Early Silver Cycle Essay Example

The early modern period of 1450 to 1750 was an amazing time of progress for the entire world. This was the first instance of globalization and was initially dominated by Europe. Why? For numerous reasons. As the great empires in China and India fell, the Enlightenment and the Renaissance spurred Europe forward. Also, their populations were not homogenous with various nations and principalities serving their own interests. In addition, merchants had discovered trade routes which made the world smaller than ever before. Portugal, Spain, England, France and the Netherlands assumed their place as great nations that would commence their imperialist policies for the next two hundred years. Globalization during this period is the primary reason the silver standard was developed for the world’s economies. This paper will exam how this came to be.
Silver ingots were first used by Greece back when their civilization was dominant in regards to world trade. China also engaged in using silver as a specie dating back to the Han Dynasty, but during the Ming dynasty, which was still in power at the beginning of and until the middle of the early modern period being discussed, its use was standard. It was also viewed as a sign of personal wealth and many members of the Chinese court often hoarded it. Once European traders discovered routes to the East, Africa and the Americas, Chinese products such as silk and porcelain were quite valuable. Merchants swiftly realized in order to procure Chinese products they must pay for them in silver. Not known for its vast quantities of this metal, China received
much of its silver from Japan prior to opening itself to West, but through international trade, namely the discovery of the Potasi silver mines in Bolivia, silver now flowed freely throughout the world. It was the primary specie for exchange.
Many of the world’s monetary currency names have their roots from this exchange of silver. Due to the massive quantities of silver the Spanish extracted from the Potasi mines their Spanish silver dollar was created. Also the Indian rupee was named for silver as rupa means silver in that nation and it was introduced in that nation during this era, once again from Spanish traders. The British were one of the first nations to adopt the gold standard after the rise of the Industrial Revolution, but there background in silver is represented by the name of their currency as well: the pound sterling. They shifted to the use of gold as currency in 1816 after they sent silver to other nations for payments but purchased exports with gold. This was the source of the transition, as Britain simply had more gold available than silver. As that nation by this juncture was the world’s most thriving economy, they essentially forced other countries to alter their dependence on silver and transition to gold.
Therefore, the Potasi mines and the policies already established in China in regards to the silver standard were the primary reasons silver was so prevalent through the world’s first period of globalization. Chinese products were highly valued and the Chinese wanted silver for their payment. When silver was discovered in the Potasi mines, it was minted and exported all over the globe through the efforts of the Spanish. As a result of a new interdependency and a new world order as power transitioned from the East to the West, the silver standard become the norm with many of the nations who engaged in that early trade still historically identifying with that trade today through the names of their actual currencies.
Hu, Jing. “The Silver Standard in Prewar China: A Blessing or A Curse?” Lund University.
Pomeranz, Ken and Bin Wong. “China and Europe: 1500 to Beyond. What is Modern?”
Asian Topics in World History. Web. N.d. Retrieved from http://afe.easia.columbia.edu/chinawh/web/s5/s5_4.html.