Global Economic Effects of No Inca Silver

[John Fredrick Parker]

Macroeconomically, Germany is still fucked [by 1618]. The country faces [1] inflation that undercuts its traditional mining industry, [2] population pressures on scarce land, [3] the forcible reintroduction of serfdom in the east and [4] war in the west. [5] It is cut off from most major new trade routes and [6] has no chance of developing a banking centre on par with Genoa, Amsterdam, London or Paris for want of a unitary currency and geographic reach.

Just curious, what would be the latest PoD then for the German economy of the HRE to avoid being macroeconomicly fucked? I'm unfamiliar with [3], and it seems like [5] and [6] can't be helped without holding the rest of Europe back (which I don't want). However [1] seems easy enough to avoid, and would likely have the effect of helping [4]; hence why I'm posting here.

 

[carlton_bach]

Just curious, what would be the latest PoD then for the German economy of the HRE to avoid being macroeconomicly fucked? I'm unfamiliar with [3], and it seems like [5] and [6] can't be helped without holding the rest of Europe back (which I don't want). However [1] seems easy enough to avoid, and would likely have the effect of helping [4]; hence why I'm posting here.

Very little, I fear. We are talking about a premodern society caught up by Malthusian pressures, there is not a lot that can be done about the fundamental problem. Germany's economy (to the extent that such a thing existed - most economic activity was regional, not national, and a city like Hamburg depended more on Britain and Sweden than it was affected by events in Westfalia or Bavaria) depended heavily on mining, and with more labour chasing fewer goods and the new world's silver and gold coming in, consumer price inflation was inevitable. There were no mechanisms to address this. Pauperisation resulted, and there's no way not to have that happening. The reintroduction of serfdom was a direct result of that situation - nobles using state power to cement their control over increasingly valuable food production and cutting their peasantry off from monetised markets. It also happened in other parts of Eastern Europe.

If there was no new world silver flow, the situation would be different, and potentially better for Germany. THe influx meant that the powers who controlled the silver dominated the China and India trade, and that meant control over European trade networks. They could set the terms on which others worked for them. If the trading nations had to find goods in demand in China instead, Germany with its strong protoindustrial manufacturing tradition might have profited more. It would also have avoided the long wars the Habsburgs with their deep pockets fought against territorial princes. I don't believe in an amicable implementation of Sigismund's Reformatio Imperii any more than I do in unicorns, but stranger things have happened in history. At any rate, this might have resulted in an earlier assertion of princely sovereignty OR a clear agreement on imperial power. We could avoid the Thirty Years' War and produce significant players on the regional stage a century earlier (Saxony and Bavaria especially). That could lead to greater political stability.

Or not. Germany is still caught between France and Habsburg, and it still has a population growth outstripping its natuiral resources and no safety valve. Something has to give.

 

[John Fredrick Parker]

Germany's economy... depended heavily on mining, and with more labour chasing fewer goods and the new world's silver and gold coming in, consumer price inflation was inevitable. There were no mechanisms to address this. Pauperisation resulted, and there's no way not to have that happening. The reintroduction of serfdom was a direct result of that situation - nobles using state power to cement their control over increasingly valuable food production and cutting their peasantry off from monetised markets...

If there was no new world silver flow, the situation would be different, and potentially better for Germany. The influx meant that the powers who controlled the silver dominated the China and India trade, and that meant control over European trade networks. They could set the terms on which others worked for them. If the trading nations had to find goods in demand in China instead, Germany with its strong protoindustrial manufacturing tradition might have profited more.

Just to clarify -- if the reintroduction of serfdom was a response to the pauperization and decline of proto-industry (and thus the rise of agriculture in terms of relative profitability), which in turn was the result of the economic ripples we're talking about, that means our PoD means no (or significantly less) serfdom in the HRE and a Eastern Europe, right?

 

[pompejus]

That means, for example, the Dutch Revolt in 1567 still happens as OTL, and may still go as it did up to the Sack of Antwerp in 1576 (which came about due to Phillip having trouble paying the troops). OTL, AIUI, the return of Potosi Silver loads meant that the Spanish were able to start reasserting their power in the Netherlands, eventually taking control of the Flemish south, while the rebels held the north, from which they proclaimed the UPN. What happens if, going into 1577 and 78, Spain is still broke, even more so than before? Well, I expect the Spanish Netherlands aren't divided; either they stay under the Spanish Crown, having asserted their rights, or they leave the Spanish Crown in union (forming a republic, or finding another monarch, what have you).

