The age of exploration and colonialism was in fact the first period of globalization starting in the early Modern and going through the modern period. European explorers, traders, merchants and governments were primarily interested with trade with Asia and the Americas. The connection between silver from Spanish America and Asian spices and luxury products was one of the main drivers of the world economy from the sixteenth to the eighteenth century. As always economic changes seem to have another, even larger social impacts. Greater interconnectivity between Europe, its American colonies and Asian markets and its connection to the global flow of silver led to greater acceptance and consumption of Asian luxury products, that were bought with silver, second, it led to inflation and other ill economic effects on these Asian markets and third silver extraction happened on the back of native slave labor in Spain’s American colonies.
Silver wasn’t even the most important issue to discuss during this period of history, but ultimately it is a symbol of the way that world changed since the middle of the fifteenth to the eighteenth century. This change can simply be called the Era of Colonization or alternatively the first wave of globalization. Globalization – trade – ultimately depends on a way of carrying out that trade and in a world where there was no paper currency, silver was the key to making this trade happen. The flooding of the world market with silver coming from mines from Spain’s new world mines entirely changed the way the world economy functioned. From Mexico to the Asian markets where that silver was used to buy the luxury goods so desired by Europeans. The flow of silver can be simply explained on these few documents and it clearly encapsulates how it changed the world economically and socially.
Silver was primarily mined in Spain’s American Colonies, largely in Mexico and Argentina which is where the priest Antonio Vazquez de Espinosa saw the terrible conditions in which the Native Americans working in those silver mines lived under. Espinosa said that he saw that “more than 3,000 Indians worked away with hard picks and hammers, breaking up that flint ore; and when they have filled up their little sacks, the poor fellows, loaded down with ore, climb up those ladders or rigging, some like masts and other like cables, and so trying and distressing that even an empty-handed man can hardly get up them.” (De Espinosa) This was how the Spanish were able to acquire such amazing wealth. Espinosa said that as many as 326,000,000 silver coins were taken from the Potosi mine according to the records. (De Espinosa) A Ming dynasty official interpreted this abundance of New World silver species as “Silver mountains which they mint into silver coins.” (Qiaoyuan) This abundance of silver changed how trade was done in Asia largely due to how much silver flooded the market there, to the point where Chinese silk that was worth 100 silver bars was sold for 200 or 300 in the Philippines, another Spanish colony. (Qiaoyuan) These two documents show how the amount of silver that was being excavated by the Spanish using slave labor in the new world changed how the world economy functioned during the seventeenth century.
The preceding paragraph showed how Spanish silver changed the lives of the Native Americans that worked in the silver mine and how it changed the world economy during the early part of the seventeenth century. This was a reflection of how Silver flows changed the life of people in Spain and in China. One of the features of a world based on bullion and mercantilism is that there was a limited and fixed amount of that bullion on the market at the time. This manifested itself in China and in Spain in two very different ways according to the documents. In Spain, silver flowed outwards towards China and in return for high priced Asian commodities. (Mercado) In contrast, in China, the place where all of that Spanish silver bullion was flowing had a completely different set of issues on its hand. Silver actually caused a depression in the price of grain in spite of poor harvests as described by Wang Xijue a Ming dynasty official. The scarcity of silver in China led to prince of grain falling which resulted in farmers receiving lower returns for their work which led them to put less land into cultivation. (Xijue) This cycle was created in large part because of the Chinese government’s tendency to hoard the silver it had received instead of using it in the local economy (Xijue) Silver had created disincentives for Chinese farmers to grow food and it was largely because of how important the commodity market and the inflow of silver had become in the eyes of the Ming government.
The flooding of Asia with Spanish silver even changed the way that business was done in Asia even the way that bills were paid, and it resulted in the integration of the closed off Japanese into the theater of world trade. According to Ralph Fitch, a British Merchant, in Asia described how the Portuguese went from Macao “to Japan to carry much white silk, gold, perfume, and porcelain and they bring from Japan nothing but Silver”. (Fitch) The Portuguese that Japanese silver to their advantage in China buying all of the luxury goods that were such a key part of the trade between Europe and Asia. Silver, furthermore, changed the entire basis of how commerce was done in Hangzhou according to Xu Dunqiu Ming, it used to be that you could get cloth dyed and then settle the account with whatever kind of barter from “rice, wheat, soybeans, chickens or other fowl.” (Ming) After the introduction of plentiful silver, cloth dyers in Hangzhou would want all their payments in silver in the form of an advance from a moneylender. Silver truly changed the way business was done in Asia during the sixteenth and seventeenth century and it usually was much more beneficial to Europeans than the locals selling the goods.
The impact of silver on the world economy can interpreted by the two different documents, one from China the other from England. The first came from China and the other from England, but they both explain how consumption had changed the world forever. The first a brief two lines from a Ming dynasty county official regarding wedding expense “the frugal man with only one bar of silver currency can have something left over, whereas the extravagant man with a thousand can still not have enough.” (Chunji) This shows how consumption is something that can’t be controlled and it goes along nicely with Charles D’Avenant’s feeling regarding the necessity of Asian luxury items for people of all sorts of social standing both in England and the colonies.(D’Avenant) Both sides had become dependent on each other and silver was out made that relationship possible.
Finally, although many little snippets of information are definitely useful for answering questions regarding the role of trade and of silver on the world economy a very good document or set of documents to help expand our knowledge of these issues would be trade ledgers or government income trade ledgers that kept track of the inflow and outflow of gold and silver over an extended period of time. Trading houses, governments, and other organizations would have been intimately interested in keeping track of their bullion and that would be a very enlightening thing to use for bettering our understanding of silver flows during this period
Works Cited
Chunji, Ye, county official during the Ming Dynasty
De Mercado, Tomas, Manuel of Deals and Contracts, Seville, 1571
Xijue, Wang, report to the emperor, 1593.
Fitch Ralph, accounts of his travel to the East Indies, 1599
Ming, Xu Dunqiu, The Changing Times, 1610.
Vazquez de Espinosa, Compendium and Description of the West Indies
Qiayuoan, He, Report to emperor, 1630
D’Avenant, Charles, “An Essay on the East-India Trade,” 1697
