While studying European guilds last year, I came across a debate over the “Golden Age” of the Netherlands (1580 to 1680). The issue was whether Dutch guilds were weak or strong. I wanted to delve into this subject, but doing so would have been futile. I don’t know the Dutch language. The best writing about Dutch guilds in the seventeenth century would be in Dutch.
I suspect that many historians, including economic historians, have experienced this same problem and not given the Dutch the study they deserve. Historians tend to praise the early muscularity of the Netherlands economy but then dismiss the country as being unimportant in the long run because it missed out on the Industrial Revolution.
This, despite the facts that the country increased its farmland by one-third (from 1300 to 1800) through reclamation from the sea, it had a prosperous economy before any other country, and it had a sturdy middle class in the age of Rembrandt. But it didn’t have factories until late in the nineteenth century, so it was “backward.” It fell off the charts of history—its high point being 1688, when its stadtholder, William of Orange, became the king of England.
Oh, and it was barely even a country in its Golden Age.
Let me take a minute to clarify. The modern country of the Netherlands (sometimes erroneously called Holland, which is just one of its seven provinces) is a largely Protestant nation that once extended as far as the Catholic Netherlands provinces that later became Belgium and Luxembourg. In 1581 the seven Protestant provinces revolted from the Spanish crown and, over time, became the United Provinces or the Dutch Republic, forming the basis for the present country.
Fortunately, I came across a book in English that treats the Netherlands more seriously. It is The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500-1815, written by Jan de Vries and Ad van der Woude (both born in the Netherlands).[1]
They argue that the economic history of the Netherlands has been poorly understood. “The Netherlands’ early economic advance had to be set aside [by other historians] as a curiosity of another epoch,” they explain.[2] It just didn’t fit into the story of the Industrial Revolution. Robert Brenner’s description of the Dutch economy as mostly a reflection of the European economy was “a convenient position for those wishing to dismiss an inconvenient historical phenomenon (and emphasize the achievements of England).”[4]
De Vries and Der Woude say otherwise. More important than “industrializing” was “modernizing, and the Netherlands economy was the first modern economy. By the end of the seventeenth century, it had:
- Largely free markets
- High productivity in agriculture
- A government that respected property rights, contracts, and free movement of people (the latter didn’t fully occur in England until 1795), and it paid some attention to social problems
- Technological and organizational skills.[5]
The Dutch economy did falter as the eighteenth century began. But so, eventually, did Great Britain’s economy. Yet both contributed to the modern economy we have today and, according to de Vries and der Woude, the contributions of the Netherlands should get more respect.
[1] Jan de Vries and Ad van der Woude, The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500-1815 (Cambridge: Cambridge University Press, 1997).
[3] De Vries and der Woude, 711.
[4] De Vries and der Woude, 178.
[5] De Vries and der Woude, 693 (paraphrased).
While our son was taking art history last year, I read his text, which rekindled my appreciation of the 17th century Dutch artists who influenced art for the next couple of centuries. Tar Heels should visit the North Carolina Museum of Art in Raleigh. The museum’s collection includes many fine Dutch paintings of the “Golden Age.”
The American Founders owed much more to the Dutch than commonly recognized. One reason the Dutch economy had thrived was that the Netherlands attracted people from all over the western world because it offered freedom of religion. English competition with the Netherlands helped the cause of religious toleration in Britain.
When considering how to constitute our own government, the Founders studied carefully the Dutch system, which at the time was a federal republic. For example, it was one of the few republics to lodge the executive power in a single magistrate, the stadtholder. The Constitution’s drafters followed this example. The presidency was more similar to the stadtholder-ship than to any other foreign republican magistracy.
The Founders also examined the balance of power between the central government and the seven provinces in the Dutch republic. In this case, the Founders were less impressed, but they learned from the Dutch failings in this regard. For example, after intentionally or unintentionally following the Dutch model in the Articles of Confederation, they abandoned it in the Constitution.
The formal name of the Dutch republic was “the United Provinces of the Netherlands.” If that sounds a lot like “United States of America”—well, it’s no accident. A popular 1752English translation of Montesquieu Spirit of the Laws rendered his reference to the United Provinces of the Netherlands (les États qui s’associent) as “the united states.”
In other words, the Netherlands, even after it had passed its prime, exercised significant influence over our own political institutions.
Jan de Vries is indeed the classic economic historian for the Netherlands, so he is a good reference point.
It might be interesting to add that, from the Dutch perspective around the 1800s, it was more profitable and prudent to invest in trade (which was the main form of income) than in industry. At that point nobody could’ve known that the industrial revolution would change the global market to the extent it did; only we know this, of course. When Belgium split off in 1830, it took a different course and invested in its industrial sector and is now lauded as the first Continental European state to industrialize. But at the time this would’ve been a risky move for a country with such a small market.
The important book on economic growth, Why Nations Fail, by Daron Acemoglu and James A. Robinson says favorable things about the Netherlands. They say that the way nations reacted to the opening of the Atlantic by Columbus et al was very different. England and the Netherlands were prepared and gained from the shock, but Spain and Portugal did not react favorably, even though they produced early explorers.
Would this be an example of the the hypothesis that human capital is by far the most important natural resource?
Musing on this a bit, could we say that the Industrial Revolution itself could not have happened except for liberated and liberal applications of that ever increasing natural resource–human intelligence and creativity?
Whatever the answers, thanks for putting Netherlands out there for consideration. Exceptions are far more stimulating for thought than the expected.