By Glenn Stehle
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The richest eschews a vain parade of wealth
And entertains the poor with friendship and with care
…Where the farmer so rich…the sailor so beloved
The humblest servant as merry as his master
–SIMON STIJL, Rise and Flourishing of the United Netherlands (his description of the Dutch Republic in the 3rd quarter of 18th century)
Every nation has its national mythology, and the Netherlands is no exception. As Simon Schama points out, many Dutch still see “themselves frozen in the attitudes of Hals’ guild deacons and de Hooch’s interiors, a maritime community of God-fearing burghers dwelling in piety and liberty” (Simon Schama, Patriots and Liberators: Revolution in the Netherlands 1780-1813). The rub, however, is this, and again the Dutch prove no exception to the rule: national mythologies are unfailingly more fiction than fact.
The Dutch Republic was the first great capitalistic empire. But the transition from feudalism to capitalism was neither natural nor spontaneous. The blooming of capitalism would require a revolution of morals.
As Robert Heilbroner points out: “In earlier societies the integration of the individual into the life of the community is clearly seen as arising from feelings of positive affect (family ties, friendship, communal observances, etc.), or under duress of communal pressure (scorn, ostracism) or coercive authority” (Robert Heilbroner, Behind the Veil of Economics). But in a capitalistic society, Heilbroner continues, it is “the ‘necessity’ of employment, despite the contractual freedom that set it so decisively apart from the status of serf or slave,” that would become the instrument of social compulsion.
And as instruments of social compulsion go, it is not at all clear whether necessity is any less of a slave master than the whip, as Hanna Arendt observes of Great Britain, which was to become the world’s second great capitalistic empire:
For the liberation of the labourers in the initial stages of the Industrial Revolution was indeed to some extent contradictory: it had liberated them from their masters only to put them under the stronger taskmaster, their daily needs and wants, the force, in other words with which necessity drives and compels men and which is more compelling than violence.
–HANNAH ARENDT, On Revolution
If necessity was to replace the whip as the instrument of social coercion, then the old morality of Medieval Christianity would have to go, and it was the wave of Christian humanism which swept western Europe in the late 15th and early 16th centuries, followed by the Reformation, which was to provide the new morality. As Jonathan I. Israel explains in The Dutch Republic: Its Rise, Greatness, and Fall 1477-1806:
During the first half of the sixteenth century, western Europe, both Protestant and Catholic, was swept by new attitudes, and a new approach, to the problem of poor relief. There were several factors behind this change. Partly, it was a response to humanist criticism of monks and friars and the principle of unrestricted giving of alms, and charity, to beggars. Partly, it was an inherent result of the Reformation which, by sweeping away the Catholic clergy, and confiscating Church property and revenues, left a large gap in urban welfare…
Both the administration and the aims of welfare changed. Late medieval religiosity accorded a sacred value to poverty, begging, and giving alms, which the new humanist philosophy of poor relief was unwilling to share. Priority was now assigned to checking the growth of poverty, vagrancy, and idleness, so the new approach tended to be much more questioning, if not outright hostile, to begging and alms-giving.
As to the libertine, democratic and pluralistic impulses of the new Christian humanism and the early Dutch Reformation, these proved ephemeral. They rapidly gave way to the more authoritarian drumbeat of Calvinism, as Israel explains:
Doctrinally, the strength of Calvinism, which by the 1550s had eclipsed (but also absorbed) the Buceran and Zwinglian strands of the Reformation in northern Europe, sprang from its clear, systematic exposition, above all in Calvin’s great work, the Institutes, its ability to provide that stable and orderly structure, both in dogma and organization, needed to counter the fragmentation, and proliferation of theological tendencies, so characteristic of the early Netherlands Reformation.
[—-]
From the late 1550s Calvinism emerged as the strongest force in Netherlands Protestantism. With its clear doctrines and formidable structure it made it possible for Protestantism in the Low Countries to organize into a more powerful movement than had been seen previously.
The Netherlands’ rising merchant class was quick to single out and seize upon those aspects of the new Calvinist faith which served its interests. Calvinism’s muscularity challenged the old feudal order, dominated as it was by aristocratic landowners in alliance with the Catholic Church, and opened up new political vistas which the prosperous burghers were quick to exploit. Here’s how C.R. Boxer, writing in The Dutch Seaborne Empire 1600-1800, puts it:
When the States of Holland formally renounced their allegiance to King Phillip II of Spain in 1581, they also enacted a law forbidding the town councilors to consult with the representatives of the guilds (from whom they had originally sprung in the Middle Ages) or of the civic guards (as such) on any provincial matters. The regents thus took advantage of the struggle with Spain to consolidate their position as a self-perpetuating burgher-oligarchy and to exclude the ordinary citizens from any direct say in either the local or the provincial administration.
