From the mid-sixteenth to the early eighteenth century, the global flow of silver largely reshaped the world’s economic system by raising international trade and inequality in America. While silver connected the world economy, it also increased coerced labor, which had a tremendous negative impact on Native American people. Before the silver trade, major civilizations operated largely independent economic systems. When China used paper currency during the Ming dynasty, Europeans found new trade routes after limited access to Asian countries due to land-based Muslim intermediaries. The discovery of silver in the Americas finally allowed Europe to obtain Asian luxury goods by exchanging silver.
European nations benefited economically from silver because it allowed them to purchase luxury goods from China. English scholars mention that Europe imports mainly luxury goods, while sending gold and silver to Asia, which never returns (Doc. 7). This basically means that there’s only on-way-trading happened during that time, while Europeans only import luxury goods and never export. At the same time, this is strong evidence that supports silver as a strong currency flowing around the world. Similarly, Ralph Fitch describes Portuguese merchants sailing from Macau to Japan to trade European luxury items for silver and then using that silver to make a profit in China (Doc. 2). These records represent the role of Europeans as intermediaries who use American silver to start getting involved in Asian-leaded luxury goods. At the same time, the author might want to attract more English merchants to attend these trading processes to increase the benefit by writing down this script. Also, Llamas carrying massive amounts of silver from Potosi show the volume of silver extracted was massive (Doc. 6). The global silver trade thus increased European participation in a previously limited Afro-Eurasian trading system. Overall, we can easily see that Europeans were starting to get involved in the previously closed Asian trading system and making a profit within this process.
Silver flowed mainly into China, where the Ming government required tax payments exclusively in silver. A Ming official reports that grain prices fell because farmers needed to obtain silver for taxes and reduced cultivation (Doc. 1). The Chinese demand for silver was largely increased due to the policy. So Europeans can only use silver to trade with the Chinese. This basically encouraged Europeans to get more silver from America. Since silver became the main currency in China through a political way and the statement that China was the economic center at that time, these things will literally promote the level of silver around the world. We can easily know that this text was written to the Emperor of China. He would like to suggest that the Emperor make some changes to the economic system in China. But from his point of view, the most important thing is that it represents that ordinary people in China are highly valued in silver. He Qiaoyuan also explains that Chinese merchants received silver in the Philippines because foreign traders eagerly purchased silk and porcelain (Doc. 5). Similarly, this also supports the trend that silver was becoming a main trading intermediate good. This evidence both suggests the increased level of silver in trading and interaction with China.