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Interregional trade network analysis

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  • Pages: 3
  • Word count: 678
  • Category: Trade

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Historical Context- The global flow of silver from the mid- sixteenth to the early eighteenth century had monumental social and economic effects throughout the world. The Chinese began requiring silver as a form of taxes and trade fees. Also, Spanish colonial America and Japan were leaders in silver production at this time. The increase in the global flow of silver from the mid- 16th century to the early 18th century accounted for vast social and economic effects in all areas connected with the trade of silver.

World trade was booming due to an interregional trade network. It created many great economic opportunities. After China acquired silver as their currency and would exchange goods primarily for silver, the value and importance of silver increased. Thus, because people had to rapidly search for a supply of silver, regions in which silver was lacking because of its geographical location had to rely on trading more goods to gain silver.

However, regions in which silver was abundant made it easier for these areas to continue trading prominently with China. The demand for silver created an increase in labor. This helped societies and their economies with a wide variety of effects seen throughout China, Spanish countries, and England, but also hindered them simultaneously. Social life was greatly dilapidated during this time because of the global flow of silver. Wang Xijue reports people in his hometown are gaining less profit from their labor which is to cultivate land.

However, because silvers value increased for trading, using grains such as rice for currency was no longer valuable and thus, the price of grain was lowered(3). Furthermore, the dye ships in China would previously trade dyed clothing for rice, wheat, soybeans, chickens or other fowl whereas, silver has become a more valued currency limiting the warrant for the use of other types of currencies. Therefore, people didn’t buy wheat, rice, etc. , because it was no longer worth anything.

This caused a decrease in profit for their livelihood, which left these workers unemployed and with little income (5). In addition, another example of social decay due to silver was the labor of 3,000 Indians working in the Spanish mines. The Indians worked for cheap, hence, the Spanish mined an immense amount of silver for less money. This hindered the development of the Indians because they were forced into labor which didn’t allow them to socially develop. Spain gave China larger amounts of silver to receive more luxury goods like pottery and silk from China (6).

Being that the priest is Spanish, he clearly supports the use of Indians for the labor of mines for silver to benefit Spain. In conclusion, the global flow of silver had a generally negative social impact. As well as having a negative, social impact, the global flow of silver caused many economic changes between the countries involved. In Spain and Portugal silver proved to be beneficial economically. The economy of Spain booms as they greatly use silver to their advantage when trading with china (4).

Ralph Fitch, a British merchant wrote about his travels to the East Indies. He is not from that area therefore, his account is unbiased and since he is a merchant it can be assumed he most likely witnessed the process of trading for silver. Hence, it is evident from his accounts that Spain’s economy heavily relied on the value of silver. On the other hand, Tomas de Mercado’s perspective is that Spain is being ruined by high prices (2), however, because he is just an observer and less reliant on trade, it is merely just an observation.

In addition to its trading benefits with Spain, silver created a market in Spain for luxury Chinese goods (2). The Spanish had such an abundance of silver, to the Chinese it seemed they had silver mountains (7). To the Chinese, it seemed Spain had so much silver because they were so reliant on it. Similar to how today Saudi Arabia is one of the richest areas in regards to resources, the rest of the world admires the abundance of their resources and commences trade with them.

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