Credit and land from below: the accidental but successful experience of Catalan smallholders in the eighteenth century

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By Rosa Congost (University of Girona), Ricard Garcia-Orallo (University of Barcelona), and Enric Saguer (University of Girona)

This blog post is based upon the authors’ article forthcoming in the Economic History Review.


Could credit help the poor to escape poverty? Historians tend to look upon the indebted poor, whenever they appear in the documents, as being in serious economic difficulties. It is generally assumed that the poor did not have access to long-term credit and that, when they did, it was on terms that contributed to worsening their situation. The credit spiral ended in dispossession. In contrast, some of the literature produced in the last decades by development economists has reversed the perspective: the lower classes’ difficulties in obtaining credit are often seen as a main obstacle in the struggle to overcome poverty. The question of credit has provided those economists with a particularly apt field for checking economic theory against practical cases (Banarjee and Duflo 2011).


Without underestimating the negative effects that credit circuits could have exerted on the poor in ancien régime societies, we believe that it is possible to observe episodes in which credit would have played an important role in shifting some sectors of the population out of poverty (Brennan 2006; Schofield and Lambrecht 2009). Such was the case of the treballadors in the Girona region during the second half of the eighteenth century; see figure 1.


In this area, the term treballadors (literally workers) was reserved for those who earned a daily wage. In their ranks we find the poorest groups of the rural society, although many of them were also smallholders. There is ample evidence that, during the second half of the eighteenth century, some of the treballadors managed to improve their economic situation significantly, with the evidence including the assets detailed in their inventories (Congost et al., forthcoming), the dowries they paid or received (Congost and Ros 2013), and the gradual expansion of their smallholdings (Congost et al. 2018). As a culmination, by the end of the eighteenth century, some of them began to distinguish themselves with a new socioeconomic label: menestral. This improvement did not occur elsewhere in Spain or everywhere in Catalonia, but we have found it for the region of Girona.


Figure 1.   Analyzed area: the Registry of Deeds of Girona, 1768-73

Screenshot 2022 10 13 at 16.47.00

The Girona case is an example of how some of the poorest social groups were able to benefit by the lowering, in 1750, of the interest rate of annuities (censals) from five to three per cent, one of the lowest rates in Europe. The reduction in the interest rate was not introduced to help the poor, but to reduce the debt burden on aristocratic and institutional estates. Therefore, if the measure did play an important role in the social improvement of some of the poorer groups, this should not be attributed to its proponents.


On the other hand, despite what would be expected in strictly market terms, this reduction in the interest rate did not affect the supply of capital because the market was dominated by ecclesiastical institutions which were obliged to invest or reinvest donations and testamentary bequests in annuities. In many areas, the reduction could have been followed by a contraction in the credit supply. However, our case study reveals that this did not always happen, and, therefore, it is important to analyse why.


Figure 2.   Socio-professional status of lenders and borrowers in annuities, 1768-73

Picture 1
Source: Arxiu Històric de Girona, Registre d’Hipoteques, books 1-13. Note: The diagram contains a total of 3,580 credit operations (annuities), for a total value of 792,440 Catalan pounds.

The key point in the region of Girona was the close tie between emphyteusis and annuities, two traditional ways of getting hold of land and money. The results seem to support the theories suggesting that cheap money can help the poor to get out of poverty, but they also alert us to the need to have a good understanding of the social context—including the possibilities and opportunities for access to resources—in which credit operations take place.

It is unlikely we would have arrived at this conclusion if we had not fought off two tendencies which, in our opinion, remain too entrenched in many historical studies. The first is the tendency to see the results of certain reforms as expected. We would do well to remind ourselves of the reflections of Merton (1936) and Hirschman (1991) on how easy it is for intellectuals to assume that any social improvement is impossible. The second is the tendency to view debt among the lower classes more as irrefutable proof of their poverty rather than as a possible sign of their initiative, thereby failing to heed the recommendation of Sen (1981) to see the impoverishment or enrichment of populations as something that also depends on their own capacity for initiative. For these reasons, we think that historical credit studies should better integrate an analysis of social differences and include the poor.


To contact the authors:




Banerjee, A. V. and Duflo, E., Poor economics: a radical rethinking of the way to fight global poverty (New York, 2011).

Brennan, T., ‘Peasants and debt in eighteenth-century Champagne’, Journal of Interdisciplinary History, 37 (2006), pp. 175-200.

Congost, R. and Ros, R., ‘Change in society, continuity in marriage: an approach to social dynamics through marriage contracts (Catalonia, 1750-1850)’, Continuity and Change, 28 (2013), pp. 273-306.

Congost, R., Gifre, P., and Saguer, E., ‘More than just access to land: emphyteusis and the redefinition of property rights in north-east Catalonia (eighteenth and nineteenth centuries)’, in R. Congost and P. Luna, eds., Agrarian change and imperfect property emphyteusis in Europe (16th to 19th centuries) (Turnhout, 2018), pp. 135-56.

Congost, R., Ros, R., and Saguer, E., ‘More industrious and less sober than expected: evidence from inventories of agricultural workers in north-eastern Catalonia (1725-1807)’, forthcoming.

Hirschman, A. O., The rhetoric of reaction: perversity, futility, jeopardy (Cambridge, 1991).

Merton, R., ‘The unanticipated consequences of purposive social action’, American Sociological Review, 1 (1936), pp. 894-904.

Schofield, P. R. and Lambrecht, T., eds., Credit and the rural economy in north-western Europe. c.1200-c.1800 (Turnhout, 2009).

Sen, A. S., Poverty and famines: an essay on entitlement and deprivation (Oxford, 1981).

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