Spain was a durable but not a developed metropolis. At the end of the eighteenth century, after three centuries of imperial rule, Spanish Americans still saw in their mother country an image of themselves. If the colonies exported primary products, so did Spain. If the colonies depended upon the merchant marine of foreigners, so did Spain. If the colonies were dominated by a seigneurial elite, disinclined to save and invest, so was Spain. The two economies differed in one activity: the colonies produced precious metals. And even this exceptional division of labour did not automatically benefit Spain. Here was a case rare in modern history – a colonial economy dependent upon an underdeveloped metropolis.

During the second half of the eighteenth century Bourbon Spain took stock of itself and sought to modernize its economy, society and institutions. Reformist ideology was eclectic in inspiration and pragmatic in intent. The starting point was Spain's own condition, especially the decline in productivity. Answers were sought in various schools of thought. The ideas of the physiocrats were invoked to establish the primacy of agriculture and the role of the state; mercantilism, to justify a more effective exploitation of colonial resources; economic liberalism, to support the removal of restrictions on trade and industry. The Enlightenment too exerted its influence, not so much in new political or philosophical ideas as in a preference for reason and experiment as opposed to authority and tradition. While these divergent trends may have been reconciled in the minds of intellectuals, they help to explain the inconsistencies in the formation of policy, as modernity struggled with tradition.