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World silver production during the 16th century was around 23 thousand tons[1]. Silver was closer in value to gold back then too, at around one tenth the value per weight. The economic impact of new world gold was a rounding error compared to the impact of silver.
If you have a mental image of Spanish conquistadors sparking global inflation purely by looting Inca gold, erase it. The real culprit was silver extracted from Potosi and a few other New world mines.
[1]https://digital.library.unt.edu/ark:/67531/metadc40312/m2/1/...
https://en.wikipedia.org/wiki/Global_silver_trade_from_the_1...
ELI5, please!
A ship for transatlantic shipping might have first cost 100,000 maravedí to build and equip before the treasure fleet expeditions, but afterwards with so much gold flowing into the economy and lots of competition for a limited ship building industry, the costs would inflate to 1 million maravedí (number roughly from memory). Same with the canons and shot, animals and sailor salaries, and so on.
Meanwhile, shipbuilders with all their newfound money are competing for blacksmiths, the outfitters are competing for livestock and horses, and so on. This puts lots of pressure on the rest of society which might need the iron for farming tools and the livestock to survive the winter, which they can no longer afford since the conquistadors and their merchants can pay a lot more in gold. In the end the maravedí accounts look bigger but represent the same amount of physical goods or labor.
Repeat this process across the whole economy and it throws everything into chaos. Some people here and there get rich, but economy wide it’s a total wash. Any wealth created for the state mostly just went into paying for wars because the inflation worked its way up through salaries.
- The COVID free-money needed to be less and to end sooner
- The COVID restrictions needed to be less and end sooner
The disease didn't go away, we just at one point decided we were done with restrictions even though conditions didn't change.
We needed restrictions ONLY during spikes and more consideration needed to be given to the long term economic effects of COVID policies.
An example graph, when restrictions should have been on or off left as an exercise to the reader
https://wgntv.com/wp-content/uploads/sites/5/2022/01/tuedeat...
The problem is it became a non-expert political issue where people who knew meme-facts based on their social bubble only really argued absolutist policies against stone wall opposition.
We needed people in a minmax mode arguing about specific levels of risk vs reward to set optimums, instead you had 0 risk folks screaming at 0 restriction folks screaming back with the middle entirely excluded. (We'll STILL get people on both sides responding here)
I won’t claim to know what the appropriate response level should have been back then. But it is very clear that the whole affair has hurt and damaged people and society irreparably. The only winners are the wealthy who scooped up assets at never-before seen interest rates.
> The COVID restrictions needed to be less and end sooner
What would we have been optimizing for here? GDP? Deaths? ICU Capacity? Lifestyle? Or would we weight them? If so would we take 2nd and 3rd order effects into consideration?
> An example graph, when restrictions should have been on or off left as an exercise to the reader
I lived in a country/state that did this during the pandemic. It wasn't a case of restrictions on, restrictions off. It was more a dialing back or ramping up of restrictions. If you look at other countries that did this you will still find the wave pattern. If I had to guess that is related to immunity after exposure. What would change however is the height of the peaks. With it's political/media landscape I don't know if the approach you suggest could have been applied effectively in the USA. Ultimately what drives cases/deaths is human behavior and the virus itself. Those who thought covid was an issue were taking precautions regardless of the restrictions.
> The disease didn't go away, we just at one point decided we were done with restrictions even though conditions didn't change.
This is a gross simplification of the whole pandemic. If I was to narrativize it I would say that over time as exposure to the virus increased it became less deadly so the vast majority of the people who were already prone to dying via covid had done so already.
> The problem is it became a non-expert political issue where people who knew meme-facts based on their social bubble only really argued absolutist policies against stone wall opposition.
This is more a comment on the political/media landscape than the response to covid itself. People have to operate within the system. If they present any sort of nuanced idea then they are persecuted by roughly 50% of the population whose narrative it infringes upon.
> We needed people in a minmax mode arguing about specific levels of risk vs reward to set optimums, instead you had 0 risk folks screaming at 0 restriction folks screaming back with the middle entirely excluded. (We'll STILL get people on both sides responding here)
The WHO was very clear at the beginning of the pandemic about the risks of the virus. For wealthy countries whose hospitals were "lean and mean" a high number of cases would cause immense pressure on these hospitals resulting in otherwise avoidable deaths not just from covid but from other things that would result from a limited ICU capacity. By this I mean life saving operations getting cancelled because there was no capacity in the ICU. It's also worth mentioning the restrictions pared with the financial aid allowed people to stay at home and not engage in any risk taking activities.
