Re-examining the social impact of silver monetization in the Ming Dynasty from the perspective of supply and demand

Abstract

Existing studies have shown that the monetization of silver in the Ming Dynasty effectively promoted the prosperity of trade in the Ming Dynasty, while the prices of labor, handicraft products and grain were long suppressed by the deformed economic structure. With the expansion of silver application, the fluctuation of silver supply and demand exacerbated the above contradictions. Capital accumulation that should have been obtained through the marketization of labor was easily plundered by the landlord gentry class through silver. This article re-discusses the issue from the perspective of supply and demand. Compared with the increase and then decrease of silver supply, the evolution of silver demand is more complicated: at the tax level, the widespread use of silver leads to a huge difference in the elasticity of production and trade taxes. When government spending surges, the increase in tax burden will be mainly borne by agriculture and handicrafts. At the production level, the high liquidity of silver makes the concentration of social wealth more convenient, while the reduction in silver supply and the expansion of demand have rapidly expanded deflation, further exacerbating the gap between the rich and the poor. Such combined effect of supply and demand factors has caused the monetization of silver to become an accelerator of the economic collapse of the Ming Dynasty.