I Spain that is broke for a longer time than OTL would give the Dutch a better position during the revolt. It will probably mean a larger independent Netherlands at the end. If it happens early enough a larger portion of the Southern Netherlands could remain protestant. This alone would mean a major changefor the Netherlands after the war. I don't think the Dutch would be able to reconquer all of the SOuthern Netherlands. The Walloon areas remained loyal to Spain after all and for the large part remained catholic. In the end I think the Dutch border would be to the South, but not all of it would be Dutch. I could see it become French though. A smaller Spanish Netherlands would be an easier target for France.

With a large part of Flanders and Brabant being Dutch and protestant, you gain a very different Netherlands. If Antwerp can be kept or recaptured quickly, Amsterdam would not become the major city it was IOTL. With Brabantand Flanders part of the Netherlands Holland would not have the dominant position it had OTL. I could even see more and different stadholders than OTL, so no domination of the house of Nassau. I could see the Netherlands turning into some kind of monarchy instead of a republic. Maybe it could even become part of England, with the Nonsuch treaty (unlikely though, but possible).

 

[Ameck16]

Another thing to take into account is how Spanish silver caused high inflation in the Islamic world, especially the Ottomans which saw large black market smuggling rings pop up around the empire, which lead to corruption in the Ottoman bureaucracy thus leading to the economic stagnation and then decline pf the empire.

 

[John Fredrick Parker]

You know, I'm starting to wonder if Potosi produced any actual winners, or if literally everyone affected (Spain, China, Europe, the Ottomans, everyone) was worse off for the influx of silver.

 

[Intransigent Southerner]

Some misinformation here...

Will China change her tax policy again when Japan can no longer support the silver demanded by the state?

Oh, don't worry, because Japan will. Per Von Glahn's magisterial work on the late imperial Chinese economy - Fountain of Fortune: Money and Monetary Policy in China, 1000-1700 (p. 232) Japan supplied 75% of China's foreign silver in the 17th century. Since the Yungui mines were incapable of even meeting the silver demands of impoverished Yungui, it's safe to say that Japan alone was responsible for selling China more than 2/3 of its silver supplies. This is despite the restrictive policies of the Tokugawa shogunate on Chinese trade. Even in the early 18th century only Guangdong and Fujian were truly dependent on American silver and it was not until later in the 18th century that China was truly dependent on non-East Asian silver. Even without Potosi, mei wenti until the mid-1600s or so, even if we're factoring in the increased foreign interest in Japan.

do the Ming decide to try to transition back to paper money?

Everyone was terrified of paper money because of its history of hyperinflation under the Yuan, and Japan has enough silver to last the entirety of the Ming, so no. Also, the Ming realized early on with a failed experiment (the Da Ming tongbao paper money) that paper money would need to be backed up by precious metal anyways to actually be effective.

I think the interest of outside powers in Japan's silver would likely increase.

Agreed.

Spanish silver caused rampant inflation in the Chinese monetary system

There is general consensus that silver, both Japanese and American, greatly aided the Ming/Qing commercial revolution by lubricating the economy with more money. You're correct that inflation was rampant in the last years of the Ming, but the net effect of silver was positive and allowed the 18th century to become the most affluent in all of China's history prior to the late 1900s. Note that China was suffering from a major deflation problem prior to the influx of silver.

just as the Chinese were implementing economic reforms to deal with the inflation

There is no sufficient evidence that silver imports declined greatly under the late Ming. If/when Manila reduced its silver supplies, the Chinese just went to Nagasaki instead. As mentioned, Japan provided most of China's silver. See "Silver and the Fall of the Ming: A Reassessment" by Brian Moloughney and Xia Weizhong, who conclude that "the collapse of the Ming in 1644 was due more to factionalism and nepotistic squabbling [...] than to the vicissitudes of international movements of bullion." Kenneth Swope, a leading military historian of the Ming, agrees (*The Military Collapse of China's Ming Dynasty*, Ch. 8).

Jiangnan's flooding issues

What floods, specifically, are you talking about? And how can you prove that the influx of silver, which was welcomed by Jiangnan's burgeoning economy especially, was responsible for these floods?

a reform to simplify the collection of taxes by accepting only silver in payment rather than the multiple metals or in-kind tribute which had been taken before

You appear to be describing the Single Whip Reform, which commuted the taxes in kind and labor to silver. That was systematized in the 1570s, more than two generations before the Ming collapse, and was fully established by the 1630s when the rebellions broke out. It is very wrong to claim, as you did, that they were passed "just as the Chinese were implementing economic reforms to deal with the inflation."

IIRC there was also an anti-corruption campaign of some effectiveness, a land survey to attempt to bring the great houses into line and force them to pay more in taxes, and a cut-back of the bureaucracy to reduce the civil payroll and save money for useful things.

