Global Silver Trade Impact (16th-18th Century)
Global Silver Flow: 16th to 18th Centuries
The social and economic effects of the global flow of silver from the mid-sixteenth century all the way to the early eighteenth century had many diverse and significant effects worldwide. Silver was the economic backbone of China, and was the main source of commodity money used. With the rich black flint ore found at Potosi, according to Spanish royal records, 326 million silver coins were extracted.
Silver’s Role in China
Silver was the currency used in China and was very valuable among the Chinese and Japanese people alike, and it fluctuated in the markets. In fact, the Portuguese went to Japan just to acquire silver coins, and from there, they would take those silver coins to China and bring back Chinese goods such as:
- Gold
- Perfumes
- Copper
- Porcelain
- Many other luxury goods
The Portuguese used silver to their advantage in China. Ye Chunji, a county official during the Ming dynasty, when silver reached its apex in China, said, “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.” This statement suggests that while silver was valuable enough for a frugal person to save, it was insufficient for an extravagant and profligate lifestyle.
The Ming Dynasty and Taxation
Later, the Ming dynasty began disbursing little of the precious metal but required it for national taxes. As a result, the prices of certain items, especially grains, sharply decreased. Thus, the fluctuation of silver prices was prominent in Chinese society.
Silver’s Impact in Spain
In Spain, a different scenario was unfolding: the economy was plagued by high prices. However, the Asian market and its prices were very attractive, especially since Spain had a plethora of silver from their sources in the West Indies and the “silver mountains,” which they minted into coins. Thus, they were able to acquire many Asian luxuries. While silver was primarily a metal to them, the luxuries it and gold could acquire were astounding.
Conclusion: Global Effects
In conclusion, silver was an important and valuable part of global society due to its use as commodity money. The effects of this trade in silver and other commodities were socially and economically significant, often benefiting Europeans.