La ruta de la plata

China, Spanish America and globalisation

Tag: Book review

Review of “The Spanish Pacific, 1521-1815: A Reader of Primary Sources”, ed by Christina H Lee and Ricardo Padrón

The Spanish Pacific, 1521-1815: A Reader of Primary Sources, Christina H Lee (ed), Ricardo Padrón (ed) (Amsterdam University Press, March 2020)

The Spanish Pacific, 1521-1815: A Reader of Primary Sources, Christina H Lee (ed), Ricardo Padrón (ed) (Amsterdam University Press, March 2020)

Back in the day, whenever one was in a waiting room or vestibule, one would likely come across a copy of “Reader’s Digest”, which would include a diverse selection of pieces, often abridged, often extracts from elsewhere: easy reading, something to interest anyone and everyone, thought-provoking but not enough to require too much mental exertion. Continue reading

Review of “Dragonomics: How Latin America Is Maximizing (or Missing Out on) China’s International Development Strategy” by Carol Wise

Dragonomics: How Latin America Is Maximizing (or Missing Out on) China's International Development Strategy, Carol Wise (Yale University Press, March 2020)

Dragonomics: How Latin America Is Maximizing (or Missing Out on) China’s International Development Strategy,
Carol Wise (Yale University Press, March 2020)

The only surprise in the growing Chinese presence in Latin America is that it still seems to continue to catch some people (at least Americans) unawares. China is now the largest trade and investment partner for several Latin American countries and the second largest for several more.

There is of course nothing new in Chinese-Latin American commercial relations, nor in the complaints from the American side about the lopsided nature of the trade: for 250 years from 1565, the Manila Galleon took American natural resources (in particular, silver) to Asia to trade for Chinese manufactured goods. But this is now the first time in living memory that the United States has another power operating at other than toe-in-water levels in what America has, since President Monroe, considered its exclusive backyard.

In Dragonomics, University of Southern California professor Carol Wise brings the economic and trade story up to date with a (very) detailed discussion of the last twenty years of Sino-Latin American economic relations. The book is much more about Latin America than it is about China: it is likely to be of more use to the China specialist who wishes to gain a grounding in the Latin American end of the relationship than the other way around.


Regardless of how much knowledge of the region one starts with—and Wise provides the history and statistics to fill in any blanks that one might have—her synthesis and analysis are likely to prove invaluable. It should be said that Wise believes, contrary to pronouncements from the current American administration, that there is benefit to be had in relations with China—that China is not inherently or merely predatory—but whether this benefit accrues depends on conditions and policies.

Wise distinguishes between the relatively smaller, relatively more open economies of Chile, Peru and Costa Rica who have managed, on the whole, to hold their own in trade agreements with China, and Argentina and Brazil who haven’t used the business coming from China to develop their economies (and economic management) as productively as they might have. Wise places Mexico in a class of its own: Mexico, which one might have expected to be the economy best placed for a productive relationship with China has found itself faced with ever-increased trade imbalances and a testy overall relationship. Wise puts much of the blame, if that is the right word, on NAFTA which oriented Mexico, its policies and decision-making in a way that ended up weakening it vis-a-vis an ever more productive China. The other countries don’t get much of a look-in: Cuba was an important early partner in Socialism, but got caught up in the Sino-Soviet split; Venezuela and Ecuador have gotten themselves and China entangled in a mutual debtor/creditor trap. Colombia has put up barriers to protect its domestic industries.

This all comes across as clear and sensible, but there are of course divergent views, some of which Wise mentions. Some of this comes down to development and trade theory: bilateral vs wider trade agreements, the interaction between domestic reform and open economies, the importance of institutions, etc. Other controversies are social (in particular labor rights) and environmental. What Wise does not credit is the idea that China is bamboozling or pressuring Latin American countries into dependency.


Although the book is academic—statistical and analytical—in content and approach, Wise is a forceful writer. She backs her arguments with statistics, logic and references to theory. Some of this can be rather dense, but because Wise is not shy about stating her conclusions clearly and backing them up, she makes a strong case. Dragonomics is an antidote for both those who either discard the significance of the developments of the last two decades, or who think the developments are straightforward and one-dimensional. Latin America is a diverse place, and the results and consequences of China’s entry into the region vary widely from country to country; Wise notes the diversity, but provides structure and identifies patterns.

Wise has little time for Trump administration policy toward the region; she feels the renewed references to the “imperialist Monroe Doctrine” to be entirely beside the point:

As [US Secretary of State Rex] Tillerson ranted about arms trafficking, drug running, and illegal aliens penetrating the US–Mexico border, the China–CELAC ministerial meeting—a follow-up to the first such forum hosted by Beijing in 2015—approved a joint action plan for cooperation from 2019 to 2021…

pretty much sums it up.