I think you're describing reform movements like the Donglin Party and the Restoration Society, who generally wanted to rationalize the inherently inefficient Ming state (the first emperor made the government drastically more ineffective and made it extremely difficult for his descendants to change it back). They all failed not because of silver or the lack thereof, but because late Ming emperors were all terrible rulers who were not up to the job.

You know, I'm starting to wonder if Potosi produced any actual winners, or if literally everyone affected (Spain, China, Europe, the Ottomans, everyone) was worse off for the influx of silver.

It greatly aided the commercialization of China and Southeast Asia, and many world historians consider it an important factor in Europe's economic rise. You need to look at the broader effects on society, not the short-term geopolitical effects.

 

[Emperor RyRy]

That would overall not be as much silver as was extracted OTL, at least immediately.

That's an incredible understatement. They will not be enslaving the indigenous populations to mine for inhumane amounts of time.

Did you know that, in an effort to not have their children be forced to mine, Andean mothers would purposefully maim their children, by cutting off a hand or something like that?

 

[John Fredrick Parker]

Looking over this, it seems there's one thing everyone agrees on -- with far less American silver, Ming China will be more reliant on the metal of Japan, which in turn will influence the interest outside powers have in the islands. What's intereting here is that, around the time these economic and geopolitical ripples start to hit them, Japan will be in the height of their wars for unification, the latter Sengoku-Jidai.

Does this mean we're also looking at an alternate unification and subsequent Shogunate? Maybe @BBadolato could weigh in.

 

[BBadolato]

Looking over this, it seems there's one thing everyone agrees on -- with far less American silver, Ming China will be more reliant on the metal of Japan, which in turn will influence the interest outside powers have in the islands. What's intereting here is that, around the time these economic and geopolitical ripples start to hit them, Japan will be in the height of their wars for unification, the latter Sengoku-Jidai.

Does this mean we're also looking at an alternate unification and subsequent Shogunate? Maybe @BBadolato could weigh in.

Okay pitch me a date when butterflies happen.

 

[John Fredrick Parker]

Okay pitch me a date when butterflies happen.

The 1550's would be the very earliest, since that's when Potosi started producing and Portuguese presence in Japan started getting underway. That said, I think it more likely to start making a noticeable difference later. But that said, it wouldn't be any later than the 1570's, by which time Spanish Ming trade was in full swing (Phillipines being settled,* etc).

So I leave it to you to find the best PoD, minding the relevant change is that China and her European trading "partners" have slightly more interest in Japanese silver, specifically Iwami Ginzan. My guess, this means more weapons are being imported in that part of Japan (near present day Oda and Nagasaki).

*That's another thing -- a more cash strapped Phillip II might not try to create as much of a presence in the Phillipines and Indian Ocean, leaving the Portuguese with more of a monopoly.

 

[BBadolato]

The 1550's would be the very earliest, since that's when Potosi started producing and Portuguese presence in Japan started getting underway. That said, I think it more likely to start making a noticeable difference later. But that said, it wouldn't be any later than the 1570's, by which time Spanish Ming trade was in full swing (Phillipines being settled,* etc).

So I leave it to you to find the best PoD, minding the relevant change is that China and her European trading "partners" have slightly more interest in Japanese silver, specifically Iwami Ginzan. My guess, this means more weapons are being imported in that part of Japan (near present day Oda and Nagasaki).

*That's another thing -- a more cash strapped Phillip II might not try to create as much of a presence in the Phillipines and Indian Ocean, leaving the Portuguese with more of a monopoly.

Okay, I'm shooting from the hip here, so whoever is reading for the love don't take what I'm saying as gospel. If we are starting at 1550, then well like what I would say with any alternate Shogunate in the Sengoku Jidai it's not at all a period set in stone. You have to make some legwork in getting the period to move, which is difficult given the sheer number of divisions and in some cases slow rises of some clans. For an example the Oda's rise was almost something we could call ASB as it was just a small clan, but just when they seemed likely to unite the land, Nobunaga was assassinated along with his eldest son and his retainers and allies started to pick sides between his sons.

1550 you have the Ouchi as a power in Western Honshu, if you can maybe have Ouchi Yoshitaka have a change of heart and consider military matters to be important, Sue Takafusa doesn't start a rebellion, that sees the Ouchi eventually weakened replace by the Mori by 1556, this also means that Christian missions and traders can be kept in Yamaguchi. If the Ouchi go back to war with the Amago and win that would net them the silver mines of Izumo, and

Central Honshu nothing much changes again at least on it's on. the Imagawa are still a power if they manage to avoid that ambush and seize Owari. If Yoshimoto marches on to Kyoto the Miyoshi are not divided by the schemes of Matsunaga Hisahide are still a strong power. As another knock on effect you could see the Saito stay as a power and possibly check the Imagawa considering Mino was mountainous compared to the provinces of the Imagawa lands of Suruga,Totomi, and Mikawa maybe Saito Yoshitatsu stays on good terms with his father, you could get creative and maybe butterfly his leprosy, if only because it never mentions when he got it.

