Spain's New World Wealth: Gold, Silver & the Triangular Trade

Spain's 16th–17th century dominance rested on two pillars from American colonization:

1. Precious Metal Influx

• 1500–1650: ~180 tons gold, ~16,000 tons silver shipped to Seville
• Sources: Zacatecas, Guanajuato (Mexico), Potosí (Bolivia/Peru)
• Mita (forced labor) + mercury amalgamation (patio process) = scale
• Funded Habsburg wars, Spanish Golden Age, European price revolution

2. Global Trade Network (Triangular + Manila Galleon)

• Atlantic Triangle: Europe (manufactures) → Africa (enslaved people) → Americas (silver, sugar, tobacco, hides) → Europe
• Manila Galleon (1565–1815): Acapulco ↔ Manila — Silver for silk, porcelain, spices (Asia link)
• Seville/Cádiz monopoly (Casa de Contratación) until 1778
• Created first truly global economy

Why It Didn't Last

• Inflation eroded silver's value
• Dutch/English/French privateers → naval wars
• No domestic investment → "rich empire, poor nation"
• Bourbon reforms (1700s) came too late

Legacy

Spanish language, Catholicism, law, genetics across Americas. But extractive institutions persist (Acemoglu & Robinson).