[88] The patterns of population, income, occupations and urban consumption just presented permit several insights into the interaction of city and country as the fortunes of Madrid changed. The eighteenth-century cross-section and the long-term trends outlined in Chapter 2 provide a structural context for a variety of evidence on changes in the urban economy from the seventeenth through the early nineteenth centuries. ⁽¹⁾ This chapter presents evidence on changes in occupation, income, and trade structures, while in Chapter 6 we will examine the evolution of the city as a market.
 
I. The Seventeenth Century

Between 1560 and 1630, Madrid evolved from a second-or third-order place in an urban hierarchy oriented to Toledo into a position of urban dominance as the largest city in Spain. In the process, her urban functions and fields of influence changed radically, as politically sustained growth overwhelmed the sixteenth-century town and created an economic pattern that persisted through the nineteenth century. We have seen that by 1630 a demographic pattern of few children, low marriage ratios, a stable core, and a large population of young adult immigrants was well established. Simultaneously, [89] the city developed the large service class and internal, elite orientation of industry and trade characteristic of the eighteenth century.

The evolution of this occupational structure dates from the early seventeenth century and can be glimpsed in 527 peticiones de vecindad preserved from the period 1600-1663. ⁽²⁾ Despite the lag between immigration and eligibility for citizenship, the pattern of immigration implied from Table 5.1 reflects the economic structure that was emerging. Women, servants, and unskilled workers were either ineligible or had little to gain from formal citizenship and are absent from the sample. Consequently, the artisan, construction, and service sectors are seriously under-represented here, compared with the Catastro data, while the food and government sectors are correspondingly overstated. Nevertheless, the occupational structure of recorded immigration for the first two-thirds of the century shows the same emphasis on craft, food, and service industries and on state-related professions apparent in the workforce of the eighteenth century.
 

Of 15 "growth" industries in Table 5.4, 12 produced high-value finished products, luxuries, and metal goods oriented to the elite market. Among the [95] more plebian crafts, only basket-making and esparto-working showed significant increases in the number of masters. The declining guilds involved products that could readily be imported or industries that were either moving out of the city or escaping the guild system. The most striking decline is in the Tailors' Guild, which lost 40% of its masters--a figure that conflicts with our image of tailoring as a major industry. Except for identifying certain growth areas, Table 5.4 tells us relatively little; but coupled with a second comparison it is much more enlightening.

Two trends emerge from these sources: increased economic concentration in many trades, and a weighting of industrial expansion toward wealthy, elite markets. Compiled without reference to guild organization, the figures in Table 5.5 show a trebling of the number of workers in 21 activities between 1757 and 1789. They also indicate an increase in average size of enterprise. The number of workers in these activities rose from 1,591 to 4,683, while the number of establishments fell 20%, from 624 to 499. As a consequence, the number of persons per shop rose from 2.55 to 9.38. Most of the change in scale was concentrated in a limited number of areas, while most growth was concentrated in 10 of the 21 activities. Of 8 industries with shops averaging over 10 persons in 1789, the 6 that were privately owned accounted for 70% of the 3,100 new workers. Three private industries where shops remained small--silversmithing, silk-working, and tanning--also showed substantial growth and accounted for most of the remaining new workers. The concentration of growth in the quality-goods industries--silks, linens, woolens, embroidery, lace, hats, jewelry, tapestries--that is suggested from Table 5.4 is even more evident in Table 5.5. The largest single industry continued to be precious-metal working, and only the printing industry had significant markets outside of Madrid itself. ⁽¹²⁾

Thus we have clear evidence that the number of masters and shops was declining, while the size of the individual enterprise was growing. Moreover, comparison of Tables 5.4 and 5.5 indicates a rapid shift of some activities out of the guild system. Growth and concentration were not distributed evenly, and industries producing valuable products for final consumption--in particular, textiles and metal products--were most affected. The case of the woolen industry, where shops and masterships declined drastically while the number of workers grew by 1,151 %, implies a tantalizing structural transformation of unknown nature. Food-handling trades and lesser traditional activities stagnated or lost ground. Given that the city was growing rapidly during this period, the unequal development of craft industry is suggestive. It coincides with both the growing importance of the servant class and the deterioration of [96]general living standards dramatized by the declines in marriages and births and the increases in deaths and foundlings (see Chapter 3). 
 

