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The Business Model of the One-Galleon System

In: The Capital Market of Manila and the Pacific Trade, 1668-1838

Author

Listed:
  • Juan José Rivas Moreno

    (European University Institute)

Abstract

The large profits of the Pacific exchange were the result of the monopsomonopsonicnic nature of the market for MexicoMexican peso-minted pesos, whose demand was global but their supply was limited to the mint in MexicoMexico (city) City. This skewed the bargaining power in the Pacific exchange in favour of the wealthy wholesalersMexican wholesalers of Mexico that could control the supply of inputs into the mines and the flow of pesos within New SpainNew Spain, allowing them to become price setters in the international fairs. Manileños, unable to operate beyond the Mexican cartelcartel, sought for ways to minimise its impact and prop up prices. Their response was the limiting of the volume of the trade and the creation of a mirror cartelcartelsellers' to operate in the AcapulcoAcapulcoAcapulco Fair fair. The one-Galleon systemone-Galleon system became a business model through which Manila merchants could enforce their cartel and minimise the disruptions that could result from crossing the largest ocean in the world.

Suggested Citation

  • Juan José Rivas Moreno, 2024. "The Business Model of the One-Galleon System," Palgrave Studies in Economic History, in: The Capital Market of Manila and the Pacific Trade, 1668-1838, chapter 0, pages 133-156, Palgrave Macmillan.
    • Handle: RePEc:pal:palscp:978-3-031-71810-6_4
    DOI: 10.1007/978-3-031-71810-6_4
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