- Dutch Primacy in World Trade, 1585-1740 by Jonathan Israel
Oxford, 462 pp, £45.00, June 1989, ISBN 0 19 822729 9
Jonathan Israel seeks, as few before him have done, to explain the phenomenal rise and then fall of the Dutch commercial hegemony by viewing it against a global background. His theme is its centrality ‘for over a century in the making of the Early Modern world’. His big book comes close to being a history of Europe, even of the whole world, or at least of commercial relations everywhere and the bearing of these on political relations. A copious supply of maps, tables, graphs, bolsters the epic story that he has to narrate. He tells it in sober language, but it is dramatic enough by itself to be in little need of adornment. The statistical evidence drawn upon is remarkable in its extent, and often requires expert judgment for its interpretation. His conclusions differ at various crucial points from generally accepted views. Some of these derive from Braudel, ‘the French grand maître’ as Israel calls him, whose ideas he takes as ‘landmarks to help plot our course’. Not seldom, nevertheless, he finds the master at fault; most frequently he convicts him of underrating the effectiveness of governmental measures against foreign trade.
This is a study nearly as much of war and its motives as of economic history. In the 1650s little Holland – more properly the United Provinces – fought Sweden in the Baltic, and Portugal in Ceylon. Wars were now accompanied by drastic action against enemy commerce, and by reprisals in kind. A nobleman could not take part in trade without derogation from his rank: a king, even as haughty a one as Louis XIV, was free to do so, directly or by proxy. The war provoked by Louis in 1689 had territorial objectives, but ‘it was also the most relentless economic war of the mercantilist period.’ Such conflicts imposed heavy burdens and losses on commerce. Privateers roved the western seas as pirates did the eastern. Many merchantmen carried guns, and had to be escorted by warships. Yet however much these overhead costs hampered growth, ‘national’ rivalries and feuds stimulated it; tooth-and-nail competition, it may appear, has been the price of progress. Comparison with Asia suggests that on balance Europe benefited from its self-imposed ordeals; elsewhere, both society and business enterprise were too inert to generate such struggles.
There can always be too much of a good thing, no doubt. Wars were being fought on a grander scale than ever before, and made correspondingly greater ravages. It is easy to agree with Israel’s opinion that chronic hostilities, and the Thirty Years War above all, offer the likeliest explanation of the 17th-century ‘general crisis’. Recession in Europe accelerated the European drive into the other continents; if these regions had not been available to nourish the sacred flame of profit with their blood, it may be asked whether nascent capitalism might have come to an untimely end, buried under the trampling feet of the armies.
A nation of two millions could only reach the pinnacle because, apart from geographical advantages, it had a unique political and social structure. It was a republic made up of seven provinces, presided over by the House of Orange, but extremely decentralised, every town as well as province enjoying much autonomy, and even the common people having an occasional voice in affairs. Admirers of absolute monarchy, then very fashionable, never understood how so crazy a system could go with so much national strength and unity. Israel emphasises that Braudel’s conception, shared by many, of the country as no more than the ‘city state of Amsterdam’ writ large, is highly misleading: unlike Venice or Genoa, Amsterdam was ‘merely the hub of a large clustering of thriving towns’.
Complex negotiations were needed for the setting-up of the VOC, or East India Company, the first joint-stock venture based on a balancing of interests of towns and provinces, with eight of the 17 directors – the famous ‘Heren XVII’ – assigned to Amsterdam. This meant that, far more than in England then or later, the public was being drawn into the push for economic expansion. Dutch techniques and institutions pioneered modern finance, with the Amsterdam Bourse, completed in 1611, rapidly accepted as ‘a world exchange which itself became an instrument of trade control’. Money was so effectively mobilised that credit was always available, at staggeringly low rates. A Dutch entrepreneur could borrow at 3 per cent; after three centuries of progress his British compeers are paying 14 per cent.