Social and Economic Effects of the Circulation of Silver

Social and economical effects of the circulation of silver

Between the years of 1500 to 1750 the increased flow of silver caused social and

economic effects throughout the world. The regions of the Americas, Europe, and Asia, which

were connected through the silver trade, were significantly affected as the Europeans entered the

global economy and the growing social distinctions within Ming China.

In China, the increased flow of silver bullion heavily affected China's economy when the

Ming Dynasty decreed that all taxes and trade fees be paid in silver. In the 1570's, the increasing

scarcity of silver coin endangered the Ming economy as people were unable to pay for their taxes.

This problem was presented by Wang Xijue to the Ming Emperor in 1593 in order to

demonstrate the need of silver coin in China. As a court official, Xijue most likely felt that the

declining economy may lead to public unrest and eventually to rebellions against the government,

and he hopes to circumvent this through his report to the emperor (document 3). Likewise, He

Qianyuan, another court official, denotes the declining economy of the Ming through a report to

the emperor on the possibility of repealing the ban on foreign trade. He Qianyuan mentions that

the price of silk in China is worth two to three times as much in the Philippines and that many

native products are highly desired by foreign merchants. Once again, Qianyuan wants to repeal

this ban on foreign trade in hopes of improving the Ming economy and for China to become

prosperous so that the common people will not rebel or become uneasy (document 7). Ye Chunji,

a county official of Ming China, creates an order to limit wedding expenses paid in silver. As a

result of the growing scarcity of silver in China, As a county official, Ye Chunji hopes that the

people of China will live frugally and not extravagantly in an effort to help the declining

economy by having people live frugally and to spend money on more necessary items than to

live extravagantly and waste money (document 1). Furthermore, the effects of silver taxes and

transactions is shown through Xu Dunqiu's essay in The Changing Times. In Xu Dunqiu's essay,

he shows the change over time from China's barter economy system to a more market economy.

Customers were required to pay trades and taxes through silver coins compared to earlier times

when customers were able to trade items for other items. Though Xu Dunqiu is relatively

unbiased as he is only stating facts about the Ming economy, this document can be used to

explain the decline of traditional Chinese society as well as the economy (document 5).

However, not only China was affected through the increased flow of the silver trade.

Spain, at first having benefited Spain early on, led to a decline in the economy of the Spanish