Global silver: Bullion or Specie? Supply and demand in the making of the early modern global economy

In the early modern period the world economy gravitated around the expansion of long distance commerce. Together with navigation improvements silver was the prime commodity which moved the sails of such trade. The disparate availability of, and the particular demand for silver across the globe determined the participation of producers, consumers and intermediaries in a growing global economy. American endowments of silver are a known feature of this process; however, the fact that the supply of silver was in the form of specie is a less known aspect of the integration of the global economy. This chapter surveys the production and export of silver specie out of Spanish America, its intermediation by Europeans and the re-export to Asia. It describes how the sheer volume produced and the quality and consistency of the coin provided familiarity with, and reliability to the Spanish American peso which made it current in most world markets. By the 18th century it has become a currency standard for the international economy which grew together with the production and coinage of silver. Implications varied according to the institutional settings to deal with specie and foreign exchange in each intervening economy. Generalized warfare in late 18th century Europe brought down governance in Spanish America and coinage fragmented along with the political fragmentation of the empire. The emergence of new sovereign republics and the end of minting as known meant the cessation of the silver standard that had contributed to the early modern globalization. A word of caution (and a disclaimer): readers should not expect to find hard quantitative evidence on the monetary regime as the institutional setting produced no consistent statistical information of note. Instead, the essay offers an analytical narrative of the pre-modern world monetary system without central banks.