The unexpected consequence of the gold rush that the Spanish conquistadors began in the sixteenth century was the demise of the smaller political entities in Europe. In 1500, there were five hundred political entities in Europe—in 1900, there were twenty-five.
A significant part of the enormous revenue that Spain, Britain, Portugal, and the Dutch were generating from their colonies was poured into their military sector. France, Germany, Belgium, and Italy rushed to conquer their own colonies and, while their profits were not as substantial as what Spain, Britain, Portugal, and the Dutch were making, they garnered enough revenues to build a military that could protect their borders.
When nations upgrade their military, wars become inevitable. Europe became the land of unending warfare. The competition in Europe between 1500 and 1945 (end of the Second World War) was brutal. The Europeans were killing each other wherever they could, with whatever weapons they could—they fought in Europe, in the colonies, in the seas, and after the discovery of aviation, in the sky. The smaller states could not compete at this level of militarization and brutality, and they were devoured by the bigger states.
The intense warfare, which showed no sign of ending, made it necessary for the big European powers to make relentless advancements in weapons and tactics. They had to pump ever increasing amounts of resources in their military sector. The wars in Europe, before the rise of the conquistadors (the gold-bearing boys of Spain), used to consume a few hundred lives, but by the twentieth century, the European powers had the capacity to slaughter millions.
The First and the Second World Wars saw the worst carnage in history, and with these two wars, the European powers lost their colonies. They were financially bankrupt and politically and culturally demoralized. The power to dictate the world’s political and financial agenda passed out of Europe and moved into the USA and the Soviet Union. Europe became the battleground for the two superpowers: the USA and the Soviet Union.