For Teachers: Lessons

Rethinking the rise of the West: Global Commodities

Konstantin Georgidis, Canterbury School, Ft. Myers, Florida

CLASS ACTIVITIES: Comparing and Contrasing Points of View

B. Silver Connects the World: The Americas and the Manila Galleon

  1. Have students watch the second segment of the video "Early Global Commodities" on the web site. click here to view.

    VIDEO SEGMENT # 2: Silver Connects the World: The Americas

    "This segment explores the discovery of silver at Potosí, Peru, and the ways that silver made its way around the world by maritime trade. Unlike the Chinese — who felt little need for European trade items — Europeans in the sixteenth century desperately wanted to obtain Chinese silks, tea, and porcelain. With the discovery of the richest silver mine in history in Spanish-controlled Peru, Europeans discovered they finally had something the Chinese desperately needed.

    The site of the mine, Potosí, became the most populated city in the Americas (150,000 people) and required the forced labor of thousands of Indians to produce its precious metal. Profits were enormous. At first, the flow of Peruvian silver to the huge Asian market was slowed because it had to move east across the Atlantic. But in 1565 the Spanish discovered winds that allowed them to travel directly between East Asia and their territorial empire in Mexico. Then, with the founding of Manila in 1571 in the recently conquered Philippines, the Spanish established a Pacific trading base between China and Mexico.

    The voyages that began in the year 1571 — called the Manila Galleon — mark the beginning of the first truly global trade between the Americas, Europe, Asia, and Africa. By that time, Spanish America was the world's most important silver-producing region, and China by far its biggest consumer."

    Summary from Bridging World History web site Unit 15-- see web site.

  2. Have students read the following documents (secondary sources) expanding on the trade in silver across the Pacific:

    Secondary source #1: The Manila Galleon

    "Historians have been slow to realize the importance historically of the annual Manila Galleon, which connected American mines to Asian markets for European profits. Chinese demand for American silver was so great that in some years the amount shipped across the Pacific to Manila was greater than the amount sent back across the Atlantic to Spain itself. The Manila Galleon enabled Peru to hold off for some decades the depression weighing down 17th century Europe."

    Secondary Source #2: The Chinese Demand For Silver

    "Traditionally in the West, we've always told the story the other way around, in which the key to the story is that the Europeans find this supply of silver, and the Europeans are the ones who want spices, silk, porcelain, et cetera. They go out to China. They don't have very much to sell that the Chinese want. And so they sell silver. When you tell the story that way, then it always sounds as if it's European demand, European desire, European initiative that drives the whole story. And the Chinese are treated essentially as passive. They had goods the Europeans wanted, but the Europeans had no goods they wanted. Why would that be? Why would these people have no consumer desires? That's a little odd from a modern perspective. And so the story then always becomes that silver is money that is given to the Chinese to cover what we would today call a balance-of-payments deficit.

    Well, there are two big problems with that story. One is the one that I already mentioned, that the Chinese were sucking silver out of Japan, well before they started sucking it out of Latin America. But the second is that, interestingly enough, during the same period in which these huge amounts of silver are flowing into China, small but not trivial amounts gold are actually going in the other direction, out of China towards Europe, because the exchange rate between silver and gold is more favorable for gold in Europe, so the gold flows that way, the silver flows the other way.

    The reason why this really matters (is) because it makes us see that it's not "money" in the modern sense that the Chinese were demanding; it's a particular commodity—silver—that they want to use in certain ways, partly for money but also for candlesticks and hair pins and jewelry and all sorts of other things. And once you see it that way, once you see this not as a balance-of-payments deficit caused by a lack of Chinese demand for anything, but simply a commodity trade in which the Chinese have a very strong demand for this commodity that they can't produce, mainly silver, while the Europeans have a demand for certain commodities they can't produce at that point, such as silk and porcelain, and later, tea, then you see a world in which the Chinese are every bit as much active, desiring, consuming, and so on and so forth as the Europeans are.

    And previously, we had tended to have a story in which either we treated the Chinese as being somehow so virtuous that they had no consumer needs or no consumer desires, and so the Europeans had to give them this "money." And, in fact, there's one famous scholar who writes about how all the silver of Latin America was dug up from the ground in Latin America only to be shipped across the Pacific and eventually to be buried again in China. There's this sort of image of passivity, inertness ... the silver comes to China and "does nothing." Well, no, it doesn't "do nothing"; it fuels this enormous demand for a medium of exchange. It's tremendously important.

    So we either saw the Chinese as, sort of, so virtuous that they were above commerce, or so undesiring and uncurious and so forth, that they had no consumer demand. That also makes them sound peculiarly "unready" for modernity. But in fact, they're right in there. They're demanding a particular commodity for which they have a tremendously important use."

    Ken Pomeranz
    From the web module China and Europe 1500-1800 at Asia for Educators,