New World Gold: Cultural Anxiety and Monetary Disorder in Early Modern Spain (review)

Elvira Vilches's New World Gold: Cultural Anxiety and Monetary Disorder in Early Modern Spain is a pithy analysis of the literature on gold and money in early modern Spain. She surveys economic writing, both of more traditional humanists and of theologians such as Antonio de Guevara and Tomás de Mercado, who perceived the new power and mutating value of money in Spanish society as so many signs of decadence that had to be stemmed if Spanish valor, values, and valuable men alike were to survive. In addition, she analyzes the works of the newer mercantilist thinkers, the arbitristas (political economists), who came forward with new and often outlandish ideas designed to remedy the crisis of money and value facing Spain. While their proposed solutions were often targets of ridicule from their contemporaries, these thinkers, such as Luis Ortiz, had the merit of comprehending that the world of money and value had irrevocably changed, and that a return to the past was impossible, because money had mutated from being a medium of exchange with a fixed and intrinsic value to being in itself a commodity whose value could change in relation to supply and demand. Vilches also looks at the works of literary writers from Spain's Golden Age, such as Cervantes and Lope de Vega, who commented in their plays, poetry, and novels on the impact of the Indies and New World gold on Spanish culture and society.

All of these writers shared a sense of crisis. They uniformly divided Spanish history into two halves: before the discovery of the Indies and after. Spanish intellectuals were decidedly ambivalent regarding the impact of the Indies and its fabulous wealth on Spanish society, probably more so than the general public. As a rule, they seem to have felt that the ramifications were more negative than positive, as the wealth of the New World, real and imaginary, began to erode Spanish values in every sense of the term, the value of money, the value of honor and masculinity, and the value of Spanish production. The perplexing conundrum of gold, its worth and its meaning, began with Columbus's earliest voyages, Vilches contends, when, ironically, the very paucity of gold that Columbus initially was able to extract from the Caribbean forced him to coin an "economy of the marvelous," a discourse in which all sorts of signifiers—such as cannibals, Amazons, and exotic animals—were substituted for gold, and meant to convey the promise of gold yet to come. Moreover, Taino slaves also became useful gold signifiers, as well as a handy means of raising the real thing in the absence of silver mines and hoards of gold such as Cortes would later find in Mexico. Thus from the outset, "gold," viewed in the Middle Ages as intrinsic and immutable in value, began to be transformed into something mutable and unstable.

The ensuing flood of gold and silver from the New World during the sixteenth century, far from resolving this problem of slippage, only exacerbated it enormously, as inflation threatened to rob money of any fixed standard of value. Worse, from the perspective of Spanish observers, was that gold and money began to develop very different values in Spain and in the Indies, because the ubiquity of precious metals and relative scarcity of food and, especially, manufactures in the New World meant that products ranging from bread to breastplates cost much more in the New World than in Spain. Meanwhile, lamented the Spanish intellectuals, Spanish men were increasingly content to spend their New World gold on products made elsewhere in Europe, which, the mercantilists in particular recognized, undermined the structures of the Spanish economy and enriched Spain's neighbors and competitors. The New World, which appeared at the outset such a boon, hearkening a God-given opportunity for Spain to take precedence in Europe and lead Christians...