It's a recurring theme. At the time of the Civil War, the Mississippi River Valley had more millionaires per capita than anywhere else in the US.

https://www.history.com/articles/slavery-profitable-southern...

> It made the country so rich that they stopped caring about other stuff, they could just buy them from elsewhere. So there was little incentive to manufacture first, and industrialize later.

Transcontinental fleet of ships regularly circumventing the globe and transporting cargo requires lots of technology. Why marine industry didn't stimulate manufacturing and industrialization?

never heard of the dutch disease (i am dutch). pretty cool comment thanks.

kind of funny to think they still have trouble to actually extract that gas due to activism around earthquakes and ppl not eager to move away from these places. also now the climate push.

it kinda looks (from an uneducated perspective) they suffered this disease for nothing.

Spaniard there. We have gentlemen like Leonardo Torres Quevedo and the 'Telekino', something even the IEEE would get amazed of.

But our damn national motto on R&D was "Que inventen otros" (Let the -foreign- ones invent).

EDIT: It actually was "Que inventen -sth- ellos" (let the others invent -it-).

Something like let's just slack down/keep living under a traditionalistic, rural, Romantic life at the 19th century, let the rest do the modern inventions. OFC as I said Torres Quevedo was the exception, but overall I find our right wing politicians still have that Empire bound mindset. Even the progressive left are almost ranting luddites, they look the Science down from their Liberal Arts thrones.

In the end it's some kind of outdated rural-Romantic idiots fighting another share of left sided outdated jerks with, paradoxically, a similar love to the Rural Spain, with the pure, hard working, 'ecological' peasant against the polluting urbanite.

And sometimes I wish these Boomer (literal boomers in both sides) influenced journalists get to the times for once and all. Use science to fight the climate change. Use libre software to expand education and knowledge like anywere else in History. Act smart and not with the guts.

But that's Science Fiction here.

Indeed. I believe the parent commenter should pause and assess why people buy things, and what makes something desirable or a luxury good. We can start with mechanical watches: They are of poorer quality by every utilitarian measure than a crystal-oscillator driven one, but command much higher prices and status.

> every other metal known at the time

You’re forgetting lead, but the point is all the same.

> Value is ultimately always in the eye of the beholder.

If you mean value per se, not at all. There are difference kinds of value (intrinsic, instrumental).

A piece of bread has objective nutritional value, for example. It doesn’t matter whether you personally dislike bread.

> then of course, industrialize early.

It's extremely convenient to have coal, iron, and waterways in the region where you wish to achieve that early industrialization.

There's a map somewhere showing where those happened - England, France/Germany, eastern/great lakes US.

How can you conclude that the current price and value is fairly close? Seems to me that all you are showing (rightly so) is that there are some use of gold which has higher value than today's price.

I agree that industry use creates a price floor, but that might be much lower than what the price is today. I.e if suddenly everyone lost faith in gold as a carrier of value, so everyone who keeps gold just as a passive keeper of value started selling it off, then we would get a new market clearing price which represents golds 'real value'. I have no clue what this would be, but it is certainly not obvious to me that it's close to today's price.

It wasn't an arbitrage thing and I'm not sure there's anything fruitful in the comparison to saudi arabia.

The Spanish Empire was, more than anything else, a product of the reconquista. The major institutions of Spain were all directed towards the taking and holding of new lands. When granada finally surrendered in 1492, the monarchy turned towards conquering the canaries and then the new world to avoid the large scale structural changes needed to go from a militaristic, medieval nation to a peacetime state in the early modern. The systems of repartimiento and encomienda were more or less borrowed wholesale from the reconquista. The conquistadors and chroniclers all saw the Americas through the lens of the chivalric literature they loved. The name "California" was borrowed from one of those books, about a fictional island of Amazons who aided the moors.

Precious metals were a solution to the problems Spanish monarchs had in organizing Spanish society. It paid for soldiers in the monarchy's constant wars. It paid off loans to italian and dutch financiers, and it was something that could much more easily be controlled by a distant monarch than import duties or taxation (which nobility were largely exempt from). It also gave them some limited control over their inflation issues by devaluing and revaluing the coinage as financial pressures required. This eventually caused other problems, but the point is that Spain was never really an arbitrage play. They didn't have to be, since they controlled some 30% of the world's gold supply and >90% of its silver at points.

One thing you can do when people are spending money on magic beans is point out that magic beans don’t exist and they are all stupid for buying them. The other thing you could do is open a magic bean store.

then,

selling people a better understanding of why they find things valuable, is worth a lot!

A lot of Marx's writing was based on Smith's, so they agree a lot.