Adeline Daumard, ed., Les fortunes françaises au XIXe siècle (1973), with summaries of work by Daumard on Paris, Felix-Paul Codaccioni on Lille, Georges Dufeux and Jacqueline Herpin on Bordeaux, and Jacques Godechot and Jean Sentou on Toulouse.

4. The same assumption is made by Bartolomé Bennassar, "Medina del Campo: Un example des structures urbaines de 1'Espagne au X Vie siecle"( 1961), p. 492. See also the discussion of this problem in Adeline Daumard and François Furet, Structures el relations sociales a Paris an milieu de XVIIle siécle (1961), esp. pp. 16-22 and 26-38; and also Michael Katz, "Occupational Classifications in History" (1973).

5. The city had virtually no primary sector. The tertiary sector, if defined to include government, personal service, professions, and mercantile distribution, is too large to contribute to analysis. In an unspecialized pre-modern economy it is impossible to separate processing and manufacturing (secondary activities) from mercantile and personal service (tertiary activities). This is especially true for guilds and food processing. For additional comment on the derivation of occupational and income figures, see Appendix C.

6. For a classic statement on such cities, see Sombart, Luxury and Capitalism, pp. 21-35, 107-112. See also the more direct observation of Antonio Flores on empleomanía in La sociedad de 1850, p.85.

7. On the directing elites of pre-industrial cities, see Gideon Sjoberg. The Pre-Industrial City, p. 110. Sjoberg has been criticized for creating a sociologism and loosely stating the obvious, but his conceptualization, however derivative, is still useful. As will be seen, the inclusion of 21.6% of economically active people within the elite is a considerable overstatement.

8. The definition of economically active that produced the 12.5% figure is narrower than the one we have used, and a precise comparison would enhance the importance of the Castilian artisan sector. See La economía del Antiguo Régimen: La Renta Nacional de la corona de Castilla, by "Grupo 75" (1977), p. 137.

9. See Charles Kany, Life and Manners in Madrid, 1750-1800 (1970), pp. 252-261, for a long and descriptive account of the numbers, variety, and life-style of servants in Madrid.

10. An interesting comparison can be made with Mexico City, which was a residential and political center, but also a center for long-distance and interregional trade. See John Kisza, "Mexico City and the Provinces in the Late Colonial Period: The Dynamics of Domination" (paper given at the meeting of the Pacific Coast Branch, American Historical Association, 1978).

11. Pre-modern income figures are hard to find, and those of the Catastro are subject to many qualifications. These figures are the result of cross-referencing versions of the 1757 Catastro of Madrid with adjustments extrapolated from other sources. The results are not comparable to distribution-of-wealth figures because the latter emphasize the propertied classes. Our figures are more comprehensive: they include all social elements within a single frame of reference. For possibilities and limitations of this technique, see Daumard and Furet, Structures et relations, and Daumard, Les fortunes françaises, esp. the synthesis in ch. 5. It is not clear how well some groups were counted, or how accurate the assumptions about wages were. Given the probability of underreporting in high income groups, and of unstable employment among the poor, the distribution of income was probably more extreme than these figures indicate.

12. Earl J. Hamilton, War and Prices in Spain, 1651-1800 (1947), app. 5, "Money Wages in New Castile, 1737-1800," pp. 268-269, gives average daily rates for construction labor. Yearly totals conventionally credited an urban worker with 180 days of earnings, and domestics with 250; see Fierre Vilar, "Estructures de la societal espanyola cap al 1750," and La Renta Nacional, p. 129. The official instructions for the Catastro give 180 days for artisans, 120 for jornaleros, and 250 for servants and lackeys (AVM, Secretaría, sig. 2-359-17, fol. 10 ff). The one noble family whose income can be checked (the Infantados) appears accurately registered (Archives Nationals, Paris, IV-1608B/2II 46-1, courtesy Prof. Richard Herr; AHN, Osuna, leg. 1570-A, accounts from the Infantado holdings). The accuracy of recording in the professional, commercial, and artisan-cum-retailer groups cannot be tested.

13. The economic weight of the clergy is understated. Clerical landholdings accounted for about a third of the net agricultural product of Castile and 17% of Castile's national income as of 1750; see La Renta Nacional, pp. 189-203.

14. The one private-sector export industry was publishing, which developed after the 1750's; see Diana Margaret Thomas, "The Royal Company of Printers and Booksellers of Spain, 1763-1794 (Ph.D. diss., 1974). The charter of the Compañía da Libreros y Impresores (1764) is in AHN, Consejos, leg. 51634-13.

15. The English figures are from Lee Soltow, "Long-run Changes in British Income Inequality" (1968). While the comparison between a national estimate and one for a city within another society is of course imperfect, it provides a helpful illustration. Soltow focuses on the degree to which income inequality aided development and was reinforced by industrialization. Our comparison suggests that what is important about Soltow's figures is the relative breadth of income distribution, not its extremes. Soltow's estimates are based on figures compiled by Gregory King in the 1690's. Recent work by Peter Lindert shows important omissions in King's work and, among other things, enlarges the size of the middle-income groups prior to 1750. This makes the Madrid-England contrast even more pronounced. See Peter Lindert, "English Occupations, 1670-1811" (1980), and his "Working Paper no. 144" (1980), Dept. of Economics, University of California, Davis.

16. Carlo M. Cipolla, Before the Industrial Revolution: European Society and Economy, 1000-1750 (1976), pp. 8-14, discusses income distribution in pre-industrial Europe. He includes a table based on the well-known compilations made by Gregory King in the 1690's. It shows an income distribution in England in 1688 that was considerably more equitable than that of eighteenth-century Madrid. Cipolla quotes Francesco Guiciardini, who noted that in sixteenth-century Spain "except for a few grandees of the kingdom who live with great sumptuousness, one gathers that the others live in great poverty" (p. 14).

