Herewith a brief response to the critical-though-friendly comments by Mike Robison, Deirdre McCloskey, Rebecca Menes, and Ed Perkins, all of which floated out of cyberspace and into my comnputer today.(posted 8755 days ago)1) Mike, Deirdre, and Ed suggest that a flaw in my basic argument -- that accumulation from the New World after 1500 initiated the rise of Europe relative to other civilizations -- is the fact that economic development post-1500, and later the Industrial Revolution, took place in northwestern Europe, not in Iberia, although the New World wealth went to Iberia.
A partial answer to this critical point is in my 1993 book *The Colonizer's Model of the World: Geographical Diffusionism and Eurocentric History*, p. 211: "There is debate as to why the center shifted from Iberia to the lower Rhine - southern England region. Perhaps the same forces which had made this northern region a mercantile-maritime center in the Middle Ages permitted it to gain control of the overseas enterprise: namely, large population, abundant nearby fertile land and forest resources, access to many markets (the Rhine, the Baltic,etc.). Vis -a-vis Italy, it held most of these same advantages plus that of location on the Atlantic and possession of the requirements for rapid growth of oceanic shipping and fishing fleets."
I should add this perhaps crucial factor, largely derived from the fact of prior economic dominance: merchant communities of northern Europe and Italy bankrolled much of the American adventure, managed to become the suppliers of manufactured goods which were exchanged for the American preious metals obtained by the Spaniards, and participated actively in the adventure (the Welsers for instance purchased the right to colonize part of Venezuela and had factories in Hispaniola and Seville in the 16th C.; Antwerp captured the market for Asian spices; Dutch bottoms carried Brazilian sugar, while Dutch interests partially controlled the Brazilian plantation enterprise and participated in the slave trade, etc.).
2) Mike asks: "Was the gold and silver obtained from the americas that significant in relation to the scale of the Asian economies?" Deirdre asks whether American specie is relevant. Again I will shamelessly quote from my book (pp. 189-193):
"We notice first the export of gold and silver from the Americas and its insertion within the circuits of an eastern hemispheric market economy in which gold and silver already provide the common measure of value, directly or indirectly,in almost all markets. ...By 1640 at least 180 tons of gold and 17,000 tons of silver are known to have reached Europe.(The real figures must be at least double these amounts,since records were poor... and since contraband was immensely important)...In the period 1561-1580 about 85% of the entire world's production of silver came from the Americas. The simple quantity of gold and silver in circulation in the Eastern Hemisphere economy as a whole was profoundly affected: hemispheric silver stock may have been tripled and gold stock increased by 20% during the course of the l6th century as a result of bullion brought from America. ... (In Europe, the circulation of metal coins increased eight or ten fold in the course of the century.) This process must be seen in perspective: it is money flowing constantly and in massive amounts into Europe, through Europe, and from Europe to Asia and Africa, constantly replenished at the entry points with more American supplies, and constantly permitting those who hold it to offer better prices for all goods, as well as labor and land, in all markets, than anyone else had
ever been able to offer in prior times. The importance of these flows of gold and silver is routinely underestimated by scholars, mainly for three reasons... First, the process is seen somehow as purely primitive accumulation. But the metals were mined by workers and transported by workers; the enterprise overall involved risk capital and all of the other familiar traits of the sorts of protocapitalist productive enterprises which were characteristic of that time (that it was partly state controlled does not alter this argument, nor does the fact that some of the labor was unfree); and very major economic and social systems were built around the mines themselves in Mexico, Peru, and other parts of America.Second, the argument that precious metal flows significantly affected the European economy is dismissed by some scholars as "monetarism"...The error in this charge is a failure to see the 16th century economy in its own, appropriate,geographical and social context...Two facts here are basic.First of all, the possession of precious metal was highly localized in space. European merchants, as a community, obtained it and set it in motion outward, toward rural Europe and toward markets outside of Europe. Second of all, the supply of precious metal was essentially continuous, and therefore the advantage held by European protocapitalists in terms of prices they could offer for commodities, labor, and land was persistently higher than the prices which competitors anywhere could offer...A third sort of doubt... about the importance of American gold and silver is associated with the critique of Earl Hamilton's classic theory... He was (partly) wrong about the mechanisms which brought about this change. The metals did not transform the economy in any direct sense. Rather, they enriched the protocapitalist class and... gave them the power to...[transform] a political and social system..." [Citations are in the book.]
I would add: Gold and silver were commodities, very high-value products obtained at extrmely low cost by the European merchant community and then sold in exchange for other commodities, land, labor, etc., both inside and outside of Europe. That's how they got rich.
3) Mike comments on my (very tentative) argument that steadily increasing and unlimited markets led manufacturers to adopt new technology in the (mainly early 19th century and later) Industrial Revolution: "Steadily expanding markets are a very useful thing, however [Asian] businesses had larger markets...it seems if the the scale of markets was the 'unique advantage,' the advantage would have gone to the Asians."
The issue is not scale but rate of change. Formal and informal colonialism provided pre-IR Europe with huge new markets, and the economic development (and warfare) of 17th and 18th C Europe was producing additional new markets. I have not seen any argument that Asia and Africa in this period were enjoying anything like the same rate of growth of demand for non-subsistence products, nor do I know of any prior period anywhere where manufacturers could contemplate rapid and continuous expansion of the market for their commodities and hence could logically -- perhaps regardless of real labor costs -- invest in new technology. This constantly expanding, constantly modernizing system was put together mainly in the first third of the 19th century. The rest is history (and geography).
3) Rebecca: "China is handicapped because it is a unified state." In another post I gave my reasons for disputing the view that Europe's political fragmentation was more favorable to growth...