Spanish American silver and the role of the new world in the premodern global economy 1500-1800

Abstract

Silver was a “public necessity” in Asia, and thus indispensable for the European commerce there. Whilst silver had no substitute in Asia, it was available in Spanish America to extraordinary scale. Historians have studied aspects of silver production and commerce, mostly at a regional or local level. Thus, mining is analized separately from trade, and trade as distinct from economic growth; moreover, silver considered as commodity is rarely differentiated from silver as money. For the international economy, the quantity of Spanish American silver was much less important that the quality of the coins; that gave them currency and made the Spanish American coin the preeminent means of payment and standard for an international payment system with which Europe balanced off her long-distance trade disequilibria.

The essay revisits the role of colonial Spanish America in the premodern international economy through the trade on silver coins and develops the implications for the economic expansion and market integration – a Smithian growth pattern- that it fostered. The analysis of monetary aspects of international trade, the article also discusses some classic issues of the traditional historiography and underlines some macroeconomic effects for the colonial economy which qualify recent interpretations arising from living standards comparisons and colonial legacies estimates. Ultimately it aspires to open new issues for research