17. Earl Hamilton has been criticized for the use of wholesale prices, which imply a downward bias in price averages. If true, poverty incomes bought even less than assumed here. In practice, Hamilton's prices--upon which Table 4.7 depends--match those of other sources. Compare Hamilton, War and Prices, app. 1, "Commodity Prices in New Castile, 1751-1800," and app. 5, "Money Wages in New Castile, 1737-1800," with Gonzalo Anes Álvarez, Las crises agrarias en la España moderna, graphs of commodity prices; and the Correo Mercantil (Madrid) for 1792-94, passim, in Bancroft Library.

18. Earl Hamilton, War and Prices, pp. 251-255; Manuel Espadas Burgos, "Abasto y hábitos alimenticios en el Madrid de Fernando VII" (1973), pp. 258-263, 267-277; Vicente Palacio Atard, Los españoles de la Ilustración (1964), pp. 300-305. See also Antonio Fernández García, El abastecimiento de Madrid en el reinado de Isabel II, pp. x-xv.

19. William J. Callaban, "Corporate Charity in Spain: The Hermandad del Refugio of Madrid, 1618-1814," p. 165; Callahan also gives a good sketch of life at this income level.

20. Taken from Ramón de la Cruz, La Petre y la Juana, as cited by Arthur Hamilton, "A Study of Spanish manners, 1750-1800: From the Plays of Ramón de la Cruz." Writing in the 20th century, Arturo Barea describes what could almost be the same building in The Forge (1944), pp. 127-130

21. Mesonero Romanos, Obras, vol. 2, pp. 113-114

22. The rough clothing provided in the asilio de méndigos would alone have absorbed much of the margin (ibid., p. 42).

23. Kany, Life and Manners, pp. 161-163.

24. In 1799, 22 members of the Consejo de Estado averaged 147,000 reales per year, while members of the Consejo de Castilla got 106,000 and members of the Sala de Alcaldes y Corte 36,000 reales (José Canga Arguelles, Diccionario de Hacienda (1834), vol. 2, p. 533).

25. The immigration by single adults from rural areas and the low marriage rates and small childhood cohorts shown in Chapter 3 all confirm this pattern.

26. William J. Callahan, "Corporate Charity," p. 162, and La Santa y Real Hermandad del Ref agio y Piedad de Madrid, 1618-1832 (1980), p. 14.

27. Arthur Hamilton, "Manners," pp. 35-36, 64-65.

28. AVM, Secretaria, sig. 4-5-67. One need not go far to find defects in such official resumes, especially when related to taxes; see Stanley Stein, "Reality in Microcosm: The Debate Over Trade with America, 1785-1789" (1973). Any built-in bias in reporting worked to understate reality. Where the reported volume of imports can be compared with other official sources, they are consistent. Thus the figures may be understated, but they are of similar in magnitude and reflect the relative importance of items.

29. See note 1 7 above, and also Antonio Malilla Tascón, ed., Balanza de comercio exterior de España en el año 1795(1965). Some items are underpriced; if there was a risk of overpricing an item, it was omitted. Those that could not be priced included many luxury items that were traded in small volume and left no quotations. This is onset by the absence of raw and construction materials. When several prices were available, low quality was assumed, producing a consistent downward bias. The distortions generally minimize the importance of manufactures and imports from outside of Castile.

30. An independent estimate by Napoleonic authorities in 1811 suggests a "normal" yield of 100,000 reales daily from a 10% entry duty and implies an annual volume of 365 million reales, excluding bread and bread-grains. Given the reduction of trade due to the war, this fits with our estimate. See Geoffrey de Grandmaison, ed., Correspondence du Comte de la Forest, ambassadeur de France en Espagne, 1808-1813 (1906 -1913), vol. 4, p. 499.

31. Of 800 complete commodity transfers by such people, 50% involved delivery of goods to Madrid, but exactly two describe goods leaving the capital. David R. Ringrose, Los transportes (1972), maps and appendix.

32. AVM, Secretaría, sig. 2-360-5; Antonio Malilla Tascón, "El primer catastro de la villa de Madrid"; Canga Arguelles, Diccionario, vol. 2, p. 184; Archives Nacionales, Paris, IV-1608B/2II 46-1. (Courtesy Prof. Richard Herr.)

33. Loma Jury Gladstone, "Aristocratic Landholding and Finances in Seventeenth-Century Castile: The Case of Gaspar Téllez Girón, Duke of Osuna (1656-1694)" (Ph.D. diss., 1977), pp. 146-154,156-184.

34. Given the size of clerical landholdings (see note 13) and the fact that Madrid accounted for over 6% of ecclesiastical personnel in Castile, and an even larger share of endowed religious institutions, the Church's contribution to the urban economic base was very large.

35. Sjoberg, The Pre-lndustrial City. pp. 196-199,204-209, gives a good description of this market structure.

36. La Renta Nacional, pp. 46-47, 152-153.

37. As Chapter 6 will show, wine was the most important commodity of this type.

38. F. J. Fisher, "London as an 'Engine of Economic Growth' "(1976), pp. 205-215, esp. p. 211. See also Wrigley, "A Simple Model"; and Robert Brenner's comments on this theme in "The Origins of Capitalist Development: A Critique of Neo-Smithian Marxism," pp. 45-47. A more recent summary is in John Patten, English Towns, 1500-1700 (1978), p. 87.