The usual suspects of the Takeda,Uesugi, and Hojo clans are going to be the same regional powers as in OTL, if the Imagawa are defeated or weakened Shigen and the Takeda could turn on Yoshimoto, and make a play for Kyoto itself.Although you could just the Ashikaga undergo a slow but steady revival in their power as well, largely because the Ashikaga were plagued by bad luck as well as structural weakness. Sorry if this a lot to take in, but I can't give any easy anwsers on what will happen as a certainty.

 

[John Fredrick Parker]

1550 you have the Ouchi as a power in Western Honshu, if you can maybe have Ouchi Yoshitaka have a change of heart and consider military matters to be important, Sue Takafusa doesn't start a rebellion, that sees the Ouchi eventually weakened replace by the Mori by 1556, this also means that Christian missions and traders can be kept in Yamaguchi. If the Ouchi go back to war with the Amago and win that would net them the silver mines of Izumo...

Overall, the Chugoku Region will certainly be more important TTL; even if the ripples of less silver doesn't hit until later, they'll start there... or maybe with the rivalry between the Matsura and Omura clans. Either way, by the time Imagawa, Oda, or whoever the rising power to the east is, takes Kyoto... well, if they're more divided I imagine that means earlier unification; if however, one of the lords, like Ouchi or Mori Motonori, has unified more of the southwest and commands trade by the Portuguese (and by extension, with China), our would be new Shogun might find a more troublesome adversary, who could in turn ally with the remaining rivals.

Central Honshu nothing much changes...

The usual suspects of the Takeda,Uesugi, and Hojo clans are going to be the same regional powers as in OTL...

Agreed, changes to Central Honshu and the clans to the north won't be affected directly by this; this means the clans to take Kyoto still arrive from the east (either Oda Nobunaga, or Imagawa if Okhezama is butterflied).

 

[BBadolato]

Overall, the Chugoku Region will certainly be more important TTL; even if the ripples of less silver doesn't hit until later, they'll start there... or maybe with the rivalry between the Matsura and Omura clans. Either way, by the time Imagawa, Oda, or whoever the rising power to the east is, takes Kyoto... well, if they're more divided I imagine that means earlier unification; if however, one of the lords, like Ouchi or Mori Motonori, has unified more of the southwest and commands trade by the Portuguese (and by extension, with China), our would be new Shogun might find a more troublesome adversary, who could in turn ally with the remaining rivals.

Maybe, although this is going off the assumption that whoever is going to unify Japan is going to be an eastern daimyo, which is questionable.

Agreed, changes to Central Honshu and the clans to the north won't be affected directly by this; this means the clans to take Kyoto still arrive from the east (either Oda Nobunaga, or Imagawa if Okhezama is butterflied).

Nobunaga was by no means an inevitability, in fact, he lucked out more than anyone else. Okehazama basically weakened the Imagawa to the point the Matsudaira could gain independence and secure Nobunaga's south. When Nobunaga finally began his conquests he did so when Kansai was in chaos, if you butterfly away Hisahide's scheme, Nobunaga would find himself outmatched, and the Miyoshi more interested in keeping the Shogun as puppet then ruling as Shoguns themselves. So a clan rolling in from the east be it the Oda,Imagawa or Takeda or anyone else and simply being the dominant is not something that should be seen as a certainty, a western clan could go for it be the Ouchi/Mori provided they consolidate, same with the Miyoshi if they get a ruler who wants to disrupt the status quo.

 

[John Fredrick Parker]

BTW, @Intransigent Southerner makes some really good points about Ming China being largely unaffected; does anyone want to agree or disagree?

Maybe, although this is going off the assumption that whoever is going to unify Japan is going to be an eastern daimyo, which is questionable.

Nobunaga was by no means an inevitability... So a clan rolling in from the east... and simply being the dominant is not something that should be seen as a certainty, a western clan could go for it be the Ouchi/Mori provided they consolidate, same with the Miyoshi if they get a ruler who wants to disrupt the status quo.

Ooh, that is interesting; can't say I come across a lot of Japan being unified from the (more cosmopolitan) west TLs or concepts, but it seems like one with some real potential.

 

[raharris1973]

If there's little to no Incan silver on the world market, there's even less likely to be spread of potato cultivation outside of the Andes.

That can have huge impacts down the line. War related starvation in much of northern Europe, from Ireland to Germany to Poland can be much worse. The Irish may have a harder time being dispossessed of lands, leading to a bigger English and Scottish imprint on the island.