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Dutch Golden Age

Period of Dutch history from 1588 to 1672

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Leo Belgicus, 440 X 545 mm, H.A.M. van der Heijden, 3.3; Schilder VI, Map 50.3
Claes Janszoon Visscher II / Joannes van Doetecum I · Public domain

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Through Freight transport, Stock exchange and Joint-stock company

During this period, the Dutch Republic became one of the leading commercial and maritime powers in Europe. With a large merchant fleet and a strong presence in international trade, particularly through Amsterdam, the Republic played an important role in major shipping routes and in the development of modern financial practices, particularly stock exchange trading, joint-stock companies, and public debt markets. Institutions such as the Dutch East India Company helped expand its reach in global commerce. The prosperity of several cities, relatively high income levels, and an active cultural and scientific life made the Dutch Republic an important economic center in the seventeenth century.

Dutch culture flourished during this period as well. However, by the end of the 17th century, conflicts with neighbouring powers as well as declining economic influence led to the end of this period. The process by which the Dutch Republic became one of the foremost maritime and economic powers of the world during the era has been referred to as the "Dutch Miracle" by historian K. W. Swart. The term "Dutch Golden Age" has been controversial in the 21st century due to the extensive Dutch involvement in slavery and colonialism during the period, and it has been deprecated by several museums in the Netherlands, including the Amsterdam Museum.

Background

In 1568, the Seven Provinces that later signed the Union of Utrecht (Dutch: Unie van Utrecht) started a rebellion against Philip II of Spain that led to the Eighty Years' War. Before the Low Countries could be completely reconquered, a war between England and Spain, the Anglo-Spanish War of 1585–1604, broke out. English intervention forced Spanish troops to halt their advances and left them in control of the important trading cities of Bruges and Ghent, but without control of Antwerp, which was then arguably the most important port in the world. Antwerp fell on 17 August 1585, after a siege, and the division between the Northern and Southern Netherlands (the latter mostly modern Belgium) was established.

The United Provinces (roughly today's Netherlands) fought on until the Twelve Years' Truce, which did not end the hostilities. The Peace of Westphalia in 1648, which ended the Eighty Years' War between the Dutch Republic and Spain, and the Thirty Years' War between other European powers, brought the Dutch Republic formal recognition and independence from the Spanish crown.

Migration of skilled workers to the Dutch Republic

Protestants were especially well-represented among the skilled craftsmen and rich merchants of the port cities of Bruges, Ghent, and Antwerp. Under the terms of the surrender of Antwerp in 1585, the Protestant population (if unwilling to reconvert) were given four years to settle their affairs before leaving the city and Habsburg territory. Similar arrangements were made in other places.

More Protestants moved to the north between 1585 and 1630 than Catholics moved in the other direction, although there were also many of these. Many of those moving north settled in Amsterdam, transforming what was a small harbor into one of the most important ports and commercial centres in the world by 1630.

In addition to the mass migration of Protestant natives from the southern Netherlands to the northern Netherlands, there were also influxes of non-native refugees who had previously fled from religious persecution, particularly Sephardi Jews from Portugal and Spain, and later Protestants from France. The Pilgrim Fathers also spent time there before their voyage to the New World.

Protestant work ethic

Economists Ronald Findlay and Kevin H. O'Rourke attribute part of the Dutch ascendancy to its Protestant work ethic based on Calvinism, which promoted thrift and education. This contributed to "the lowest interest rates and the highest literacy rates in Europe. The abundance of capital made it possible to maintain an impressive stock of wealth, embodied not only in the large fleet but in the plentiful stocks of an array of commodities that were used to stabilize prices and take advantage of profit opportunities."

Cheap energy sources

Several other factors also contributed to the flowering of trade, industry, the arts and the sciences in the Netherlands during this time. A necessary condition was a supply of cheap energy from windmills and from peat, easily transported by canal to the cities. The invention of the wind powered sawmill enabled the construction of a massive fleet of ships for worldwide trading and for military defense of the republic's economic interests.

Corporate finance

In the 17th century, the Dutch – traditionally able seafarers and keen mapmakers – began to trade with the Far East, and as the century wore on, they gained an increasingly dominant position in world trade, a position previously occupied by the Portuguese and Spanish. The maps used by Fernando Álvarez de Toledo, 3rd Duke of Alba to attack Dutch cities were made by Dutch mapmakers.

In 1602, the Dutch East India Company (VOC) was founded. It was one of the first-ever multinational corporations, financed by shares that established the Amsterdam Stock Exchange. The company received a Dutch monopoly on Asian trade, which it would keep for two centuries, and it became the largest commercial enterprise of the 17th-century world. Spices were imported in bulk and brought huge profits due to the efforts and risks involved and to demand. This is remembered to this day in the Dutch word peperduur, (as expensive as pepper) meaning something is very expensive, reflecting the prices of spices at the time. To finance the growing trade within the region, the Bank of Amsterdam was established in 1609, the precursor to, if not the first true central bank.

Although the trade with the Far East was the more famous of the VOC's exploits, the main source of wealth for the Republic was, in fact, its trade with the Baltic states and Poland (then the Polish–Lithuanian Commonwealth). Called the "Mothertrade" (Dutch: Moedernegotie), the Dutch imported enormous amounts of bulk resources like grain and wood, stockpiling them in Amsterdam so Holland would never lack for basic goods, as well as being able to sell them on for profit. This meant that, unlike their main rivals, the Republic would not face the dire repercussions of a bad harvest and the starvation it accompanied, instead profiting when this happened in other states (bad harvests were commonplace in France and England in the 17th century, which also contributed to the Republic's success in that time).

Geography

According to Ronald Findlay and Kevin H. O'Rourke, geography favored the Dutch Republic, contributing to its wealth. They write, "The foundations were laid by taking advantage of location, midway between the Bay of Biscay and the Baltic. Seville and Lisbon and the Baltic ports were too far apart for direct trade between the two terminal points, enabling the Dutch to provide profitable intermediation, carrying salt, wine, cloth and later silver, spices, and colonial products eastward while bringing Baltic grains, fish, and naval stores to the west. The Dutch share of European shipping tonnage was enormous, well over half during most of the period of their ascendancy."

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