Chapter 17 Spanish colonial America and Tokugawa Japan led the world in silver production from 1500 to 1750. The global flow of silver had several effects on social and economic life in various areas of the world. It created a growing inequality in social structure and caused the standard of living to go up. Also, it caused a significant inflation of prices, it destroyed the Spanish economy, and it allowed other European nations not only to afford Asian goods, but make profit off of them by reselling them to other nations.
Imports of silver caused a growing inequality between the rich and the poor. According to writer Xu Dunqiu Ming, trading became difficult after silver replaced bartering as the method of payment, being that silver was scarce and it was highly difficult for the poor to obtain silver (Doc. 5). Ming has a valid point of view because, being a writer, Ming is not affected by these events, and represents those affected with a real, valid story.
Ming dynasty court official Wang Xijue makes a report to the emperor discussing how silver is scarce, yet the government requires it for taxes and disburses little of it in its expenditures, creating problems for the poor in the districts (Doc. 3). The court official is simply making an honest suggestion with the thought of improving the empire in the back of his mind, seeing the problem this situation could turn into if improvements aren’t made. Not only were the poor struggling to find silver to get by, but they were also used in forced labor systems to retrieve the silver.
More than 3,000 Indians worked hard down in the Potosi silver mine in harsh conditions only to have it sent to Spain and eventually other nations as well (Doc. 6). The author of the excerpt in document six, a Spanish priest by the name of Antonio Vazquez de Espinosa, believes in doing well by God and sympathizes for the men while disagreeing with the forced labor system. Along with causing this growing inequality in social structure, the inflow of silver also caused the standard of living to go up.
People began spending their money on extravagant luxuries that weren’t commonly bought prior to the abundance of silver being brought in (Doc. 1). Ye Chunji, a county official during the Ming dynasty, realizes that silver is being sent out in large amounts to other nations for these luxuries, so he issues this order in hopes that it would help retain the money to the Chinese government in order for it to improve. The global flow of silver also impacted economic life. Due to an increase in the income of silver (Doc. 6), prices began to skyrocket.
Areas like Spain spent large amounts of silver on luxuries, but they also wasted it on items such as granite cobblestones, which they used as ballast for their ships (Doc. 2). Tomas de Mercado, the Spanish scholar who wrote the excerpt in document two, has a negative point of view on this situation, and being that he is not affected by the silver trade, his point of view is truthful and unbiased. He realizes that Spain’s lack of a sufficient banking system is harming the economy and causing trade deficit and is critical about the fact that the silver being sent into Spain is flowing right back out.
Although Spain is being harmed by the global flow of silver, other nations are benefitting. According to British merchant Ralph Fitch, European nations go to China with their silver, buy goods, and then bring them to other nations such as Japan, who couldn’t trade with China because of its Tokugawa isolation policy, to resell the goods at a higher price (Doc. 4). Being a merchant, Fitch’s account may have been somewhat bias, and he only sees the good that his trade brings.
At that time, the Chinese had a ban on foreign trade, but they began to see the profit being made by other nations. He Qiaoyuan, a Ming dynasty court official, made a report to the emperor regarding this ban and how they should repeal it. Like all court officials, He Qiaoyuan was looking at this situation as an opportunity to benefit the empire. Europe continues the trade because even though it only supplies luxuries and nothing of real use, they do not want to quit this trade and leave it for other nations to take over (Doc. 8).
English scholar Charles D’Avenant, the author of the excerpt of the essay in document eight, is critical of the trade at first, but he then begins to see the benefits that the trade brings to Europe. Overall, the impact of silver on Europe was mostly positive, except for areas like Spain and poor Europeans. Spain’s economy suffered from an insufficient banking system and its economy was destroyed in the long run (Doc. 2). Meanwhile, a great profit was made by buying and reselling Chinese goods, even if some of the spending was wasteful (Doc. ; Doc. 8). The lower classes received the poor end of the deal, being pushed into having more debt and being used in forced labor systems (Doc. 6). Asia used this time to see the impacts silver has made in the other areas and contemplated making several changes in order to improve the government. Silver had caused the standard of living to go up, forcing China to try and limit the amount of money being sent out to other countries in order to retain money in the Chinese government (Doc. 1).
Growing inequalities in social structure left the poor struggling to get by, so reports were made to the emperor in hopes that some sort of improvements would be made (Doc. 3; Doc. 5). Lastly, the reselling of Chinese goods made them realize they were missing out on large amounts of profit, so a suggestion was made on repealing the ban on foreign trade (Doc. 7). The global flow of silver had mostly positive effects on the world. Another source that would have been beneficial to the understanding of the reader about the impact of silver would be an account of working in the mines from one of the laborers in the Potosi mine.
An explanation of the work they had to do and how it impacted their lives would have been useful. A document from the point of view of an Asian peasant on how silver impacted their daily lives and how hard it became for them to buy and trade items would have also been beneficial. Lastly a document from the point of view from a farmer explaining the difficulty they had trading, being that they would trade things from the farm for whatever they needed, would have also clarified the impact of the global flow of silver on the world.