Living Standards, Inequality and Consumption, 1500–1800

Abstract

The chapter surveys living standards, inequality, and consumption in the Iberian Peninsula (Spain and Portugal) from 1500 to 1800, using a comparative and regionally differentiated perspective shaped by Iberia’s institutional fragmentation under composite monarchies. It argues that the Early Modern period consolidated Iberia’s position as a European periphery despite imperial reach, and that territorial diversity (Castile vs. Crown of Aragon, Lisbon vs. provincial Portugal, and multiple urban–rural contrasts) makes generalizations hazardous. On living standards, the authors track long-run movements in prices and wages (often in silver equivalents) and emphasize a negative trend in real wages across the period, with sharp deterioration in the seventeenth-century crisis (demographic shocks, harvest failures, epidemics, and war) and renewed pressure after mid–late eighteenth-century price rises. Recovery after the 1720s was uneven: Spain’s economic dynamism shifted toward coastal and peripheral regions (notably Cádiz and Barcelona), while Portugal remained heavily centralized around Lisbon and still lagged in real-wage terms. On inequality, the chapter documents substantial spatial and temporal variation, with very high urban inequality (e.g., Lisbon) and cyclical patterns in Spain that respond to shocks rather than a simple Kuznets-style trajectory. In Portugal, inequality appears to decline overall, linked to agrarian productivity changes and colonial-era growth, though major events (e.g., the 1755 Lisbon earthquake) reshaped institutions without clearly compressing wealth gaps. On consumption, the authors explain how consumption could expand despite falling real wages: households diversified income sources, worked longer hours, and mobilized more family labor—patterns consistent with an Industrious Revolution. New and colonial goods (maize, rice, sugar, tobacco, textiles) diffused unevenly by status, while women, children, and the poor bore disproportionate hardship under structurally constrained living conditions.