Like almost any book being released these days, Dragonomics was written before Covid-19, which threatens to make prior analysis obsolete. But things were already changing. “The big China boom is over,” Wise notes, but she goes on:

And yet two decades into the new millennium the horizon for any number of other enriching ties in China–LAC relations does indeed seem to be wide open… Moreover, the best outcomes have stemmed from China-related endeavors where rule of law, regulatory oversight, and a clear strategy exist on the Latin American side… As a region, LAC has much to gain from its pivot towards Asia.

It the United States continues to prioritize the building of walls rather than bridges, this is likely to remain truer than it might otherwise be.

Peter Gordon


Originally published in The Asian Review of Books.

Review of “Potosí: The Silver City That Changed the World” by Kris Lane

Potosi: The Silver City That Changed the World, Kris Lane (University of California Press, May 2019)

Potosi: The Silver City That Changed the World, Kris Lane (University of California Press, May 2019)

As China and the West look at decoupling, it’s worth remembering that the world has been through this several times since they first coupled three-quarters of the way through the 16th century. That’s when the Manila Galleon connected Asia and the Americas, a trade that was, to mix metaphors, oiled by silver.

The Chinese money supply, serving more than a quarter of the world’s population, had by the 16th century, been standardized on silver. China, however, had insufficient silver of its own. Spain’s colonies in America, however, have supplies of silver that could at times seem unlimited.

These initially came almost entirely from a single set of mines in what is now Bolivia, the cerro rico (“rich mountain”) of Potosí.


Kris Lane’s new book tells the story of Potosí, a boomtown like no other. Silver was discovered there in 1545, little more than a decade after the Spanish defeat of the Inca Empire. The perhaps apocryphal story includes a llama, a gust of wind and dirt carried in a blanket. Potosí, it turned out, was literally a mountain of silver. It soon became the single largest source of silver in the world, at times producing more than half the world’s silver: silver which paid for imports from China, found its way to the Mughal Empire and paid for Emperor Charles V’s European wars. The resulting liquidity drove global economic growth and rearranged markets; inflation and currency shocks shook Empires worldwide.

Lane’s book, however, is not so much about the financial implications of this flood of silver as it is about the city that grew up around the mines. At its height, Potosí’s population was well over 100,000, “more inhabitants than all but a few European cities.” It was a city of churches, drinking, commerce, vice and—more than anything—money.

Rollicking is not a term normally applied to books from an academic press, and it is perhaps an exaggeration, but only a slight one, to use it here. Lane includes technical, mineralogical, chemical, historical and other background, but his focus is on the stories, la comédie humaine, that played out in Potosí during the two and three-quarter centuries between the discovery of silver and Simón Bolívar’s declaration of independence delivered from the Cerro Rico’s peak. The country of Bolivia now bears his name.

One anecdote worth repeated in full is from Inca Garcilaso de la Vega’s Royal Commentaries of the Incas,

In Potosí, in 1554 and 1555, there was a parrot that spoke so well that when the Indian men and women passed by in the street it would call them by their respective tribes, saying “Colla”, “Yunca”, “Huairu”, “Quechua” and so on, without any mistakes, as if it realized the meaning of the different headgear they used to wear in Inca times to distinguish themselves. One day a beautiful Indian woman passed down the street where the parrot was. She was attended by three or four servants, who treated her as a lady palla, or member of the royal blood. When the parrot saw her, it shrieked and laughed: “Huairu, Huairu, Huairu!” the name of a tribe that is looked down upon by all the rest. The woman was very much humbled in front of the bystanders, for there was always a crowd of Indians listening to the bird. When she was opposite it, she spat at the bird and called it supay, “devil”. The Indians said the same, for it recognized the woman though she was disguised as a palla.

The story is fun, but it echoes a theme of Lane’s: that in Potosí a hybrid society sprang up, where native people and Spaniards, as well as slaves from Africa, lived and worked together, cross-pollinating culture, technology (indigineous smelting technology using wind was one of the most effective), politics and culture. While there was certainly a hierarchy and terrible exploitation of the indigineous people through the infamous mita forced labor system, neither the indigenous community nor, indeed, women were locked out of either mining or other commercial activities; some became quite affluent:

Diego de Ocaña, who begged for alms in Potosí in the year 1600, describes a visit to the house of “a very rich Indian,” Pedro de Mondragón, who advanced silver coins to mine owners in exchange for raw ingots… “And he has all of his capital in his house at all times,” Ocaña claims, “before his eyes. He has a room filled with silver, in one part the bars, in another the ingots [‘pinecones’], and in another, in some jugs, the coins [reals]. I was quite stunned to see so much silver in one place and I asked him how much was there, that I was seeing, and he replied to me: ‘There are 300,000 pesos of assayed silver.’” Mondragón was in fact a mestizo, son of a Spaniard and an indigenous noblewoman. He dressed in the Spanish fashion yet he preferred to live “like an Indian.” This social and economic hybridity left Diego de Ocaña perplexed, but it was pure Potosí.


