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Beasts of burden by Scrymarch (4.00 / 1) #1 Sun Apr 27, 2008 at 04:48:34 AM EST

This is a point Guns, Germs and Steel works over in a bit of detail. Presumably you're aware of the book, I can only repeat what everyone else has said, it's a great read on the topic.

I hadn't really thought about new world silver like that before. Can you also view it as a symptom of the economy itself expanding, through colonisation?
_{The Political Science Department of the University of Woolloomooloo}

Symptom of an expanding economy by TheophileEscargot (4.00 / 1) #2 Sun Apr 27, 2008 at 06:06:34 AM EST

Interesting: I hadn't thought of it like that. The uneven distribution might have been a problem. According to this silver production expanded by "an order of magnitude".

However, compared to the total amount of silver around, that wouldn't necessarily have been that big a deal.

Suppose that the old world had been mining 1 million units per year for a thousand years: that would mean there's a billion units in circulation. Even if the new world mines instantaneously expanded production to 10 million units per year, that's only an inflation rate of 1 percent. Tiny.

Economists always seem to use Spanish silver and gold inflation as an example of the problems of Mercantilism, but Eakin doesn't mention it at all. Maybe it's just a myth?

On "Guns, Germs and Steel": I might read it sometime when I've got a smaller to-read list. As you know I'm not a big fan of the "Non-historian discovers Universal Laws of History which back up all his beliefs" genre. Maybe one day I'll just grit my teeth and do "Guns, Germs and Steel", Samuel Huntingdon's "The Clash of Civilizations" and Peter Turchin's "War and Peace and War" back to back. Might be worth it for the snark value alone ;-)
--
"Everything is vague to a degree you do not realize till you have tried to make it precise." -- Bertrand Russell
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: Snark value by Scrymarch (4.00 / 1) #6 Mon Apr 28, 2008 at 11:53:45 AM EST

I can see it now ... the only thing driving you forward being the buckets of scorn you can pour on them at the end ... this is half the reason I enjoyed No Logo :)
_{The Political Science Department of the University of Woolloomooloo}
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The silver inflation disaster seems a bit mythical by TheophileEscargot (4.00 / 1) #4 Sun Apr 27, 2008 at 11:20:23 AM EST

I've done a bit of Googling around and found a couple of sources.

They originally credit it to Adam Smith. I've looked through the Wealth of Nations and he does talk about a modest fall in silver prices due to the new world mines. He doesn't seem to think it was a disaster though. In fact he explicitly says that this doesn't affect interest rates. He goes on quite a bit about how since money is only valuable for what it can purchase, so this effect isn't that important.

Those articles cite as evidence:

A 15-fold increase in the currency of France, over a century. I make that 2.8% per year.
In Naples, an increase from 700,000 to 18 million ducats between 1570 and 1751. I make that 1.8% per year.
Gold inflation of 300% in 100 years. 1.1% per year.

Those aren't even inflation rates, just increases in currency. Given that populations and economies were getting larger, the actual inflation rate must have been even lower.
--
"Everything is vague to a degree you do not realize till you have tried to make it precise." -- Bertrand Russell
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: Silver inflation by Scrymarch (4.00 / 1) #5 Mon Apr 28, 2008 at 11:15:19 AM EST

Well of course these things are multi-factorial ... I haven't followed up the European side much before, but I remember John King Fairbank citing it as one cause of the decline of the Ming dynasty in his A History of China. The availability of silver destroyed the Chinese terms of trade and tax base, like many Chinese dynasties they had a Ron Paul commodity standard based on silver. So it was a fairly mainstream theory on that side, until recently at least.
It's interesting to hear Adam Smith's take ...
The quick google searches on the same topic seem to see the use of silver as a symptom of Ming commercialism. Eg.
_{The Political Science Department of the University of Woolloomooloo}
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