From Silver to Cocaine: Latin American Commodity Chains and the Building of the World Economy, 1500–2000 (review)

The concept of "commodity chains," invented by Immanuel Wallerstein, has been around for two decades, though it has not gained much popularity among economic historians. The commodity chain approach examines commodities and follows how they are produced and consumed, from the raw materials to the finished product. It was first conceived as a complement to the world systems approach, to show the links between producers and consumers without regard to national boundaries (though the approach does take into account political constraints along the way). From Silver to Cocaine utilizes this approach, in which different authors examine twelve Latin American commodities, following them from their origins as raw materials to their eventual place of consumption.

The approach has much merit to it and demonstrates how Latin America has been connected with the world economy since the European invasions in the sixteenth century. To understand many commodity chains, the contributors need to go beyond the Latin America-Western Europe nexus and take into account other continents. This is the case with silver, in which Carlos Marichal shows how this precious metal from Mexico and Bolivia went beyond Western Europe, ending up in India and China. The commodity chain approach illuminates well the important roles that the Asian economies played in the early modern period. Likewise, the chapters on rubber and coca/cocaine take into account parallel commodity chains originating in Indonesia as well as Latin America. Virtually all commodity chains either have competing products from other places or have various places of origin, such as cacao, henequen, indigo, cochineal, sugar, and tobacco, all products discussed in the book.

Despite the common approach, each essay has different strengths. The essay on silver by Marichal is a masterful overview of the monetary history of the world during the Latin American colonial period, showing that the Mexican silver peso was truly the first world currency. David McCreery compares the indigo commodity chains of the Spanish and British empires, showing that state policies were instrumental in the rise and decline of Indian, the Central American, and lastly, South Carolinian indigo. Carlos Marichal, doing triple duty, analyzes another dye, cochineal, providing evidence how small-scale peasant production in Oaxaca was able to dominate production of this valuable commodity to the nineteenth century. In turn, Laura Nater shows how the Spanish tobacco monopoly in the colonial period (mainly based on Cuban production), was intimately connected to Mexican silver remittances that provided the capital to make the system work.

Steven Topik and Mario Samper compare Brazilian and Costa Rican coffee economies and demonstrate how they were tied especially to mass consumption in the United States. Despite the concentration into few coffee companies in the United States, they argue that producers until relatively recently were able to largely determine prices. Horacio Crespo delves into the competition between sugar cane and sugar beets from the mid nineteenth century onward, showing how discriminatory state policies by North Atlantic economies favoring beets structured the trade in sugar. Mary Ann Mahoney's essay on cacao in southern Bahia also emphasizes state policies, but in this case prohibitions by Brazil to cut timber in the region, thus providing a perfect environment for the shade-loving cacao plants. Marcelo Bucheli and Ian Read investigate the Central American-U.S. banana commodity chain. They go over familiar territory, unfortunately leaving out the important commodity chain leading to Europe. Guano and nitrates, both fertilizers from the central Pacific coast of South America, merit the attentions of Rory Miller and Robert Greenhill, who show how Peru and later Chile commercialized these products. They claim that Peru's state guano monopoly (contracted out to European firms) and Chile's export taxation policies of nitrate left a significant portion of earnings from this commodity in South American hands. Brazil in the rubber trade is the topic of Zephyr Frank and Aldo Musacchio...