Potosí had its ups and downs; from the 17th century, mostly downs. The easiest silver was tapped out and the solution—the use of mercury to extract the metal from the ore—was deadly. In a geological twist of fate, Peru also had one of the world’s largest supplies of mercury.

There were floods and plagues, corruption and a huge fraud in which the silver in the coins was debased:

On the far side of the world, Potosí coins had been routinely rejected in the spice ports of India and Southeast Asia. Frustrated merchants working for the English East India Company complained from Surat to the home office beginning in the early 1640s, but even when the new and improved coins appeared after 1652, pepper kings in Sumatra would not touch them. As far as they were concerned, “P” was for poison. It took decades to restore confidence in the once-famous money of Potosí. Mughal India had another solution: millions of suspect Potosí coins were recycled as rupees, discounted as scrap to bullion dealers happy to extract all the good silver.

This was a calamity that never befell the other main colonial mint in Mexico. Indeed, Potosí progressively lost ground. The Manila Galleon was exclusive to Acapulco, silver deposits rivalling those at Potosí were found at Zacatecas, while in 1733, the Mexico mint launched coins whose blanks were made on a milling machine to ensure a consistent weight and size. Their edges were also raised with serrated edges, meaning that it was easy to tell if they have been tampered with. It were these “milled” pesos, from Mexico not Potosí, that became a global currency that evolved into the US dollar, the yuan and yen.

But Lane writes that Potosí kept on bouncing back, perhaps not as high as before, but high enough to allow some residents to live in the style to which Potosí had been accustomed. Even today, there are miners are Potosí; they were critical to former President Evo Morales climb to the top job.

Potosí’s history has some lessons for today: wealthy cities can pop up in the most unlikely places, whether a wind-swept mountain plateau, a swamp-filled jungle or a barren rock. But it is also one of the first and archetypal examples of what has become known as the “resource curse”: its economy never diversified, something admittedly difficult at 4000 metres.

The mountain, however, endures.

Peter Gordon

“Empires of the Weak” by JC Sharman and “The Silver Way”

I recently reviewed Empires of the Weak: The Real Story of European Expansion and the Creation of the New World Order by JC Sharman for the Asian Review of Books. Sharman argues, quite convincingly, that Western superiority over Asia, in particular military superiority, and the successes supposedly arriving therefrom, have been greatly overstated.

Seeking to turn conventional wisdom about Western global expansion on its head, Sharman argues not only that the reasons normally given for it don’t hold up, but that this “victory” was largely illusory.

His primary target is the “military revolution thesis”, which runs, in essence, that because Europeans were so busy fighting each other, they became good at it, yielding “superior military power: better weapons, and better organizations for using them.” Yet until well into the 18th century, with the major exception of the Americas, Europeans made nary a dent in the places they expanded to, at best holding some coastal ports and often only with sufferance of the suzerain.

Empires of the Weak: The Real Story of European Expansion and the Creation of the New World Order, JC Sharman (Princeton University Press, February 2019)

Empires of the Weak: The Real Story of European Expansion and the Creation of the New World Order, JC Sharman (Princeton University Press, February 2019)

Although Sharman extends his analysis beyond to the present day

Europeans didn’t win in the end: their empires fell, and their military capacity shriveled. Even the United States has experienced more defeats than victories against non-Western forces over the last half-century…

his discussion of the earlier period overlaps that of la ruta de la plata which is not, of course, a story of European domination.

***

The most interesting overlap in Sharman’s analysis with The Silver Way is his discussion of historical narratives and how they affect present-day understanding, in particular how

a tendency to string together Western victories from Cortes and da Gama to Plassey in 1757 to the nineteenth century to produce a false story of four centuries of Western dominance.

For Sharman, the eurocentric narrative arises from the application of a considerable amount of post hoc ergo propter hoc reasoning and projecting conditions backward from a post-Industrial Revolution period to the early-modern period. The Silver Way argues, conversely but similarly, that the Anglo-American narrative that conflates globalization with political of economic liberalism is the result of omitting the history of Asian trade in the early-modern period. He concludes:

Moving away from the conventional story of Western puts our current circumstances in a new light… The questions we ask, and fail to ask, about history change our views not only of where we have come from, but also where we are, and where we are going.

[Peter Gordon]