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Lesson 5: Early Globalization (pt. 2)
How Globalization Creates Privilege
Notable seizures:
Portugese im Macau (1554)
Spain seizes Manila (1571), takes over pre-existing trade routes.
Galleon Trade - Two galleon trade ships that traded majority gold and treasure, eventually leading to the golden age of piracy
The Columbian Exchange preconditioned globalization to be unequal
Spanish Silver
1579 Marked a new age of piracy on the pacific ocean
Francis Drake
Farmers son, most successful pirate in history.
He used two cannonballs chained together to take down the main mast of the ships, rendering them inoperable
The Spanish had an abundance of silver, 26 tons from the americas, enough to pay off all British debt, then fund their government for a year.
Drake, backed by the Queen Elizabeth I, rained over 30 and sank over 70 with special permission from the Queen.
He was so notorious that the Spanish crown was willing to offer 10 Million modern day dollars for Drake, dead or alive.
He used a very special method of attack, he would slow his ships down and disguise them as merchant ships, getting as close to the Galleons as possible, usually seizing the vessel whole rather than sinking them.
Andes - South America
The turning point of Spanish silver trade, the Potosí silver mine. Essentially a mountain made of silver, it was formed 170 million years ago, when tectonic plates collided. It is to date the largest silver mine in the world.
For the next 300 years, Potosí would supply 80% of the world’s silver.
But within 20 years, all of Potosí’s pure silver would be mined out.
The remaining ores are too impure to be extracted using heat
Bartolomé de Medina
experimenter, inventor, Spanish textile trader
In 1553, he travelled to the Potosí mine to attempt to extract the silver.
His method that had been tested in Europe - Chemical formula for extracting silver using mercury - initially failed.
Medina failed to realize that the rocks that bear silver here have significant less copper sulfate than back in Europe.
After much experimentation, he realizes the missing component, and created the silver extraction method, but at the same time, he also unlocked the doors to a new era.
With this discovery, silver production from Potosí dramatically increased, with 220 tons of silver mined every year. Making it the busiest industrial complex in the world.
With their new-found wealth, the Spanish began to mint Pesos de ocho, pieces of 8. An estimated 2.5 million coins were minted yearly. The coin is equivalent to 80 modern day dollars.
This not only kickstarted trade in Europe, it also marked the true beginning of globalization. From here on out, the world had entered a new era, one where global trading was seamless
The Peso was the first true global currency, with it being found from Asia to America. It was considered legal tender in the USA until 1857 and was the direct inspiration for the dollar sign.
In total, 50000 tons of silver was shipped out of the Americas, so much so as to create new Atlantic trade routes.
What is money?
Money - Anything that is widely accepted or used to exchange for goods and services.
Bartering - Exchanging goods for goods
Characteristics of Money
Functions of Money
Generally acceptable
Scarce
Durable: Strong and can last long time
Divisible: Can be split into units of different values
Portable
Act as medium of exchange
Stores value: save and spend later
Unit of account: measure value
Act as standard for deferred payment: allow people to borrow and repay later
Holland’s Tulip Craze
Amsterdam 1639
A century after the Spanish expeditions, Holland has become the richest nation on the planet, controlling over half the world’s shipping, and having the most millionares in all of Europe, boasting the highest income per head in the continent. while at the same time also becoming the gambling city of Europe.
Accompanying new riches, are new luxuries. That luxury, in this case, would be the tulip. Tulips from Türkiye infected with a specific disease that makes its petal especially vibrant. At the height its popularity, it could sell for 100 times its weight in gold.
Jan Van Goyen
Struggling artist, eager investor
Around this time, a new form of product was also created, futures markets, the rights to obtain next year’s profits.
Enter Van Goyen, a struggling artist who decided to take a gable in the tulips market, he invested all of his savings into tulip shares.
November 1636 | December 12th 1636 | January 1637 |
Prices Quadruple | Prices Double (10x original price) | Double Again |
For commoners, this was the their one chance to become wealthy, where everyone had a shot in the market, it could turn orphans into millionares, as well as the opposite.
make it rate
chance for common to become wealthy
some investors decide to sell
fan hoyen doesnt confident that it will rise
feb 3rd 1637 - auction, first batch of tulip bulb go unsold
in days, investors panick to sell shares, but no buyers
prices crash - used to worth 5000, now worth nothing
value of investments can go up and down, they learn
fan hoyen draw to repay debt
1200 pics, 800 draws,
pilgrim
Slave trade
rural centeral africa, modern day angola
Warrior queen, defend empire
defend against portuguesse, who want land and people as slaves
need slaves to manufacture sugar
africans traded africans
powerful africans sold africans to keep safe from portuegese
portugese now stop working with her, start taking her ppl as slaves
portugese work with african warlords
aindongos outnmbered and surrpounsed
people gets enslaved
over 3 centures, europeans slave trafers transfer 15 million africans, mostly from centeral africa
over next 20 years till death, fight to keep indongo people safe
250 years later, slavery abolished
india - riches from american turn ruler indian ruler into richest man on planet
1631 boorham pur fortress
shajahan - emporor of 100 million people
shajahan means king of the world
trasure hosues, house large amounts of scarce materials
many american traders come to india for textiles cotton silk spices etc.
100 tons of silver pours into india each year
millions in taxes giving to shajahan
favrite wife in labor, muMtaz mahal
14th child
many wives
mahal first wife
inspiration behind the throne