More and more of the manufactures used in Madrid came from elsewhere. The city itself, never industrial beyond the needs of its own narrow market, was becoming ever more service-oriented and acquiring more non-working dependents. With the collapse of empire and exposure to European industrialization, Madrid's economy and income structure became more directly dependent on its role as capital, and Madrid's market continued to offer little stimulus to its Castilian hinterland.
 
D. The Professional and Commercial Sector, 1757-1857
 
Further support for these hypotheses is found in the available data on the size of the professional and commercial groups in Madrid. It is commonly assumed that with the 50% growth of Madrid between 1800 and 1857, the [100] business and professional groups expanded as well. An often-cited summary of the census of 1857 has encouraged this assumption, since it not only indicates a surprising 4,308 persons in the "professions," but lists 3,723 comerciantes, implying a healthy and disproportionate expansion of the business middle class compared with 898 comerciantes in 1787 and 1,442 in 1804. ⁽¹⁹⁾ The apparent growth of the professions is even more impressive. As we have seen, however, the census of 1857 marked important changes in the way occupations were classified, and this somewhat specious embourgeoisement of Madrid is belied by comparison of eighteenth-century sources with tax rolls from the 1840's. ⁽²⁰⁾

Using this approach, almost every middle-class category saw a notable increase in numbers from the mid to late eighteenth century, followed by stagnation or decline lasting until as late as 1848 (see Tables 5. 7 and 5.8). The nineteenth-century decline in the numbers of lawyers and surgeons and the modest increase in medical doctors relative to population growth suggest fewer people could afford professional services and that business and earnings were concentrated in fewer hands. This approach obviously misses the increase in the number of people recognized by society as professionals during the nineteenth century. Most of that growth, however, was the result of redefinition of guild occupations as professions. Master builders became architects or contractors, while painters, musicians, and sculptors ceased to be artisans and became professional artists in the modern sense. When this is allowed for, the stagnation of the traditional professions in the nineteenth century identifies an area that was declining in size within the economically active population.

Similarily, while the nineteenth century is characterized as a bourgeois era in Spain as elsewhere, the number of persons identified as merchants, businessmen, and financiers belies the parallel assumption that the business class grew. If one uses eighteenth-century definitions to select people from the tax rolls of 1841 and 1848, the results are interesting (see Table 5.8). In the century of the "bourgeois revolution," Madrid apparently experienced an absolute as well as relative stagnation of its business middle class. The wholesale merchant community, which remained static through the late eighteenth century, appears even smaller in 1841. The specifically financial sector of the commercial class also showed remarkable changes in numbers between 1757 and 1857. Eighteenth-century criteria yielded 274 finance-related persons in 1757, 3 19 in 1841, and 144 in 1848. This does not speak to changes in mode of thought, organization, behavior--but if change was involved, it was contained within the existing economic structures.
 

The retail business sector is harder to measure, because its lower boundary is blurred. The eighteenth-century definition was narrow, excluding artisan [102] shops and distributors of food and fuel. By 1804, and more clearly in 1857, retail outlets for food, fuel, and feed were being defined as mercantile enterprises, along with many artisan shops. Thus the reported number of retailers could jump from 278 in 1757 to 1,091 in 1799, and the number of mercantile people reach 3,723 in 1857. The tax roll for 1841 offers a better comparison, since it is possible to count small food and fuel vendors separately. Using the eighteenth-century's narrow definition results in a retailing class in 1841 no larger relative to the population than in 1757. ⁽²²⁾ Conversely, if every wine, vinegar, oil, charcoal, egg, and sausage seller is considered a merchant, there were around 3,000 "merchants" in 1841--a total that is in line with the 3,723 reported for 1857. Similar treatment of the Casastro of 1757 in fact produced 2,000 such "merchants"-roughly the same proportion of the population as 1857. What this petite bourgeoisie may have thought of itself individually or collectively in one period or another still represents a problem, but again the change was quantitative not structural.

