THE RISE OF HOLLAND
Holland seems to rise from nowhere onto the political and economic frontiers of the sixteenth century as a front runner. Carlo Cipolla explains the “dutch miracle” by saying that the dutch were always highly developed.
The Netherlands known colloquially as Holland refer to the Northern low countires along the western coast of Europe. In the middle ages the Netherlands was a small inconsequential country; particularly bleak hn compared to its neighbours on the rhine estuary. Till the middle ages it remained part of the hanseatic league. From the beginning of the middle ages however as its power grew it broke away from the league which had been trying to exclude them from the Baltic after an obstinate struggle.the dutch ensured their contact with the Baltic thus sealing the supply of essential wheat and timber from this reigon.
The dutch as Cipolla points out were well aware of the fact that their livelihood depended on the dominaition of the seas since the country itself was small and its low lying half-submerged territory was useful only for a precious little production.
Thus it was essential that the dutch establish themselves as a major maritime power.
The second half of the sixteenth century saw the collapse of the southern lower provinces. With the revolt against spain came war which ruined the southern provinces. The fulling mills of Ninove and Ath were reduced tho ashes. BY 1584 Antwerp which was a rising commercial power of the time was savagely sacked. The dutch who were till now master of the sea barring interference from the southern states suddenly found that the ruin of these provinces gave them a free hand for the commercial penetration of the southern seas and oceans.
After the peace of 1609 the Northern united provinces emerged with political independence and religious freedom. And startlingly the economy of the new state was thriving.
Herbert heaton, Cipolla, Huberman and braudel try to understand the reasons for this burgeoning position.
Cipolla emphasises the role of migration. Spanish intolerance drove valuable “human capital” out pf the country and the ever industrious dutch were more than willing to accept the skilled labour coming their way. The Walloons- fugitives from the southern provinces migrated to the northern countries. By the seventeenth century the Walloons were one of the most powerful groups of shareholders within the Dutch East India Company. Cipolla also emphasises the vigour and dynamism of the dutch populaiton
Both heaton and cipolla emphasise the role of maritime trade in the expansion of Holland.
The first step in the direction of establishment of maritime trade was the extension of the herring fishery. They developed new and larger boats known as busses that carried more sailor and cargo and also developed a new and more palatable method of curing the fish. The herring fisheries were called the dutch gold mines. The second step was extension of coastal trade to Scandanavia and the Baltic islands. Each blow to the Hanseatic states was an advantage for the dutch as the Norwegians and Swedes did not have the stature to step into Hanseatic shoes. The dutch gained the lion’s share of Baltic trade and also gained Norway which was an important catch as the vast timbre resources and coastline helped develop and house the dutch merchant fleet. Thus the raw materials were bought in bulk with cash at very low rates. Contruction of vessels saw standardization of design and possibly even the beginnings of assembly line. Typical vessels were busses or fluitschips(flyboats). The builer was ableto borrow money at a much lower rate than his foreign rivals.
Shipbuilding became the dutch export trade- it exported ships to in 1600 to the venetians, built the ships for the dutch east india trading company and supplied mercchantmen for the Spanish colonial fleet. Dutch shipbuilding drew the monarchs of Europe including peter the great and Colbert of france who tempted dutch shipbuilders into their wn countries.
The dutch ships in addition to being easily built were also easily handled and needed a smaller crew- only half the sailors on an English or a French ship Moreover the wide reach of dutch trade allowed supplies to be purchased where they were the cheapest and also ensured the startlingly economical dutch freight rates. The fourth step thus was the creation of sea-carrying traffic that ranged from Archangel in the arctic to Aleppo and Smyrna in the east Mediterranean. Holland’s position in the continent supplemented her centrality on the sea-routes- she was able to draw in by river or road the Belgian and german produce from the rhine valley. The dutch could maneuver their ships as far upstream as cologne and sold there or sent further up to Leipzig and Frankfort. Dutchmen often deducted commission on the freights they sold for foreign merchants. But they usually preferred imports,particularly imports that had to be polished before the final sale. Thus a large numer of goods went trhough Holland before they were finally sold.
