Silver can be seen as the worlds first global commodity, and was a key part in

the worlds first global trade network. Silver linked the two continents of North America,

Asia, and Europe, acting as a major trade good in the first sustained trade between the

three continents. The silver trade had many unique patterns, and these can be

explained by the supply and demand of silver around the world. Conversion to a silver

currency in Ming China, newly found deposits of silver in Japan and Spanish America,

and European demand for luxury goods are all underlying forces that shaped the global

silver trade between 1550 and 1800.

The first key to unlocking the patterns of the global silver trade is uncovering why

silver was traded, as this would only happen if there was a profit in selling silver.

Originally, the Ming dynasty used paper currency, but rapid inflation soon caused it to

be unusable, with silver gradually taking over as the currency of choice. This trend

culminated in the Single-Whip tax reform, which consolidated taxes under a single tax to

be paid in silver. Suddenly, every business in China was demanding silver, as illustrated

in Xu Dunqiu Mings essay The Changing Times: Now, when you have your cloth dyed,

you receive a bill, which must be paid in silver. Ming was most likely writing at the time

of this reform, and being a writer, had a contemporary and accurate account of the

trends going on at the time in China. This demand for silver caused large exports of

silver to China, as exhibited by Toms de Mercado, a Spanish scholar, who remarked at

the amount of silver being shipped to China from Manila: The streets of Manila could

be paved with granite cobblestones brought from China as ballast in Chinese ships

coming to get silver for China.

 The converse side of this high demand for silver was the simultaneous discovery

of large silver deposits in Spanish America and Japan. Large amounts of silver were

mined and shipped to Europe and Manila for eventual trade in Asia. By far the largest

silver deposit was Potosi, in Spanish America. The magnitude of the silver extraction

can be demonstrated by Document 2, a painting depicting the mining and processing of

silver. This was painted by an anonymous painted, so there is a chance that there is no

criticism toward the Spanish exploitation of natives or praise of Spanish power. Also, the

painting is done in a style such that there are no dramatic or emotion provoking

depictions, suggesting that it could be an objective view of the Spanish operations at

Potosi. All in all, the enormous amount of wealth extracted at Potosi exceeded 326

million silver coins This does not count the great amount of silver taken secretly to

Spain, as Charles DAntonio Vasquez de Espinosa, a Spanish priest, recorded.

The final piece in the puzzle of the patterns of the global silver trade was the

European desire for Asian luxury goods. Europeans used silver, a commodity in its own

right, to trade for these goods such as silk, tea, and porcelain. Silver wasnt simply a

currency to underwrite a European trade deficit, as gold, a supposed currency, flowed

out of China at the same time. The Portuguese would use Japanese silver to buy

Chinese luxury goods, as described by Ralph Fitch. Fitch was a British merchant at the

time, so his account would most likely be an observation on the trade between China

and Portugal from the perspective of a merchant who would want to get involved in this

profitable trade as well. The British, too, bought Asian goods with nothing but silver and
sold them in Europe due to high demand, as recorded by Charles DAvenant, an

English political economist. DAvenant was writing during a debate on restricting Asian

imports, arguing that they shouldnt be restricted. His credentials as a political

economist, the scholarly audience he is writing for, make this account reliable of the

trade balance in England at the time.

Silver had a varying impact on the various countries which were the most heavily

involved in the silver trade. In Spain, silver was used to fund military expeditions in

Europe, and Spanish authorities monopolized the production of silver, eliminating any

traces of market capitalism. In Japan, silver profits were used to fund wars to unite the

country under a single shogun, were invested in public works, and the government

worked with merchants to create market capitalism. In China, silver was used more and

more as an official currency. When silver prices crashed due to supply meeting

demand, Spain lost most of its income, and thus power. Japan fared well, as its

economy wasnt reliant on silver. Its early market capitalism also set the stage for its

industrial revolution in the 1800s. Finally, in China, high inflation caused prices to rise in

silver, and this weakened the reigning Ming. he devaluement of silver set the stage for

the takeover of China by the Qing.

Another example of a commodity driving trade patterns can be found in the salt

within West Africa. Supply of salt and demand for gold in the Saharan desert and North

Africa drove a trade in the Niger river area, where gold was mined. These factors
contributed to the vast caravan trade that took place across the Sahara, and the

emergence of cosmopolitan trading cities such as Timbuktu. Also, the interactions with

North African merchants caused the conversion of West African kings to Islam. All in all,

pattern of global trade can be explained through the mechanics of supply and demand,

as illustrated in the global silver trade between 1550 to 1800.