I. The Center of World Trade from the 14th to the 18th Century
The eminent American scholar Andre Gunder Frank, in his work "ReOrient: Global Economy in the Asian Age," proposes a revolutionary thesis: the world economic system has existed for over 5000 years without interruption. Between 1400 and 1800, Asia, and more specifically China, was the economic center of the world, not Europe.
Christopher Columbus sought a new route to the East because of the well-established trade networks between the East and the West, networks so lucrative that explorers were willing to risk their lives. At that time, India dominated the global textile market, while China massively exported handicrafts and agricultural products to Europe and Asia. The trade of Chinese silk, porcelain, and tea generated considerable profits. Thus, China became the undisputed center of world trade.
II. The Silver Empire
In China, the use of silver as currency dates back to the Tang dynasty and consolidated during the Song and Yuan dynasties. Under the Ming dynasty, silver became the official currency thanks to the reforms of Zhang Juzheng, facilitating its circulation and daily use. However, China was not a major producer of silver. While Japan and the Americas discovered significant silver deposits, China traded its prized products like tea, silk, and porcelain for silver, becoming the "ultimate treasury of silver" in the world. Silver rings and other silver products were also highly valued in the markets.
III. The Fall of the Ming Dynasty Due to Silver Shortage
The Ming dynasty's economy heavily depended on silver. When silver imports drastically decreased in the mid-17th century, the Chinese economy collapsed. Taxes increased, prices soared, and unemployment spread, precipitating the fall of the Ming dynasty. The global financial crisis linked to the silver shortage also affected Europe, where governments were forced to devalue their currencies and raise taxes, aggravating their own economic crises.
IV. The Exodus of Chinese Silver
From the 15th to the 18th century, China absorbed the majority of the world's silver thanks to its flourishing trade. However, the arrival of the Industrial Revolution in Europe ended this dominance. The Opium Wars in the 19th century and the resulting unequal treaties led to a massive outflow of Chinese silver, accentuating China's decline. Moreover, the rise of Western and Japanese industries reduced the competitiveness of traditional Chinese products, including silver rings, which were once highly sought after.
V. Japan's Silver Mines
Japan, although considered resource-poor, possessed significant silver mines, notably at Iwami Ginzan. These mines, discovered in the early 14th century, were intensively exploited in the 16th century thanks to the introduction of advanced techniques by Korean artisans. Japan thus became a major producer of silver, influencing global trade by providing the silver necessary for transactions with China.
VI. The Great Silver Mine of Potosí
In 1545, the discovery of the silver-rich mountain of Potosí in the Bolivian Andes revolutionized the global economy. This mine, exploited by the Spaniards, provided an immense quantity of silver, fueling the Spanish empire's economy and global trade. However, the brutal exploitation of indigenous workers made Potosí a true "gateway to hell."
VII. The Manila Galleon Trade
In 1565, the Spaniards established a trade route between Manila and Acapulco, using large galleons to transport silver from the Americas to Asia in exchange for silk, porcelain, and other luxury goods. This route, operated for over 250 years, facilitated the massive exchange of goods and silver rings, linking the economies of Asia and the Americas. Silver rings became highly appreciated and sought-after trade items.
VIII. The Silver Route in East Asia
The discovery of Japanese silver mines in the 16th century stimulated intense trade between Japan, Korea, and China. Japanese and Korean merchants transported large quantities of silver to China, where it was exchanged for coveted Chinese products. This silver route strengthened economic ties between these three nations and played a crucial role in regional trade.
IX. Spain's Unjust Wealth
Spain amassed immense wealth by exploiting the silver mines of the Americas, but this wealth did not transform Spain into a powerful and sustainable nation. Under the reign of Philip II, extravagant spending and incessant wars depleted the country's resources. The lack of investment in infrastructure and industry, combined with repressive economic and religious policies, led to the decline of the Spanish empire.
X. The Ottoman Tragedy of Silver
The Ottoman Empire, controlling the trade routes between Europe and Asia, initially benefited from the influx of American silver. However, this abundance of silver caused massive inflation, destabilizing the empire's economy. The prices of food and raw materials increased, while state revenues decreased, leading to a fiscal crisis and popular revolts.
XI. The Safavid Silk and Silver Route
Under the reign of Shah Abbas I, the Safavid kingdom of Iran strengthened its position as the main silk supplier to Europe. In exchange, Iran received large quantities of American silver. This silk and silver route allowed Shah Abbas to finance his military and administrative reforms, consolidating the Safavid power and inaugurating a period of prosperity.
XII. The Secret of Europe's Rise to Power
The discovery of the New World and the exploitation of American silver mines brought Europe an immense wealth. This influx of resources allowed European nations to finance their industrial development, build infrastructure, and promote technological innovation. Moreover, the competition for control of new trade routes stimulated military and economic expansion, propelling Europe to the top of the world hierarchy.
In conclusion, the global history of silver illustrates how economic dynamics and resource flows have shaped civilizations through the centuries. From the trade of silver rings to vast trade networks, silver has been a powerful engine of economic development and social transformations.