To summarize I think it's easy to arm chair quarterback the response to the pandemic. It's like most of politics. We sit here watching what is effectively a shadow puppet show but are left clueless to what is really going on because if we did know we can't be trusted with the secrets, or wouldn't be able to understand the data, or would object to a course of action as an emotional response, even if what is presented is truthful and the most optimal solution to a problem. The "masks are ineffective" narrative at the beginning of the pandemic was a classic example of this.
I just want to add that there is always a latent chaos / anarchy in people ready to jump at any oportunity to convince others to follow them. Doomsayers introducing themselves as messiahs. They are any combination of pseudoscience, religion and conspiracy. All this in addition of the normal political power struggles.
> Any wealth created for the state mostly just went into paying for wars because the inflation worked its way up through salaries.
Wealth created for the state just went into paying for wars because that what mattered to the early modern aristocracy and that's what they wanted to pay with their additional money. From the point of view of the Spanish elite of the time, their “wealth” increased dramatically during that period, it's just that this don't fit your or my criteria for wealth.
If you don't have a mechanism for productivity increase matching your inflation it's just making whoever is creating the new money temporarily proportionally wealthier until the money spreads everywhere.
https://en.wikipedia.org/wiki/Cross_of_Gold_speech
You can imagine every year the price per bushel of the wheat you grow drops and your mortgage stays the same. When your whole economy is like that no one wants to borrow or lend money and investment slows.
It would be interesting to learn about the technological developments Spain failed to make compared to some of their European neighbours. Merchant banking is one of them.
Or maybe currently RAM. You found pile of money somewhere. You buy big amount of RAM. RAM prices go up, you do not care you have money. In a few years DDR6 comes out. The RAM you bought is not that expensive anymore. You do not really have either money or something currently expensive.
Wealth is owning the land, the machines, the buildings, the knowledge(more so now). Being rich is owning lot of what can buy those things. But if you keep spending liquid wealth, eventually it is gone and you are not wealthy anymore.
Also, to quote Jastram [0], "In spite of the romanticism of the Spanish Main and treasure ships, the supply of gold from the New World was just a trickle by later standards. Less than 1% of what was to be 1930 world production was produced in each of the years from 1500 to 1520." Over the next 80 years, it never got much above 1.3%.
[0] Roy W. Jastram, The Golden Constant (1977), pg. 41.
There’s a lot more to “wealth” than just having a bunch of stuff. Especially in the long term, since most “stuff” will wear out or otherwise decay over time.
It's close to ideal for a loaf of bread, or a bag of nails. I can hop on my bike and turn my money into either of those things in a few minutes. Turning money into a house is further from that ideal of course.
Consider what that means for sustainability and the future.
That is what is being discussed.
Sounds like America since the second half of the 20th century.
But backwards people like Ferdinand the 7th cut down the modernisation of Spain which could boost us up to the level of France if not more. I'm no kidding. Just look at the Cádiz constitution from 1812.
https://en.wikipedia.org/wiki/Ferdinand_VII
https://en.wikipedia.org/wiki/Spanish_Constitution_of_1812
Not bad for its time at all.
Spain fucked up. They mistook the gold for something more valuable than Labor. The Merino sheep of Spain were a better bet, in the long term.
The Spanish gold disappeared into economies with a better sense of what value is.
Arab states could get into the same trap
https://www.history.com/articles/slavery-profitable-southern...
TIL.
Does anyone have any good recommendations for a (relatively) good social/economic history of the Southern US states? (because I guess that that type of history book would cover this type of information).
kind of funny to think they still have trouble to actually extract that gas due to activism around earthquakes and ppl not eager to move away from these places. also now the climate push.
it kinda looks (from an uneducated perspective) they suffered this disease for nothing.
Transcontinental fleet of ships regularly circumventing the globe and transporting cargo requires lots of technology. Why marine industry didn't stimulate manufacturing and industrialization?
But our damn national motto on R&D was "Que inventen otros" (Let the -foreign- ones invent).
EDIT: It actually was "Que inventen -sth- ellos" (let the others invent -it-).
Something like let's just slack down/keep living under a traditionalistic, rural, Romantic life at the 19th century, let the rest do the modern inventions. OFC as I said Torres Quevedo was the exception, but overall I find our right wing politicians still have that Empire bound mindset. Even the progressive left are almost ranting luddites, they look the Science down from their Liberal Arts thrones.
In the end it's some kind of outdated rural-Romantic idiots fighting another share of left sided outdated jerks with, paradoxically, a similar love to the Rural Spain, with the pure, hard working, 'ecological' peasant against the polluting urbanite.
And sometimes I wish these Boomer (literal boomers in both sides) influenced journalists get to the times for once and all. Use science to fight the climate change. Use libre software to expand education and knowledge like anywere else in History. Act smart and not with the guts.
But that's Science Fiction here.
Value is ultimately always in the eye of the beholder.
