Re: Terry's Money is the root.

Thu, 27 Feb 1997 11:05:40 -0500
Salvatore Babones (

Let's be careful about assigning the credit/blame for the 16th century
transformations to the influx of silver. Two classes of people benefit
from an expansion of the money suppy: those whose money is being
expanded, and debtors. The direct results of the influx of silver were
that the Castillian crown could finance a bid for mastery in Europe and
that English privateers got rich quick.

The indirect effect was that debtors over the whole monetary area found
their fixed payments more bearable. In the case of landlords, this was a
mixed blessing: if they had rents fixed in monetary terms, these also
declined in value. Most landlords, though, received rents in kind.

My scanty knowledge of Iberia is that the sixteenth and seventeenth
centuries were the age of the landlord, not the age of the merchant. This
in spite of the fact that the expulsion of the Jews and Moors should have
opened up enormous opportunities for Christain Iberian merchants.

My better knowledge of Scotland is that by 1700 the great Scottish
landlords had lots of cash on hand and were looking for ways to invest it,
leading (among other things) to the foundation and healthy capitalization
of the British Linen Company, the Bank of Scotland, and the Royal Bank of
Scotland, with most of the investment coming from the landed classes.

Rising prices only help merchants who operate on long-term credit, and
merchants don't work on long-term credit.

As I read the history (and my knowledge of the history is weak enough that
I don't mind being corrected) the big winners in the sixteenth and early
seventeenth centuries were "landlords and landed countries." Spain,
Austria, and France rose to dominate Genoa, Venice, and Antwerp. The
Dutch did well - eventually - but they had to fight for their lives, and
were it not for the canals . . . . England did well, but later, mainly
after 1700.

All in all, I subscribe to the view that silver helped finance a European
expansion, not a European transformation. For the cause fo the industrial
transformation, see my upcoming dissertation, "Economic Development in the
Liberal State." :)



PS - Everyone go read the Winter 1997 issue of the Journal of
World-Systems Research, now available at:

Salvatore Babones
Doctoral Candidate
Sociology Department
Johns Hopkins University
Ph.D. expected May, 1998

> of the huge import of American silver, in effect an import of money,
> into the Euroasian economy in the 16th and 17th centuries. The
> discussion sometimes reads as if the European colonizers simply
> bought global dominance. Adding money to a market causes inflation,
> in this case, a massive inflation that lasts perhaps 150 years in W.
> Europe. The long term inflation tended to commodify relations in
> general and to favor merchants over producers, manufacturers over
> landlords, and commercial states over landed states in particular.
> The result was a fundamental transformation away from a slow changing
> landlord dominated economy with limited monetarization, and toward an
> ever expanding and increasingly commodified economy dominated by
> commercial interests (I will avoid the "c" word in the hopes that
> this time point does not get lost in a debate over semantics).
> As far as I can tell, no comparable inflation occurs in E. Asia,
> yielding a relative decline in the value of Asian goods, despite
> what some suggest may have been a greater apriori degree of market
> relations. One reason for this critical difference is that European
> corporate merchants (especially the Dutch East India Co.) held a near
> monopoly on the Euroasian trade. Moreover, they colonized the
> "spice islands," capturing the massive profits at both ends. Other
> explanations focus on Chinese state and class relations. Frank has
> suggested some possible demographic factors as well, and one could
> point to other reasons. Which combination of factors one highlights
> is less important than recognizing that the result is the rise of W.
> Europe.
> The second point, briefly, is that this fundamental transformation
> occurs in the "long 16th century," not the 19th century. I do not
> understand how Gunder and others can repeatedly and emphatically
> insist on the central importance of American silver in the rise
> of Euorpe, yet refuse to recognise the fundamental commercial
> transformation it wrought.
> TBos
> (long distance merchants were
> virtually guaranteed that
> inflated prices at the end of a long voyage would exceed costs at the
> beginning).
> Terry Boswell
> Department of Sociology
> Emory University
> Atlanta, GA 30322