Although most eighteenth-century Europeans still considered Spain to be one of the most powerful polities on the continent, by the time Adam Smith published The Wealth of Nations (1776), views about Spain and its empire, then headed by Charles III, seemed to have become unconditionally negative. Despite the size of its population, its terri-tories and the silver mines under Spanish jurisdiction, and its monopoly over the commercial trade with its American colonies, Smith and his contemporaries viewed Spain as one of the poorest nations in Europe. Spain’s economic backwardness was inevitably linked to its rather traditional political system. Smith, for example, believed that Spain remained a quasi-feudal state and that its colonies were ruled by an “absolute govern-ment . . . arbitrary and violent.” The predicament of the Spanish empire, according to eighteenth-century Europeans, stemmed from what many believed to be the mediocre character of Spain’s rulers and citizens. A nation that during the sixteenth and seventeenth centuries seemed to represent the virtues of a learned, vigorous, and expanding Europe was now seen as culturally deprived and isolated, dominated by religious fanatics, and ruled by second-rate monarchs and self-interested elites. For many decades historians have debated the merits of these views—whether they in fact reflected the political and economic realities of eighteenth-century Spain or whether they were sim-ply a part of the ideological trashing that accompanies all international struggles for world power. The loss of its American colonies in the early nineteenth century, the political instability that characterized Spain during the nineteenth and twentieth centuries, and its inability to industrialize until recent times have seemed to many historians sufficient proof that Smith and his contemporaries were essentially right. This view of Spain in time became the interpretative paradigm used to explain an empire that, despite its power, was never able to “modernize” economically and politically.