This paper examines the responses of foreign merchant communities to the
Caroline reforms carried out in Spain between 1759 and 1793. In 1700, the so
called naciones (foreign communities in Spain) inherited strong corporate
privileges from the Spanish Habsburg kings. However, their position progres-
sively deteriorated, especially after the accession of Charles III in 1759.
Against the backdrop of dramatic cuts in their privileges, the naciones adapted
themselves to the new circumstances in different ways: a greater flexibility on
the part of the Flemish and Irish communities could explain the better adapta-
tion of these groups, whereas the French community decided, as early on as
1700, to adopt a strong institutional defence of their privileges. This eventually
proved to be their downfall, as evidenced by their mass expulsion from Spain
in 1793. Traditionally this expulsion was linked to the shock caused by the
French Revolution in Spain. However, there had been a political line drawn
between Caroline reformers and Spanish policymakers on the need to clarify
the privileges of all foreign merchants in Spain dating back to 1759. The re-
forms responded to the traditional pressure from the peripheral cities and their
concerns regarding foreign competition. However, as this paper suggests, these
reforms also surpassed the limits of commercial activity by becoming a key
element in the transformation of the old political framework of relations be-
tween the Spanish king and the naciones. This model definitively went into cri-
sis giving way to a new concept of «the foreigner» as an individual.