ABSTRACT
Silver played a central role in the emergence of trade at the global level.2 Beginning in the sixteenth century, hundreds of tons of silver were extracted each year from mines in Japan, Mexico, and Peru. The bulk of this silver ultimately found its way to China. Silver gravitated ineluctably to the world’s largest economy because the price of silver was higher in China than elsewhere in the world. Why was China’s silver price dramatically higher than in any other place in the world? Because Ming monetary and fiscal systems had been converting to a silver standard in the aftermath of the collapse of China’s paper-money regime in the fifteenth century. China’s advanced economy, comprising a quarter of the world’s population, converted to a silver foundation over an extended time period; as a result, demandside forces raised the price of silver within China to double its value in the rest of the world. Tens of thousands of tons of silver eventually gravitated from the world’s major silver mines in Spanish America and Japan to China-via Nagasaki, Taiwan, India, Indochina, the Atlantic, Cape Horn, Acapulco-Manila and the Pacific, the Mediterranean, the Red Sea, the Baltic, Russia, the Ottoman Empire, the Silk Road, and other routes-because private and public entrepreneurs throughout the world profited by participating in the shipment of silver to its most lucrative end-market.