But the value of the watch is not reducible to its value as a timekeeping device. (Even here, you could argue that the mechanical watch has more instrumental value as a timekeeping device where batteries are unavailable.)
A mechanical watch has greater value as a mechanical watch; it is mechanically more sophisticated, even if not electronically. It can have greater value as a product of superb craftsmanship or as an object of art. (And here, while tastes vary, I would reject the reduction of beauty to taste.)
On any objective measurement axis a $15 Casio is more sophisticated than a $10_000 Rolex. I think what we value is the human scale of the Rolex, it operates and is manufactured at a scale we intuitively understand as humans, and we(or at least some people) value the sacrifices and effort needed to run at that scale.
Consider this, on your cheap Casio, the manufacturing tolerances are so tight and the parts are so complex and fine the only way to manufacture them are fully automated lines requiring a staggering capital investment of many millions, however because these lines have to be fully automated the economy of scale applies hard and the final product is very inexpensive.
All it takes to make a fine mechanical watch is a good watchmaker and several hundred thousand dollars of tooling.
One of my favorite watch repair videos is of a guy who rescues a smashed Casio, It has this fun combination of. it's a Casio, not worth even looking at. It is not designed to be serviced. Everything in it is super tiny, I mean watchmaking is already an exercise in frustration with how small everything is, which is why I enjoy watching them work but I have no real desire to do it myself, however in this Casio they were absurdly small. But this madlad did it. What a heroic fix.
Note that this cannot work as a theory of value; everything has infinite value if you define value as "the ability of a thing to be itself".
You’re forgetting lead, but the point is all the same.
If you mean value per se, not at all. There are difference kinds of value (intrinsic, instrumental).
A piece of bread has objective nutritional value, for example. It doesn’t matter whether you personally dislike bread.
As a trivial example, someone with celiac’s disease is not going to value your gluten ridden bread very high.
It's extremely convenient to have coal, iron, and waterways in the region where you wish to achieve that early industrialization.
There's a map somewhere showing where those happened - England, France/Germany, eastern/great lakes US.
This still allows for significant price swings because there vast quantities of gold sitting around in vaults, but unlike say bitcoin it does have high intrinsic value. IE: If gold sustained a 90% drop in price across decades at lot more would be used by industry creating a price floor.
I agree that industry use creates a price floor, but that might be much lower than what the price is today. I.e if suddenly everyone lost faith in gold as a carrier of value, so everyone who keeps gold just as a passive keeper of value started selling it off, then we would get a new market clearing price which represents golds 'real value'. I have no clue what this would be, but it is certainly not obvious to me that it's close to today's price.
I’m talking orders of magnitude here. Supply and demand curves generally have a slope. As in the demand for goods by industry increases as the price decreases. A significantly larger portion of minded gold is used for jewelry than industry or investment, but a price drop would also reduce the amount mined.
Combine those and yes gold could get significantly cheaper especially with the vast quantities on hand, but it would still be a very expensive metal vs steel, aluminum, etc.
And if they could get gold at a fraction of the cost of other countries and exchange it for useful goods, isn’t that more rational than building the goods yourself?
The Spanish were not stupid and were not acting irrationally — except perhaps thinking on too short of a time frame. The gold trade was a total moral abomination, but it was a good trade economically for hundreds of years.
The main problem was that it was basically an arbitrage play and once the margin got erased from inflation, they had let the rest of their economy atrophy.
This is one of the reasons the Saudis invest so much money in tech companies and other industries.
The Spanish Empire was, more than anything else, a product of the reconquista. The major institutions of Spain were all directed towards the taking and holding of new lands. When granada finally surrendered in 1492, the monarchy turned towards conquering the canaries and then the new world to avoid the large scale structural changes needed to go from a militaristic, medieval nation to a peacetime state in the early modern. The systems of repartimiento and encomienda were more or less borrowed wholesale from the reconquista. The conquistadors and chroniclers all saw the Americas through the lens of the chivalric literature they loved. The name "California" was borrowed from one of those books, about a fictional island of Amazons who aided the moors.
Precious metals were a solution to the problems Spanish monarchs had in organizing Spanish society. It paid for soldiers in the monarchy's constant wars. It paid off loans to italian and dutch financiers, and it was something that could much more easily be controlled by a distant monarch than import duties or taxation (which nobility were largely exempt from). It also gave them some limited control over their inflation issues by devaluing and revaluing the coinage as financial pressures required. This eventually caused other problems, but the point is that Spain was never really an arbitrage play. They didn't have to be, since they controlled some 30% of the world's gold supply and >90% of its silver at points.
More like the opposite. The Golden Age of Spain was all about making fun on the knight from the "New Man" making wealth from the Americas.