This near monopoly of political power of the rising capitalists proved devastative for the ordinary citizens. As Boxer goes on to explain, it meant that the
lot of the ordinary manual worker was hard; and the infrequency of overt unrest was due rather to the absence or weakness of the workers’ organizations than to the ‘paternal and enlightened regime of the upper-middle-class dictators’, as claimed by Professor G. J. Renier. It is true, however, that class differences in the Dutch Republic, as elsewhere, were usually accepted as an aspect of the eternal scheme of things. Moreover, the urban proletariat were unarmed, and the burgher militia or civic-guards could be relied on to obey the orders of the regents in the event of any conflict with the grauw.
[….]
Hard as were the living conditions of the industrial and agricultural workers, the life of the seafaring communities was even harder…. Despite the phenomenal growth of Dutch shipping and maritime enterprise between 1585 and 1650, there seems to have been a surplus of sailors for most of this period, and, perhaps for the next sixty or seventy years. During this time a Dutch skipper could usually count on mustering a crew despite the low wages and the spartan rations which were the general rule.
[….]
When (in 1629) some leading Amsterdam shipowners claimed, correctly enough, that during the twelve-year truce the Dutch had secured the lion’s share of the carry-trade of Europe thanks to their low freights and superior techniques, they forbore to add that this had been achieved largely by the owners economizing on the number and the rations of their crews. Other contemporaries were franker. Van Meteren, in his chronicle of 1599, observed that the North Sea herring fishery was such a hazardous and uncertain occupation that ‘neither the English nor anyone else’ would sail in it for the low wages and the poor food which the Dutch fishers accepted. Another chronicler observed a few years later that the Dutch ‘skippers…were so economical in their feeding, that they save our shipowners at least a third of the expenses in men and rations, which other nations demand in greater quantity and better quality’.
[….]
It will be apparent from the above, and from the abundant travel-literature of the 17th and 18th centuries, that the life of a Dutch sailor was apt to be nasty, brutish and short.
There would be no religious toleration in the new Dutch Republic. The “Reformed Church was now the public Church, which meant that it had the backing of the State, and civic authorities” (Israel). Religion was viewed as “an indispensable prop to the social order” and people were urged to conform to the public religion “for the sake of society and the state.” Jews and Catholics, as well as more liberal Protestants like the Anabaptists, Mennonites and Lutherans, quickly found the practice of their religion outlawed.
Armed thusly with a religion and a morality which celebrated austerity, allowing this conviction to easily be dispensed with when it came to their own behavior, and with a near-monopoly of political power, the “transition from a merchant oligarchy to a rentier oligarchy” was to be a rapid one, so much so that the sublime nationalistic cant about “a maritime community of God-fearing burghers dwelling in piety and liberty” becomes nothing short of a cruel joke upon the great Dutch unwashed.
The driving force behind Dutch capitalism, after all, was a combination of “love of gain” amongst the capitalists with the threat of unemployment and starvation for the sailors, industrial workers and agricultural workers. As Schama points out, the Dutch political and economic scene for the next two centuries would be dominated by the capitalist-oligarchs (an entrenched, hereditary “mercantile partriciate”) and the Orangists (“the nobility of the landward provinces”). The “grauw (an altogether more expressive term of abuse than rabble or canaille),” those of lower social rank, would be “deemed a negligible political quality.”
The economic consequence of these moral and political arrangements was to make the Dutch Republic very rich and powerful. That is, at least, until the rest of Europe’s rising merchant and industrial class, in the latter half of the 17th century, finally caught onto the wonders of capitalism and state mercantilism. This latter denouement proved devastating for the Dutch Republic, and its “Golden Century” quickly gave way to the “Periwig Period.” As Boxer explains, when “the protectionist measures adopted by neighbouring countries from the time of Colbert onwards effectively stimulated the consumption of their own manufactured goods at the expense of the Dutch exporters, the Dutch industrialists could not fall back on increased internal demand, nor was it possible greatly to increase their sales in the tropical dependencies.”
