From Taxation to Indebtedness : the Urban Fiscal System of Milan during the Austrias Domination (1535-1706)

With the establishment of Spanish domination, the city of Milan entered a period of intense transformation. The geopolitical context was changing radically and its involvement in the imperial strategy of the Austrias now required, from the whole Duchy, a substantial participation in terms of resources. Although most of the costs of the military maintenance of the Dominion at the centre of the Po Valley was ultimately sustained thanks to the financial support of other Spanish territories, like Castile and the Realm of Naples, the pressure on the Milan state revenues increased as never in the past. For a considerable time, the interest of historians has been directed towards the accompanying rise in the burden of taxation which has been regarded as one of the main causes of the economic decline of Lombardy during the Spanish age and one of the primary components of the related leyenda negra. This prevailing paradigm - based chiefly on complaints manifest in contemporary sources and heavily influenced by a negative consensus reached in the XIX century - has been called into question over the last three decades. Due to source-based studies, the attention for state finance and fiscal system in the Duchy under the Austrias is progressively losing its historiographical bias and assuming a more fitting perspective, broadened to shed light on all their effective and deep interrelations with social, political and economic aspects. Thus public finance is turning out a crucial element of the state-building process, not eclipsed by foreign domination; it entails far-reaching changes in the administrative machinery, in the equilibrium of social groups, in the balance between town and country and in the relationships between central authority and local communities. Similarly, the nexus with economy is showing a wide array of interactions; the approach concentrated on overemphasizing fiscal effects hampering economic growth is being replaced by an outlook aimed at encompassing the varied linkage between the manifold components of the state finance and all the forces, protagonists and variables of economic life. This enables delving into the real consequences on the whole productive and trade world; increased fiscal pressure appears at present more as an evenly balanced burden between town and country than as a factor that boosts productive costs; expanded public debt seems to be a multi-functional opportunity of investments for a large plurality of subjects rather than a useless consumption of capitals; and the collection and management of taxes look like the training ground for the local providers of financial services. Yet the renewed perspective has not still much engaged local finance during the Spanish domination, neither the finance of the towns, nor the finance of the communities. Despite few scattered sources, local fiscal systems appear exactly the focal point of the many-sided interactions between the Spanish centre and the Lombard periphery, between the exercise of power and the multifaceted local societies, between the strategic needs of what was considered the ‘llave de Italia’ [the key to Italy] and one of the richest European economies of the XVIth-XVIIth century. In particular, the fiscal system of Milan, by far the largest city in the Duchy, represents one of prominent point of observation to grasp in depth the complete intricate interplay revolving around public finance.