Heck, it's the main theme from Don Quixote. The old, idealistic, outdated, Medieval wannabe-knight (hidalgo meant hijo-de-algo, son of something, hereditary titles) vs the simpleton but grounded peasant from the New World era. Also tons of peasants tried to travel overseas to make good money, and maybe scaled up their status to the ones from a merchant.
As Cervantes itself was a limp from a war which was something reminiscing old romantic but bullshit times, with Don Quixote you have the clear message that the warrior/knights were looked down against the traveler making wealth from overseas.
Kinda like a far west outdated "Justiciero" in the US from an aristocratic background compared to some middle-level educated hick but with a prosperous job in the 50's thanks to making good money from trade in a fish port.
It's like finding New York policemen devouring dime novels around the Far West and believing themselves as lonely, macho gunslingers...
In the end the 70's cop movies aren't that different to a Western movie, but they still look a bit rusty compared to a Charles Bronson movie with slight detective skills where a bit of slow pace and thinkering it's needed and most of the old rural tropes wouldn't apply to a big city.
A similar thing would be comparing the Medieval Spain tactics against the post-Spain birth ones where guns were becoming to be the norm, such as the Arcabuz.
The old men in knight novels fought for their own good cause, but the New World men where just about the profit and trade. Coming back to Spain with goods was far more 'secure' than getting your life threatened by Mesoamerican tribes everyday. I mean, if you got the goods and avoided any fight, the better. It would be the most rational thing to do for the times. Specially without advanced medicine.
Meanwhile, it's obvious that the old Quixotic man wasn't afraid of death, but the new pragmatic Spaniard would have for sure a different mindset. Still a Catholic, but he would value far more its life once he was aware that some of his neighbours could improve their life in a trip and actually have some terrenal, tangible, REAL goods to enjoy instead of being tied to a farm or the fields and maybe just religion and the paradise as a relief.
Your values could quickly shift once you turned back to Spain loaded as hell with spices -very valuable for the time-, salt, exotic fruits, gold and who knows what. That and the incipient technology. Windmills? Guns? Far better ships? To hell with the hoe.
being on this forum for a decade I see people consistently get caught up in the latter, at the expense of noticing the opportunities the same people are here for
selling people a better understanding of why they find things valuable, is worth a lot!
It just happened that the British industrial revolution steamrolled everyone. You can't compete aganst the steam engine and the railway making communications and sharing of goods and raw materials something ridiculously cheap compared to the previous times, even by boat in both UK and Spain where the big rivers like Douro and Tagus could sustain a lot of transport. But, still, the train allowed to reach anyone in the country.
Which cheap transportation you can connect industrial powerhouses (and competent engineers and scientists) and the rest it's history. Addthe telegraph on top of that and it's game over for any outdated empire. When knowledge sharing can be reduced hours and maybe a day or two instead of weeks or months, it's like upgrading from having a 486 based computer with DOS to a Ryzen one with multiparallel processing. Literally.
The massive Spanish purchases of weapons and other manufactured goods from other countries in the 16th and 17th centuries played a large role in jump-starting the capitalist economic revolution in Europe.
Did you actually read the wiki you linked?
Spain transferred the gold to Moscow who liquidated it on Spain's behalf to buy guns, fund the civil war, and deposit in banks.
There's mixed views whether Moscow took too much of a margin, but they melted down gold after selling it and the gold is still in circulation.
If you melt down gold, how are you not staring at the same gold?
Moscow didn't steal anything either.
I guess Russia has always been a shitty country.
1. National treasures (ex gold) were returned in '35 and '56.
2. Romania intervened against the Bolsheviks in Bessarabia.
#2 seems like FAFO to me. And I'm sure some Romanians got kickbacks from the "transfers." Nobody forced Romania to transfer their assets.
1. They never returned 92tons of gold. The vast majority of the national treasure is still in Moscow. I hope the EU ties this to the current Russian assets frozen in the EU.
2. Bolsheviks ? Russia collapsed in 1917 and Bassarabia voted to join Romania. There was no Russian control in Bassarabia, no war, no fight.
Nobody forced them, true, they were in dire circumstances, but it proves even more how much Russians can be trusted. 0. Shitty country since forever.
I expressly said "ex gold."
>Bolsheviks ?
Lmao. Where are you getting these falses premises?
1. Who rose to power after Russia collapsed in 2017?
2. There was no Bolshevik fighting or presence in Bessarabia?
3. Romania didn't intervene to fight Bolsheviks in Bessarabia?
You must be hallucinating to think otherwise.[0]
[0]https://en.wikipedia.org/wiki/Romanian_military_intervention...
Cherrypicking a quote from Stalin who was using sarcastic humor at a banquet when the gold arrived also doesn't refute my point or answer my question.
