In this volume, Drelichman and Voth address one facet of the “Black Legend,” a long historiographical tradition that portrays Spain and its rulers in a consistently negative light. They focus on the Philipp II's fiscal affairs, especially his dealings with creditors, which the historiography portrays as a particularly disastrous Habsburg policy. The traditional historiography of the fiscal crisis faced by Spain's Philipp II stresses the monarch's ineptitude as the cause of the several defaults the King inflicted on Spain's creditors. Drelichman and Voth advance a new interpretation; they argue that Philipp II and his advisors were in fact following sound governance principles, and that bankers were neither surprised nor unfairly treated by this sovereign borrower.

The reinterpretation rests on the author's use of a new set of documents of the Archivo General de Simancas (the fiscal accounts for the period 1556 through 1598). These sources suggest that Philipp's Treasury saw its ups and downs, but was always solvent. Using their evidence, the authors raise a parallel question: If the Spanish were such bad creditors, why did bankers (some of whom had been the victims of earlier Spanish defaults) return again and again to lend to Philipp? Drelichman and Voth argue that the answer is straightforward: because it was a good deal. Over the long run, bankers who kept lending to the Spanish Crown did well, even if in the short run they had to tolerate involuntary write-downs and delays.

In addition to their specific argument, the book also contributes with a careful synthesis of the history (especially economic and financial history) of Spain at the end of the fifteenth and the sixteenth centuries. The authors provide a detailed enumeration of the tools the Spanish crown used to fill its coffers. While these chapters (2 and 3) have a didactic tone and do not reflect original research (the Spanish historiography covers the same territory), they provide background and firm help support the book's main argument.

Their central argument proceeds from a key assumption: the primary culprit in Spain's financial situation was war. The Crown wanted to expand the realm, and war was a central tool for achieving that aim. Royal income could not cover the costs of war, and those wars spiraled in number and intensity, increasing the stress on the Treasury. Worse yet, during Philipp II's reign Spain lost more and more of those conflicts, making it even harder for the Treasury to finance the next round of military endeavors. Here the authors rightly focus on two main tools the Treasury used to raise money: taxes, which needed the approval of the provincial assemblies, and the flow of American silver into Seville. Without the latter income source, none of Philipp's wars would have been tenable.

This reviewer agrees with Drelichman and Voth's two central conclusions. First, Philipp II's policy was not the erratic, inconsistent improvisation that the historiography has claimed; it was rational, even deft, in dealing with the Crown's fiscal situation. Second, the “Black Legend” has no basis, at least economically. But the book would make a more profound contribution if it had engaged with the extensive literature on this topic, especially the works of Carande, Martín Ruiz, and Marcos Martín. (Drelichman and Voth mention them but do not really discuss their views.) Similarly, the authors would have done well to consider a broader range of casual forces before coming to their conclusions about what happened in sixteenth and seventeenth-century Spain. Most importantly, there is good reason to believe that the Kingdom of Castille was already approaching a crisis in the mid-fifteenth century. (For this argument see, especially, the work of Angel García Sanz.) The underlying economic situation cannot be ignored if we are to understand Philipp's situation and behavior.