The dutch emphasis on shipbuilding eventually resulted as Heaton describes in the development of colonial expanision. They searched for routes from the northeast and northwest to the orient. In 1595 they rounded the cape of good hope and between 1595 and 1601 they had atleast fifteen fleets set out. In 1602 the dutch government formed a trading conglomerate consisting of these incipient trading companies called the dutch east india trading company. This company was given absolute freedomby the government to do whatever it wanted to including wage wars and found colonies. They conquered the colonieswith a mixture oftradeand war and then checked the simultaenoues English expansion and also took steps to destroy the portugese dominance in this region. By 1680 the dutch had made the trade reserves of the malay archipegallo their own preserve, they even held Ceylon,points on the coast of India,the Persian gulf and the red sea. The company exploited its monopoly in east india to the full and ensured the maintainence of ehigh European spice prices. The ships called at Mauritius and cape town – two way stations which had been settled to provide fresh food . The company solditsmonopolized items such as nutmeg,clove and cinnamon at high rates,ensuring they did not sell beyond their capacity and tipping excess freight into the sea if necessary .
The dutch hold on north America was very weak and there was minimal colonisation- they had trading position New Amsterdam(New York) and Fort Orange(Albany) primarily for the fur trade. Despite their later annexation of Swedish colonies of new jersey and Delaware and later possession of new England ,their holdremained weak and wasbrokedn easily by the English in 1664.
Dutch control in this region wasa better and when the second war against spain broke out in this region , the west India company was formed tomerge all groups interested in trans-atlantic trade. The dutch succeeded in capturing merchantships and annexing most of brazil as well asimportant trading islands such as curacoa. The dutch offered to finance the plantations and then carry the produce back home. Neither the English nor the Spanish were able tokeep up with the strong dutch hold on the island economy of the region. However its profits apart from the war years were quite small as compared to the east india company.
In order to maintain their advantage in trade the dutch became great industrialists and bankers.
Dutch industry expanded, as explained by Cipolla through the thrust given to it by its focus on mass production and on the production of cheap goods. When the dutch could not reduce costs in any other way they reduced the quantity of the product.
The kinds of production included the widesclae production for the native market,the surplus on which was exported out, as well as the production at dutch entreports which included the finishing and processing of manufactured goods. The dutch owed a large part of their industrial skill to immigrants who were drawn to Holland because of its liberal religious policies. These traders specialized in a variety of trades, right from diamond cutting to bleaching and producing of silk. And centres like Amsterdam and Rotterdam after the decline of Antwerp emerged as trading nexuses for these goods. Only a very smallportion of dutch industry ran on native raw material.most raw material was imported and then manufactured in Holland. The labour power and harnessing of energy were widespread- the paper mills in Holland were the largest in Europe.
As industry grew, so did commerce and soon Amsterdam was established as a primeir commercial centre. The bank of Amsterdam founded in 1609 was modeled on the rialto bank of venice. Its business was recieing deposits and transferring money from one persons account to another’s. The bank could not give loans and thus could not make any profit and thus had to charge on its exchanges. It did not liketo watch others earning income by lending and therefore made lonas to the city government and the east india company and financed a municipal pawn shop. Its chief service remained making commercial transfers easy for its clients. Braudel emphasises the supremacy of the banking in Amsterdam. He says that the entire commodity trade of Europe was dominated by the rapid movement and credit counting.
Braudel describes the development of the stock exchange in Amsterdam. The Amsterdam stock exchange was introduced at the beginning of the seventeenth century and soon speculation began to be carried out there in a totally modern fashion. The government shares and stocks were mostly the objects of this speculation. This was not the first market of its kind,however it was the first to encompass such fluidity, publicity and freedomof speculation. Gambling for gambling’sake ensued and we see speculation such as that on tulip buds growing greatly. Betting on shares under expert hands could bring a comfortable income.Soon brokers began to play the exchanges adroitly and grow rich through sophisticated procedures. The Amsterdam stock exchange in particular had reached high levels of development in speculatin. The brokers were divided into one group who pulled the prices up and another who pulled them down thus drawing investors to speculate either way.Speculation did not require ownershipof the shares. The buyers could either buy or sell “blank” shares and then the payment was made either way depending on the net gain or loss.In fact since prices were on a long-term rise, speculation was restricted to the short term. It was on the look out formomentary fluctuation , easily provoked by some true or false report.Speculation however still had not reached its peak,which it did with the formation of the british east india company and the bank of England. The reason for the volume of speculation in Amsterdam was the presence of small scale stock holders and not just big capitalists. This was done by taking advantage of he smallscale speculator. This was made possible because there did not exist at the time any official quotation of prices and the brokers addressed themselves to the smallscale speculators who felt they did not have access to the inner sanctum of the exchange. The dutch exchange was open to the world market as is obvious from the records of brokers and speculators and was influenced moreover by this market.
Most of later European expansion and development particularly under England was simply an imitation of dutch technique.