The Dutch Republic’s shooting star thus came tumbling back to earth just as quickly as it had blasted into the empyrean. The immediate result was the destruction of the merchant and industrial elite and the concomitant rise of the “colossal wealth of the great bankers and financiers” (Schama). The Dutch newspaper, De Borger, stated (19 October 1778) that the economic decline of the nation had reached such a pitch that it seemed as if “the body of the Commonwealth would shortly consist of little more than rentiers and beggars – the two kinds of people who are the least useful to the country.” As Schama explains:
The role of the capitalist, hitherto inextricably linked with trade through the commission business, gradually reverted to more purely banking and broking functions. Attracted by higher rates of interest than those prevailing at home, concentrations of capital detached themselves from the entrepôt and were invested in foreign loans, or lending short with a quick turnaround. Amsterdam thus became predominately – though by no means exclusively – a financial centre.
[…]
Amsterdam remained established as the cash till of Europe, to which states and princes might resort for handouts at rates of interest appropriate to their desperations…. [W]hile wealth was being unquestioningly generated in the eighteenth-century United Provinces, it was being diffused to a narrower base of population than in the century before 1680…. Like France, albeit for different reasons and in a very different fashion, the Republic was becoming simultaneously a richer and poorer nation.
[….]
More significantly, the close association of Dutch financial operations with the expansion of British power and strength was…alleged to amount to a virtual subsidy for the means of inflicting damage on Dutch shipping [or on] lucrative trade with the French and Americans.
The effect on everyone but the great bankers and financiers was economic devastation. As James Boswell wrote from Utrecht in 1764:
Most of their principal towns are sadly decayed, and instead of finding every mortal employed, you were met with multitudes of poor creatures who are starving in idleness. Utrecht is remarkably ruined. There are whole lanes of wretches who have no other subsistence than potatoes, gin and stuff which they call tea and coffee; and what is worst of all, I believe they are so habituated to this life that they would not take work if it should be offered to them … you see, then, that things are very different here from what most people in England imagine. Were Sir William Temple to revisit these Provinces, he would scarcely believe the amazing alteration which they have undergone.
Here’s how Boxer explains the Periwig Period:
The lack of initiative and enterprise in so many Dutch industries, and to some extent in Dutch agriculture, afforded a striking contrast to the state of affairs a hundred years previously, when Dutch entrepreneurs, industrialists and technicians were in the van of commercial and technical progress in the Western World….
The contemporaries who bemoaned the economic decay of the Dutch Republic in the last half – more especially in the last quarter – of the 18th century were inclined to place the principal blame on the allegedly self-satisfied and short-sighted rentiers and capitalists, who preferred to invest their money abroad rather than in fostering industry and shipping at home and thus relieving unemployment.
[….]
From being directly concerned with overseas trade in one form or another, as they had been for the most of the 17th century, some of them had not only become rentiers but rentiers who tended to invest much of their capital in foreign funds. It was confidently asserted in the House of Commons in 1737 that the Dutch held about 22.7 per cent of England’s public debt.
[….]
But whether Dutch capital was invested at home or abroad, it was lent to bankers and to brokers of commercial bills, or invested in land or in colonial West Indian mortgages, rather than in developing home industries or in fostering Dutch shipping. Amsterdam was the money-market of the Western World; but many of the regent-oligarchs were wealthy rentiers and high financiers who stood apart from the merchant class from which they had sprung.
[….]
The merchant-bankers and the wealthy rentiers might never have “had it so good’, but the condition of the poor seems to have been even worse than it was a century previously, particularly in the inland towns. Boswell’s description of Utrecht in 1763 anticipated an observation by Luzac twenty years later: ‘Nobody who has any feeling, and some love for his fatherland, can walk through the inland towns with dry eyes.’ In 1792 another eyewitness deposed: ‘Everywhere we look attentively around us we find the sad truth confirmed that the well-being of that class of people who lead a working life is steadily declining.’
And here’s how Israel describes the blissful nirvana the Dutch rentier-oligarchs lived in:
Dutch society in the eighteenth century was a society dominated by the rentier. Whether regents, nobles, descendants of mercantile families who had abandoned commerce, or heirs to money made in manufacturing but no longer involved in active business, most of the wealthy in the eighteenth century Dutch Republic were men who had no active economic role. The lived, often in great affluence, in elegant rural villas, as well as fine town houses, employing cooks, servants, coachmen, and gardeners, on the interest and dividends paid on the States of Holland bonds, obligations, colonial company shares, and deposits in foreign funds, often the Bank of England.
But dark clouds were slowly gathering on the horizon for the great bankers and financiers too. Their perverse and opportunistic brand of Calvinism, which sanctified their position in the social and economic order and gave them moral and intellectual legitimacy, slowly came under fire, as Israel explains:
Diderot, after spending six months in Holland, in 1774, wrote In his Voyages d’Italie et de Hollande (Paris, 1775) that the Dutch nation ‘est ennemi de la philosophie et de la liberté de penser en matière de religion; cependant on ne persécute personne’, adding that disbelievers in Christianity are ‘plus rares et plus haïs’ than France….
