AHC: Keep Manufacturing and Finance in Southern Europe

During the middle ages through the Renaissance, Italy was the economic leader. Spain was also highly developed. After the 16th century, though, manufacturing declined in southern Europe while England and Holland took the lead. Much of the merchant class throughout Italy merged with the landowning aristocracy. Your challenge is to keep southern europe - Italy, Spain, and Portugal - as the leaders of manufacturing, trade, and finance through the early modern period, and make this the dominant region of the industrial revolution.

Put Weber out to pasture, ladies and gentlemen.
 
Spain is easy, as it was quite able to become a manufacturing/finance powerhouse. Things were good until, as we know, a series of unfortunate turns made it increasingly difficult to maintain their power. Here are some few points in favor of a longer-lasting superspain:

-Relatively developed Urban centers(Valencia, Barcelona, Toledo, Sevilla, Granada)
-Many Jewish and Moorish craftsman communities scattered around, mostly in the south(before the Inquisition, that is)
-Population(around 10 million by the begginning of the 16th century)
-A wealthy domestic market for it's goods(the Low Countries, assuming they somehow end up inheriting it in this ATL)
-Unimaginable amounts of bullion from the Americas(if colonization goes in a similar fashion to TTL)

Just make the Spanish use those advantages in a more effective way, while also keeping them from fighting half of Europe(screw those habsburgs).

Portugal is trickier, as always, since it's considerably smaller than Spain. However, that didn't prevent the portuguese from punching way above their height and succeeding for a time.

Their age of market exploitation could always be stretched a little longer, and some extra land in Iberia(Galicia, for example) and north Africa is always helpful. Also, keeping them from falling under a personal union would do wonders, as being isolated from the rest of Europe almost always worked in favor of Portugal. Besides that, I can only think of a stronger burgeoisie that takes part in it's overseas ventures, and possibly an earlier discovery of Brazilian gold(that came a bit late in OTL).

I don't know a lot about Italy around that time you're suggesting, so I'm unsure on how to go about it.
 
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-A wealthy domestic market for it's goods(the Low Countries, assuming they somehow end up inheriting it in this ATL)
(...)

Just make the Spanish use those advantages in a more effective way, while also keeping them from fighting half of Europe(screw those habsburgs).
(...)
These are mutually exclusive, a monarch from the Low Countries actually inherited the Spanish Crowns (Castille & Aragon). He was Habsburg, who in turn inherited the region from the house of Valois-Burgundy. Without Spain, the Low Countries, will like OTL be interested in Colonial ventures, probably earlier than IOTL.
 
Where to begin....
-Relatively developed Urban centers(Valencia, Barcelona, Toledo, Sevilla, Granada)
-Many Jewish and Moorish craftsman communities scattered around, mostly in the south(before the Inquisition, that is)
-Population(around 10 million by the begginning of the 16th century)
-A wealthy domestic market for it's goods(the Low Countries, assuming they somehow end up inheriting it in this ATL)
-Unimaginable amounts of bullion from the Americas(if colonization goes in a similar fashion to TTL)

The problem was structural as it always was, numbers as the Ming and Qing showed meant little past a minimal market size.
To understand Spain one has to look back to Castile and Aragon, the economy of the 13th century was disorganized and backwards with some exceptions in the cities. This lack of rural economic structure turned out to be a benefit as the countryside readily adopted new techniques along with the 1 time influx of crusading loot. The problem began in the 14th and solidified by the 16th century as urban guilds came to dominate all aspects of the economy through monopolies, something the crown actively encouraged in order to bolster revenue from guild kickbacks. What was more damaging was the dominance of capital by urban commercial interests at the expense of rural manufacturers that were subordinate to merchants without understanding of innovation and derived their incomes from monopolies.

Come the 17th and 18th century and suddenly Spain's fortunes reversed requiring more revenue and a bunch of Protestant competitors that were suddenly competing after being artificially shut out by war. Despite various attempts at reform only the coastal cities were "modernized" in a vast sea of unskilled and impoverished farmers.

In contrast Catalonia's rural economy was relatively autonomous and backward but managed to adapt much better than Castile in the 17th and 18th centuries leading to its modern day prosperity.

What you need for Castile in particular is no Hapsburgs, weakened guilds, and no revolt of the comuneros neutering the municipal authorities. Just a calm corner of Europe making money, colonies, and babies.

As for Italy and Greece, well Greece has a lot to do with the Byzantines and how during their long and painful decline wealth became concentrated in the hands of noble landlords that squeezed as much wealth and innovation out of the land as possible. Reform was possible, but you needed someone able and willing to rip out all the existing power structure that served the noble landlords instead of just restoring the imperial brand and co-opting the existing landlords. That or bureaucratic reform, I'm not knowledgeable about that.

