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What happened to all the gold Spain got from the New World? (1985)

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Re: What happened to all the gold Spain got from the New World? (1985)

#71

Post by thaumasiotes »

lo_zamoyski wrote: post #53
the__alchemist wrote: post #11

Earlier quoted context omitted.

Indeed. I believe the parent commenter should pause and assess why people buy things, and what makes something desirable or a luxury good. We can start with mechanical watches: They are of poorer quality by every utilitarian measure than a crystal-oscillator driven one, but command much higher prices and status.

> They are of poorer quality by every utilitarian measure than a crystal-oscillator driven one, but command much higher prices and status. 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…

> A mechanical watch has greater value as a mechanical watch

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".

Re: What happened to all the gold Spain got from the New World? (1985)

#72

Post by B1FF_PSUVM »

trgn wrote: post #8
ggm wrote: post #2

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…

spain was no longer a major player in world politics by 1800s, but they had a good 2-3 century run. not sure if the monetary crisis was really did them in, or more just it being the ebb and flow of history. britain's world dominance is long over too. if they did "fuck up", it was because charles v was the first global hegemon, nobody know how to do that, he was in uncharted territory. and obviously no, the merino she…

> then of course, industrialize early.

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.

Re: What happened to all the gold Spain got from the New World? (1985)

#73

Post by paganel »

Herring wrote: post #14
aarroyoc wrote: post #4

Earlier quoted context omitted.

Yes, I often say that the gold from America was a poisonous gift. It made the country so rich that they stopped caring about other stuff, they could just buy them from elsewhere. So there was little incentive to manufacture first, and industrialize later. Which is ironic because some of first steam engines you can find in Europe were invented in Spain ( https://en.wikipedia.org/wiki/Jer%C3%B3nimo_de_Ayanz_y_Beaum...…

It's a recurring theme. At the time of the Civil War, the Mississippi River Valley had more millionaires per capita than anywhere else in the US. https://www.history.com/articles/slavery-profitable-southern...

> the Mississippi River Valley had more millionaires per capita

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).

Re: What happened to all the gold Spain got from the New World? (1985)

#74

Post by rr808 »

mcc1ane wrote: post #16

> 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!

Today - if you give everyone $10 million dollars there isn't enough production for everyone to buy what they want - you just get inflation. Its probably worse for the economy as people stop working.

Re: What happened to all the gold Spain got from the New World? (1985)

#75

Post by nradov »

ijk wrote: post #70
goodcanadian wrote: post #31

Earlier quoted context omitted.

As a sibling comment said, gold was effectively money. Having more money, without having more products to buy, effectively triggered massive inflation. Prices went up, but the actual supply of goods and services didn't change much. The Spanish economy suffered massive inflation, as did Europe in general to a lessor extent.

It's interesting that mining gold and silver is similar to printing more money; we usually think of inflation as represented by debasing coinage but there's been a few circumstances where flooding the local economy with precious metals is the same effect.

We sometimes see similar localized effects when wealthy foreign governments and NGOs go into poor countries to "help" with foreign aid and investment. When done correctly this can boost the local economy in a sustainable way, kind of priming the pump. But often it just dumps a lot of cash in, causing price inflation as the supply of goods and services fails to keep pace with the supply of money.

Re: What happened to all the gold Spain got from the New World? (1985)

#77

Post by somat »

lo_zamoyski wrote: post #53
the__alchemist wrote: post #11

Earlier quoted context omitted.

Indeed. I believe the parent commenter should pause and assess why people buy things, and what makes something desirable or a luxury good. We can start with mechanical watches: They are of poorer quality by every utilitarian measure than a crystal-oscillator driven one, but command much higher prices and status.

> They are of poorer quality by every utilitarian measure than a crystal-oscillator driven one, but command much higher prices and status. 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.

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.

https://www.youtube.com/watch?v=0IhPFutz1XI

Re: What happened to all the gold Spain got from the New World? (1985)

#78

Post by greenie_beans »

paganel wrote: post #73
Herring wrote: post #14

Earlier quoted context omitted.

It's a recurring theme. At the time of the Civil War, the Mississippi River Valley had more millionaires per capita than anywhere else in the US. https://www.history.com/articles/slavery-profitable-southern...

> the Mississippi River Valley had more millionaires per capita 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).

from the antebellum era? try anything by eric foner, but a good place to start is forever free: the story of emancipation and reconstruction. it's accessible history that includes a bit of background about the political economy leading up to the civil war. any of his books about reconstruction might be interesting but not exactly what you're looking for. "black reconstruction in america" by dubois is a keystone text that has a bit about the southern economic history. and maybe "old south, new south" by gavin wright for post reconstruction economic history

Re: What happened to all the gold Spain got from the New World? (1985)

#79

Post by kristianp »

esafak wrote: post #28
mcc1ane wrote: post #16

> 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!

Bullion imports caused inflation; the money supply increased without corresponding increases in the production of goods and services. https://en.wikipedia.org/wiki/Price_revolution

What an interesting topic. One of the further reading links is to a paper that claims the inflation started earlier in the 1500s, due in part to the rise of German silver mining: https://web.archive.org/web/20110706211346/http://repec.econ...

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.

Re: What happened to all the gold Spain got from the New World? (1985)

#80

Post by Gibbon1 »

ijk wrote: post #70
goodcanadian wrote: post #31

Earlier quoted context omitted.

As a sibling comment said, gold was effectively money. Having more money, without having more products to buy, effectively triggered massive inflation. Prices went up, but the actual supply of goods and services didn't change much. The Spanish economy suffered massive inflation, as did Europe in general to a lessor extent.

It's interesting that mining gold and silver is similar to printing more money; we usually think of inflation as represented by debasing coinage but there's been a few circumstances where flooding the local economy with precious metals is the same effect.

In the latter 1800 there wasn't enough gold to accommodate the vast increases in industrial production. Which was deflationary.

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.

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