Ultimately, the principal preoccupation of the later Dutch Enlightenment was the decline of the Republic and how to achieve national regeneration.
No feature of the later Dutch Enlightenment was more typical than the profound awareness of economic decay and its effects on Dutch society. Luzac and De Pinto dedicated their largest books to this subject and it permeated every facet of Dutch writing in the period. Especially characteristic was the special emphasis given to what were deemed the moral roots of Dutch decline.
Here’s how Stephen Toulmin summed up the changing Zeitgeist: “there has since 1776 been a growing perception that…inequalities cannot be justified by appeals to ‘the Nature of Things’ or ‘the Will of God’ “ (Stephen Toulmin, Cosmopolis: The Hidden Agenda of Modernity).
Political discontent with the rentier oligarchs first became apparent in 1747-1749 with the Doelisten, “albeit in tones of stammering reservation rather than revolutionary boldness” (Schama). The nobility and commercial (now rentier) patriciate laid aside their longstanding animosities, formed an alliance and forcefully put down the popular protest by the Doelisten. “The settlement imposed by the Stadholder on the Republic equally reflected his wish to leave well alone. Instead of confronting the regencies of Amsterdam and the maritime provinces, he was content with the merest trimming in return for an acknowledgment of his authority as Captain- and Admiral-General…. Touch one perquisite, he was warned in Amsterdam, and the whole wormy edifice might crumble.” The Stadholder was “complacent in leaving the most obvious venalities in being” (Schama).
William Bentinck warned the prince or Stadholder, William IV, that his association with the rentier patriciate and autocracy was bound, in the long run, to damage his standing with the people as a whole:
The foundation of all government is the trust reposed by the people in their governors. At the present [1749] that confidence is entirely extinguished. Complaints are universal and all the complaints fall on the Prince…. The nation sees that the Prince did not make proper use of the power given to him. Those persons who almost brought down the state are still in office, they and their allies are well received by the Prince, some continue in the same improper manner as in the days of the earlier anarchy.
The prince, however, ignored these warnings.
One of the heralds of the later Dutch Enlightenment, Isaac de Pinto, “was already predicting, in the 1760s, the disaster that would ensue for Dutch society, and its elite, should the state and the VOC [United East India Company] encounter difficulties” (Israel). As Israel explains: “The Dutch civic elite of the mid-eighteenth century…held an astonishingly high proportion of their assets in paper securities. This meant, at least in Holland and Zealand, the country’s wealthy were to a high degree dependent on the state, and the VOC, for sustaining their wealth.”
And the collapse of the state was not long in coming. From 1781 to 1813 the Netherlands was wracked by revolt and revolution. The great banker and financier Henry Hope, archetypical of those who “were prepared to subvert the national interest to protect their dividend,” when the French and their Batavian republican allies entered Holland in January 1795 “packed his bags for England” (Schama). As Schama observes: “Between 1780 and 1813 the Netherlands was despoiled of its colonies, routed at sea, invaded four times (twice unsuccessfully); driven to the edge of bankruptcy; and finally forced to drain the dregs of its misfortune by becoming mere departments of the French Empire.” The unrest would continue for another 35 years. “Representative government would have to wait until the bloodless coup of 1848 before becoming finally entrenched in Dutch political institutions” and “the alliance between national sovereignty and constitutional politics first announced in the gusty rhetoric of the Batavian National Assembly was realized.”
But rising from the ashes of the Dutch phoenix was the next great global capitalistic empire, the British, which I would like to discuss in my next post. As Israel explains:
Britain was able to compensate for declining exports of manufacturers to northern Europe, through selling more in her fast-growing American colonies and tightening her grip over Ireland, Portugal, and the Portuguese Atlantic trade with Brazil, as well as India and large parts of the Caribbean. The United Provinces simply lacked the vast imperial power, large navy, and populous colonies necessary, in the new circumstances, to sustain economic growth along the lines achieved by Britain. By 1760, as the Amsterdam Sephardic Jewish economic writer Isaac de Pinto (1717-87) noted, every one of the main props of the Dutch Golden Age economy – long-distance trade, Baltic commerce, the herring and whale fisheries, and industry – had been largely ruined, the only exception being the still flourishing East India traffic. Even the Surinam trade was in terminal decline by the 1760s.
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