31–40 of 159 posts
> The problem was that the conquest of the New World left Spain with a lot more money, but not that much more wealth, if you follow me. ELI5, please!
Marx wrote about commodity fetishism. Perhaps the ultimate version is a belief gold is innately valuable. It has valuable properties, but almost its sole function is to be rare and desirable. That we now use gold for electronics in some ways undermines its rei-ification as the personification of value. Spain fucked up. They mistook the gold for something more valuable than Labor. The Merino sheep of Spain were a bett…
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 Addthe telegraph on top of that and it's game over for any outdated empire.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.
Earlier quoted context omitted.
No it didn't. The gold didn't disappear. 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.
Exactly that, never to be seen again :)
If you melt down gold, how are you not staring at the same gold?
Moscow didn't steal anything either.
Sounds like America since the second half of the 20th century.
Marx wrote about commodity fetishism. Perhaps the ultimate version is a belief gold is innately valuable. It has valuable properties, but almost its sole function is to be rare and desirable. That we now use gold for electronics in some ways undermines its rei-ification as the personification of value. Spain fucked up. They mistook the gold for something more valuable than Labor. The Merino sheep of Spain were a bett…
Gold is used by industry at current prices due to its physical properties, so its current price and value are fairly close. 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.
Earlier quoted context omitted.
Exactly that, never to be seen again :)
Huh? If you melt down gold, how are you not staring at the same gold? Moscow didn't steal anything either.
Earlier quoted context omitted.
Huh? If you melt down gold, how are you not staring at the same gold? Moscow didn't steal anything either.
"The Spaniards will never see their gold again, just as they don't see their ears" this is supposedly what Stalin said according to Alexander Orlov. From the same link.
Earlier quoted context omitted.
"The Spaniards will never see their gold again, just as they don't see their ears" this is supposedly what Stalin said according to Alexander Orlov. From the same link.
> supposedly
> The problem was that the conquest of the New World left Spain with a lot more money, but not that much more wealth, if you follow me. 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.