Italy on the other hand is too diverse but generally lacked the size for its population, internal market, and the military needed for peace. Naples would be an exception, the land was too fertile that the feudal lords were satisfied with a minimalist agrarian economy with half of the land managed by inept bishops.

Why to make Italy work you'd need a TL where a city state carves out a sizable market for Industrial Progress...
 
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Is there any way the revolt could succeed? What effect would that have on Spanish economic growth?

Hard to say, the main thing was that it was an empire by then and with just Castile revolting little would come of it. One of the main problems here was that both sides were terrible administrators in an regional-empire fight, the crown was inept and warmongering while the local nobles and guilds were also inept and decadent; just slightly less so and that they wasted the wealth locally instead of foreign wars. As usual one needed structural changes instead of just a new power sitting on the same pyramid and urban monopolies and nobles saw to it that no one did. One needed a different reconquest I think, or something sufficient to root out nobles and the urban guilds. Or maybe just have the aftermath different, post-revolt the middle classes were included in the system but also reliant on crown salaries and lost all effective ability to oppose crown demands.

Portugal I believe is a good counter-example, the crown spearheaded exploration and supported merchants as an alternative to relying on nobles (plus its own guilds weren't as much of a problem).
 
These are mutually exclusive, a monarch from the Low Countries actually inherited the Spanish Crowns (Castille & Aragon). He was Habsburg, who in turn inherited the region from the house of Valois-Burgundy. Without Spain, the Low Countries, will like OTL be interested in Colonial ventures, probably earlier than IOTL.

Agree here. Spain will never be able to be simultaneously commercially involved/dominant in European trade while being able to avoid war and rivalry with France
 
During the middle ages through the Renaissance, Italy was the economic leader. Spain was also highly developed. After the 16th century, though, manufacturing declined in southern Europe while England and Holland took the lead. Much of the merchant class throughout Italy merged with the landowning aristocracy. Your challenge is to keep southern europe - Italy, Spain, and Portugal - as the leaders of manufacturing, trade, and finance through the early modern period, and make this the dominant region of the industrial revolution.

Put Weber out to pasture, ladies and gentlemen.

IOTL, Spain's economy was quite badly damaged by inflation caused by the influx of South American silver into the country, so it would certainly help for them to realise this and avoid dumping so much precious metal into their economy. I'm not sure how plausible this would be, however, given the state of economic knowledge of the time.

Other than that, avoiding the Eighty Years' War, either through Philip appointing a less harsh governor or else simply through not having Protestantism catch on so much in the area, would also be a big help, since it would reduce the Spanish Crown's expenses considerably. If Spain and England remain on good terms, that would also be a plus.

For Portugal, avoiding the Iberian Union would be good, though I don't know enough about Portuguese or Italian history to say anything more about those countries.
 
Note that there is quite a bit of coal in Catalonia and Basque Country. Even IOTL, there was industrialization there - spinning jennies were there by the 1790s, and after Spain got stable by the 1870s, both regions really did industrialize. Without the post-Peninsular War instability, both regions would have industrialized a lot quicker, both due to stability and access to the markets of Spanish America. Of course, they would have been better off, but this in and of itself is no competition with Northern Europe.
 
@Irene You only mention the landlords in your Byzantine example; would you also extend this to the power of Byzantine bureaucracy?

Unfortunately as I've noted I'm not too knowledgeable or interested in the Byzantines. I'm sure there are better experts than me around, my impression of it was that it was quite weak by the 13th century unable to raise taxes properly and suffered from constant succession crisises. By the 14th century it was living on borrowed time with so much of its land devastated or lost.

Didn't the Italian wars also really wreck the Region?

On a macro level the region stagnated (but it was still quite rich compared to Europe) and there was the decline of international trade, on a micro level the Venetians saw the rise of manufacturing and a silver age of prosperity. The Milano region joined as well, but things went to hell in the late 18th century when landlords changed from fixed long-term sharecropping to short-term rents with quotas & sharecropping on top; while this isn't necessarily bad in of itself the way it was employed was mostly to impoverish farmers and trap them into debt slavery. The quotas also encouraged the landlords to maximize profits by renting out a lot of small plots since each plot came with a minimum quota while production only kept up with labour intensive methods (de-industrialization really)
 
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@Irene This assessment would be incorrect for the Byzantine Empire upon its genesis of collapse. It, by my opinion and of numerous scholars, was the bureaucracy which caused the collapse, not the nobility, this nobility may have been what would have saved the Byzantine throne in the 11th century. However, an extremely powerful bureaucracy (which disregarded military affairs in favor of protocol and other technicalities of ruling) and ineffective, yet wealthy nobility is a weak alliance at best.
 
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