Pizarro, The Economic Failure of Spain, and Why Bad News May Be Good News

“You don’t acquire the kind of wealth your uncle commanded by being like the rest of us.” – John Carter On Mars

I love the idea of people carrying me around everywhere I go.  Now how do I become emperor again? 

In 1532, Francisco Pizarro, accompanied by a force of less than 200 Spaniards, took on a portion of the main army of the Inca.  Why?  To defeat the entire Inca nation.  The plan was at least partially desperation.  To retreat would show weakness.  As Cortez had burned his ships years earlier to give his men incentive to defeat the Aztec empire, Pizarro was all in.

Pizarro invited the Incan Emperor, Atahualpa, into a down called Cajamarca.  Believing this to be safe since there were only 200 Spaniards, Atahualpa was accompanied “only” by 6,000 of his warriors and generals who were admittedly armed only with small battle axes.  The Spaniards had waited, concealed and terrified in Cajamarca, for hours.

As Atahualpa was carried into the central square of the town, his honor guard parted to allow Atahualpa down from his litter.  History records that he became angry when a single Friar approached him and asked him pledge fealty to the Spanish king, Charles, and become a Catholic.  At the point where Atahualpa enraged, the Spanish sprang from their concealment, attacking the Incans with cannon, gunfire, and sword.  The cavalry managed to abduct Atahualpa, and Pizarro himself blocked a sword strike at Atahualpa, catching at least part of the sword on his own hand.

Pizarro wanted Atahualpa as a hostage – a living Atahualpa could be used to give orders.  A living Atahualpa could be used to prevent the 55,000 battle-hardened troops outside from rushing the Spaniards.  A living Atahualpa could be ransomed.

Fake news, 1532 style:  a picture of Pizarro meeting Atahualpa looking like everything is nice and rosy.  Not pictured:  The battle where Atahualpa lost his entire empire.   

Also:  Do you have a few minutes to listen to a story about Jesus?

And ransomed he was – for a room, 22’ by 8’ by 7’.  Not just any room.  But a room that big, filled with gold.  And two the same size filled with silver.  It’s certain that the gold wouldn’t have been solid, but would have been jewelry and other items.  Let’s assume that it was 2/3 filled with air.  That still means the gold would have been worth (in today’s dollars) at least $20 billion.  The silver wouldn’t even be worth a billion.

Atahualpa was executed, anyway.  The King of Spain was reportedly not pleased, but was pretty good with the over $4 billion that was his (minimum) cut of Atahualpa’s treasure.  In November of 1533, Pizarro entered Cuzco, the capital of the Mayans as its conqueror.  He would serve as governor of what is now Peru.  Pizarro was killed in 1541 by the son of an assassinated rival.

Pizarro, with a fine, feathered hat.  Makes me want to kill some tropical bird so I can have a cool feather.  What, I don’t have to kill one for a feather?  Spoilsport.  Oh, and Pizarro had two kids with Atahualpa’s wife.  She must have been attracted to that fine beard.

But the impact on Spain was enormous.  The Conquistadors kept coming, and kept taking gold from the New World for over a century more.  All of the treasure went back to Spain, and, initially, paid off the debts of the Spanish government.  But it did other things, as well.

Seville, the Spanish city had over 16,000 shops making textiles out of silk in the year 1500, before the gold started to come in from the Americas.  The population of Spain stood at (around) 10,000,000 at this time.  200 years after 1500, in 1700?  The population of Spain had dropped to around 6,000,000.

What happened?

All of the gold.  Such good fortune, right?

Where it would have been pretty rough for a foreign power to have taken over Spain (it was in pretty good shape, militarily) the gold from the New World did the job wonderfully.  How?

All of the gold led to a change in the culture and value of Spain.  Whereas before, Spain had been an industrious nation, after gold, things changed.  Why do it, when you could have someone else do it?  There were people in the Netherlands that would gladly build it for you and ship it to Spain.  There were people in the Netherlands that would gladly come to Spain to do work that Spaniards wouldn’t do.  Begging (among Spaniards) and living off of charity became to be seen as more virtuous than resorting to common work, at least that was the message the common man received from watching the nobility.  Spain had traditionally been more than self-sufficient in providing agriculture.  In 1578, one observer noted that the lack of production “was not the fault of the land, but was the fault of the people.”

Spain’s military and colonial establishment, however, continued to provide the currency that the country needed even as the country sank into indolence and despair.

And what brought about the despair?

Success.

Success took away the hard lessons in life.  The Spanish military took the ambitious young men of Spain and allowed them to seek glory.  The rest of Spain?  Lived off of the glory.  Eventually, the rot of success allowed the United States to completely remove the remaining Spanish colonies from Spain.  When our new, steel warships fought against the Spanish?  They often fought cannon that were 100 years old, and 70 years out of date.

Success allowed Spain to become an economic shambles.  Success teaches no lessons.

In my life, everything that ever made me better was . . . awful.  Losing a wrestling match.  Being deeply in debt.  Getting a divorce.

Losing a wrestling match (2-1, in overtime in 8^th grade) made me want to win.  And I worked harder.  Next time I wrestled that guy?  I pinned him in 20 seconds.

Being in debt.  That one mad me reexamine my entire life, or at least the spending associated with it.  Each spending decision became a moral choice, since I was living in a constant state of (nearly) not having enough money to make it.  There’s nothing immoral about being either rich or poor – it’s what you learn.

Getting a divorce, to me, allowed me to really understand how I’d contributed to the failure of the marriage, realize what I was really looking for in a partner, and allow me to both pick a more suitable wife as well as to become a more suitable husband.

If I had won the lottery or become a rock star at 20, what would I have learned?  Well, besides learning what a car upholstered entirely in endangered species would drive like, probably not much.  I’ve often said that if I’d been immensely wealthy when I was young, I probably wouldn’t have made it to 30.  For whatever reason, I find that adversity and challenge are my friends.  Success is nice, but only if it holds a challenge.

Holy cow – maybe the ultimate challenge is beating success?

Oh, Seneca figured that out 2000 years ago:

“Let us too overcome all things, with our reward consisting not in any wreath or garland, not in trumpet-calls for silence for the ceremonial proclamation of our name, but in moral worth, in strength of spirit, in a peace that is won forever once in any contest fortune has been utterly defeated.” – Seneca, Letters

So the next time you feel that you’ve just had a spot of bad luck?  It might just be your best luck.  Or, if you believe Seneca – no luck at all is required.