In general, the professional and mercantile elites increased with imperial expansion in late eighteenth century but decline in numerical importance in the first half of the nineteenth, as urban expansion outpaced the resources brought to Madrid through the functions it performed. This conveys the impression of redistribution of wealth in a static society, not a process of basic economic change. ⁽²³⁾
 
III. The Government and the Urban Economy
 
Aside from domestic service, the one part of the active population that grew consistently was the bureaucracy. The census of 1787 shows 5,575 people paid by the Crown, including 499 with military status (con fuero militar) and 1,800 workers in royal factories and monopolies. In 1857, despite the sale of government factories, the figure reached 7,332, to which were added over 3,000 cesantes, furloughed or semi-employed personnel on partial pay (see Table 5.9). Thus the bureaucracy grew from 7.1% of the economically active population in 1757 to 12.5% in 1857, and the number of persons paid by the state trebled.

Analogous figures for the eighteenth century indicate the same drift of government resources toward the capital. Before 1750, state expenditures were stable, coinciding with the relatively slow growth of the capital. Urban growth and the expenditures of the Court subsequently increased. In 1757 the Crown dispersed 45 million reales in wages, salaries, and pensions within Madrid; ⁽²⁵⁾ by 1800 the figure had reached an estimated 100 million reales, ⁽²⁶⁾ and neither total includes the cost of the 7,000- to 10,000-man garrison.

There are no comparable figures for nineteenth-century Madrid, but the evolution of the national budget suggests the continuation of priorities that favored the capital. In the 1780's royal revenues were about 700 million reales per year, half of which was remittances from America, customs duties, and taxes collected in Andalucía, where the American trade was based. ⁽²⁷⁾ [104] That revenue base had been destroyed by the 1820's, and total revenues declined to 450 million reales. With great difficulty, the peninsular economy was forced to provide 550 million reales in revenue by 1830. In adjusting to this crisis, the budget allocated a growing share of surviving revenue to support of government operations in Madrid. The continued subsidy for the Court and growing administrative costs, particularly in the treasury, were counterpoints to the massive decline of naval outlays and heavy reliance on deficit financing. All suggest the continued significance of the government in Madrid's economy and Madrid's growing importance for the state.

With relative political and fiscal stability after 1819, the identification of the urban economy with the state became even more apparent, and there is a close correlation between the economic boom of the capital and the growth of the national budget to 1,200 million reales by 1845. ⁽²⁸⁾ Admittedly, much of the increase involved commitments outside of Madrid, but support for the central bureaucracy and the Court also increased as the treasury was strengthened by the tax reforms of 1845. The fortunes of individual officials may have declined in the nineteenth century, as salaries and pensions were neglected, and resources may not have kept pace with the size of the bureaucracy---but over the long run, both continued to grow. The renewed expansion of the capital after 1840 is clearly linked with the reconstruction of Spanish politics after the warfare of 1808-1839.

Many kinds of evidence from three centuries document the basic relationship between the Spanish state and Madrid's importance and economic structure. The relationship appears in the evolution of government outlays and in the growing importance of government employment for the city's economically active population. It provided a stable core for the socio-demographic structure outlined in Chapter 3. When the empire was prosperous, the government supported the central bureaucracy (and its capital), imperial reform, and active foreign policy. When crisis came, the reflex was to protect the center of the system. In the seventeenth and again in the early nineteenth centuries, the army and navy were neglected. In the first case the market economy of Castile was sacrificed, ⁽²⁹⁾ while in the second the patrimony of the Church was seized. ⁽³⁰⁾ Deficit financing perennially diverted savings and capital throughout the economy. This power of the state to allocate resources encouraged a concentration of landed and educated elements seeking income and prestige, reinforcing the constant growth of the bureaucracy that staffed [105] the state. Thus Madrid and its resident elites were insulated from difficulties elsewhere in the economy.
 
