30 May 2015

English entrepreneurship defeated the Spanish Armada


Dan Snow’s series on the Spanish Armada (Sundays, BBC2) is good on the dramatic events of 1588. But as is the nature of television, it is less good on why things happened as they did. The background to the Spanish attempt to invade England by sea actually tells us a great deal about the evolution of the British economy and how it came to rely on trade, private enterprise and access to global markets over the next few centuries.

The roots of the Armada are to be found a hundred years earlier, in 1494, when the Treaty of Tordesillas between Castilian Spain and Portugal implemented three Papal Bulls from Alexander VI which essentially granted the new lands of the Americas to Spain and Portugal. Everybody else, especially England, was left out.

Fast forward, if you can, to when Elizabeth I ascends the throne in 1558 and England is in economically dire straits. The Crown has amassed large debts in Antwerp (run up in part by her sister Mary, to pay for the wars of her husband Phillip II of Spain) and there is high inflation because Henry VIII had repeatedly debased the coinage. The only substantial export is unrefined wool and to make matters worse England is effectively locked out of the opportunities represented by the new world.

To be fair, there had been some progress. Henry VII had in fact dispatched the Bristol merchant John Cabot to Newfoundland. And under Henry VIII England had developed world class blast furnaces and gun foundries in the Weald of Kent. English blast furnaces were notoriously advanced, enabling not only the production of heavy cannon, but precision cast iron shot. This was an important step forward not just in military terms but in manufacturing processes.

There was also intellectual progress. In the preface to the Act in Restraint of Appeals Thomas Cromwell wrote in 1536 that “it is manifestly declared and expressed that this realm of England is an Empire” and a sense of English exceptionalism, even mission, was gathering pace. In one dimension, this was religious, but it was also to do with a fundamentally different economic outlook to the enormous continental powers of Spain and France.

The Elizabethan court was teaming with practical thinkers such as Thomas Gresham, Richard Hakluyt and John Dee who developed this philosophy further. Gresham encouraged Elizabeth to rebase the coinage by melting it down and reissuing it with a higher base metal content and to pay down her debts and to balance her books. Hakluyt advocated exploration across the seas to compensate for the lack of growth at home and it was the magus-like figure of John Dee who first used the expression “British Empire”. Dee concocted fanciful justifications for Elizabeth to claim American colonies in defiance of Papal decrees.

This body of political and economic thought had an impact on the British sense of self and British identity which lasts to this day. As the historian Fernand Braudel points out in his book Civilisation and Capitalism, England began to conceive of itself “as an island, in other words an autonomous unit, distinct from continental Europe”.

For this new strategy to be executed two further things were required. The first was technical innovation and the second money. Both of these had been in short supply in England in the previous hundred years.

The technical innovation came from English shipwrights. The historian Geoffrey Parker has described the race to built galleon as one of the greatest innovations of all time and its importance has only really been fully evident since the Mary Rose and other wrecks were brought up. Put simply, the English removed the vast castles fore and aft and developed a class of strong, low-built, fully-rigged ships, with powerful iron cannon, which were faster and more manoeuvrable and fired a fuller weight of iron shot, more rapidly, than their Spanish counterparts.

The first of this new class was the Dreadnought, launched at Deptford by Mathew Baker in 1573 based on the recommendations of the explorer and Treasurer to the Navy Sir John Hawkins, and every bit as radical and innovative as the Dreadnoughts of the Edwardian era (perhaps more so given the ironclad’s limited usefulness in the First World War). Their names, too, are familiar to this day: Ark Royal, Revenge, Triumph, Vanguard etc.

Four wheel gun carriages were another innovation. Incredibly, the Spanish artillery was lashed to their ships and it took an hour to reload after each broadside. By contrast, the English guns were mounted on carriages which could be rolled in and out with blocks and pulleys for ease of reloading.

When the Armada came up the Channel 15 years later, in a vast and commendably disciplined crescent, the English ships refused to engage in close action and to board, as the Spanish themselves preferred. Instead, they harried and pounded the Armada with heavy shot and picked off the lumbering Spanish ships one by one.

The English crown was not only poor, but reliant on an obstreperous Parliament for money. English attempts at exploration in competition with the Spanish and Portuguese had to be financed by the merchants themselves in the form of new joint stock companies. This was the era when the City of London began to evolve from a port and into a major financial centre. The Muscovy Company, the Virginia Company, the Guinea Company and the East India Company are a few of the names.

When Francis Drake circumnavigated the globe for the first time in 1578, he caused a sensation. Not only was it a formidable feat of navigation and seamanship, he brought back 26 tonnes of silver he had looted from the Spanish, together with spices and other treasures. His investors made an astonishing 4,700% return and Elizabeth I’s own £300,000 portion was equivalent to a year’s revenue and enabled her to pay off her debts.

In the subsequent decade a pattern was established. The ever-mightier Spanish convoys brought the wealth of the New World across the Atlantic, and English privateers tried to steal it (usually without success, it must be conceded). A state of undeclared war soon existed between England and Spain, as the English also supported the Protestant Dutch rebelling against Spanish rule across the channel.

So this is the political and economic context to the Armada. A nation of challengers, entrepreneurs, pitted against a powerful, homogenous state. It wasn’t always pretty and we should not excessively romanticise the Elizabethan seadogs, most of whom were presumably cads and ruffians. But the main point remains true: in 1588, not for the first time, the entrepreneurs won.

George Trefgarne is a partner at Maitland