IV. Conclusion
 
Several types of evidence thus support the trends in Madrid's development which were suggested by the logic inherent in the economic structure outlined in Chapter 4. After becoming the capital of Spain, Madrid grew at an accelerating rate, and by the early seventeenth century its economy was being transformed by the requirements of the political and residential functions imposed on it. The salient feature was an extremely unequal distribution of income, which produced a very narrow market and drew urban industry toward specialized products hard to sell outside the city. The landed and bureaucratic elements attracted an immense and poorly paid service class and encouraged an age-sex structure in which thousands of immigrant adults and few children existed alongside a smaller core of stable citizens. Renewed expansion in the eighteenth century brought growth of the bureaucracy, the servant class, and industries oriented to the elite market. Meanwhile, the poor experienced a prolonged decline of real wages, and there are demographic signs of growing misery after 1780. There was more wealth, but it was distributed with increasing inequality in an urban economy that exported its demands for all but basic agricultural supplies to distant producers. In the nineteenth century, population growth combined with a decline in urban resources. There are signs of greater urban distress and indications that the elites were static or shrinking in numbers. Consumption turned away even more from domestically produced goods, and the urban economy became less varied and less capable of providing economic stimulus to Castile. ⁽³¹⁾

Taxes and rents flowed from countryside and empire into the hands of the wealthy of the city, thence to administrators and lawyers, to merchants for imported products, to artisans, and to domestics. ⁽³²⁾ They then flowed out of [106] the city in payment for the food, manufactures, and raw materials used in the city. Internal income distribution and market structure focused part of the demand on the city's hinterland, but this emphasized the few basic agricultural commodities which the poor could afford. An ever larger share of income, however, was spent on the luxury products of the craft guilds and on imports from the periphery or overseas.

This is extremely important, because by mid-seventeenth century Madrid was the dominant economic and urban center of Spain. Its fields of influence, reflecting its predominant functions, placed Madrid at the head of an urban hierarchy that linked it with Sevilla, Cádiz, Mexico City, and Lima. Simultaneously, the capital reached beyond Castile to the coasts and to Europe for the luxuries and manufactures consumed by the urban elites. Madrid also needed supplies and simple manufactures for the bulk of its population, and this required a huge tributary zone that brought the city's needs into conflict with any other economic activity competing for the sparse agrarian resources of Old and New Castile. Inevitably, Madrid was a city in which commercial life consisted of collection and final distribution rather than industry or entrepot services.

In the nineteenth century, when the loss of empire and its trade crippled government finance and the great port cities, the rentier elite of Madrid and its commercial adjunct became relatively more important within the political and economic framework of the capital and country. A greater share of government revenue had to come from peninsular sources, and the agricultural sector became relatively more important as a source of wealth. With the mid-century land sales, agriculture did become more responsive to market pressures. But the pattern of urban dependence and exploitation was unchanged, and therefore little happened to alter the basic interactions between capital and country. This weak interaction was not because Madrid lacked commercial significance--at the middle of the eighteenth century the commercial and industrial income attributed to the capital matched that of the entire province of Sevilla, including the cities of Sevilla and Cádiz. ⁽³³⁾ The reasons lie in the structure which urban function imposed on the city's economy, coupled with the accidents of geography.

In effect, Madrid presented Spain with an urban center very different from the "motor for economic growth" which Wrigley suggests for seventeenth-and eighteenth-century London. Madrid could provide little stimulus for interior Spain, and may have functioned as a motor for regional economic stagnation. It concentrated the wealth, disposable income, and commercial activity of the country on a narrow market with a few thousand affluent families--only a few hundred of them really wealthy--and on a mass of [107] urban poor with extremely low incomes and low productivity. This produced a consuming elite whose basic needs cost only a small part of their income, even during subsistence crises, and whose demand for quality imports was surprisingly constant despite the state of the urban economy. Moreover, the range of imported commodities they came to expect expanded continually. At the same time, the huge population on the edge of subsistence was constantly forced to choose between food and the amenities of life. Whenever food became dear or real wages fell, they were forced to limit their purchases to food. Consequently, urban demand for domestic manufactures and agricultural specialties was extremely variable.