Title: First Modern Economy: Success, Failure and Perseverance of the Dutch Economy 1500-1815
Author: Jan de Vries
Scope: 4 stars
Readability: 4 stars
My personal rating: 5 stars
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Topic of Book

De Vries makes the claim that the Dutch Republic was the world’s first modern economy.

My Comments

The Dutch Republic is an example of the keys to progess in action. Of all the societies of the past, the Dutch Republic is the one that I admire the most. It is extraordinary how this little country, surrounded by enemies and dominated by the largest empire of the day, made so many contributions to humanity. And how much it resembled the societies that we take for granted today. While the Industrial Revolution in Great Britain gets most of the attention, the commercial achievements of the Dutch Republic should be treated with the same level of respect.

While I believe that the city-states of Northern Italy may more justly deserve the title of “first modern economy”, De Vries claims are surely correct. Even as late as the 1880s, the rest of Northwest European, had not yet caught up to the modernity of the Dutch government, economy and society.

Key Take-aways

Some areas where the Dutch Republic more resembled modern societies than the Agrarian societies of its era:

• Very high rates of urbanization (45% vs 3% in most Agrarian societies)
• Large increases in GDP per capita. This increased wealth was broadly shared by the laboring classes.
• Very weak nobility and clergy, except in the far eastern provinces.
• Political and economic power concentrated in urban patricians rather than titled nobility in rural areas.
• Free peasantry
• Highly productive, specialized and export-oriented agriculture.
• Even rural villages had a striking variety of local goods and services.
• Economy dominated by trade, finance, transportation and industry. Each of these sectors was highly diversified and specialized.
• Agriculture made up only 40% of the jobs and a much lower percentage of the economy.
• Dramatically reduced shipping costs, due to invention of fluit (a merchant ship)
• Much higher use of energy per capita, particularly from peat, wind and water.
• High rates of skilled immigrants, particularly from modern-day Belgium
• Taxation on consumer goods rather than land taxes.
• Sophisticated stock, bonds and insurance markets.
• Nuclear families 
• Religious tolerance, at least compared to other European countries.
• High levels of literacy, reading, publishing and formal education, even in rural areas.
• Densest concentration of universities in the world.
• Much greater participation by women in public domain
• Widespread establishment of charities to support children, elderly and sick.

Important Quotes from Book

Geography:

The Rhine and Maas rivers disgorge in the northern Netherlands depositing rich river clays along the courses of their numerous distributaries.

The numerous, difficult-to-penetrate marshes and peat bogs long enforced an isolation on much of the northern Netherlands that kept it beyond the effective reach of both the Roman and Carolingian empires. But the region also possessed a potential for communication with a large area because of the presence of the rivers: the Schelde, which drains much of Flanders; the Maas, offering communication with Liege; and, most important, the Rhine, which allows navigation deep into Germany.

The northern Netherlands, as with northern Europe more generally, experienced a great age of medieval colonization, but here it was paired with the evolution of distinctive techniques and institutions. Certainly the most conspicuous mark of exceptionality was the weakness of feudalism. The farming communities of the alluvial Netherlands were only lightly touched by manorial organization and serfdom. Roughly speaking, the strength of these institutions declined as one moved from the southern Netherlands, where they were fully developed along lines common to the rest of northern Europe, to the Friesian lands of the north, where they had never taken root. The colonization process, offering peasants the possibility of establishing themselves on “new land” as free settlers, further diluted the strength of these institutions. In most communities one finds free peasants, organized in buurschappen, in control of local affairs; their autonomy was modified, but not usually eliminated, by the authority of the ruler and his local representatives.

Another characteristic of these recently settled lands is that the peat soil served both as an agricultural resource and, when cut and dried, as a source of fuel.

The special position that the production of peat held at the intersection of three important physical phenomena: the Netherlands’ unique access to low-cost energy, the reclamation of land, and the development of the transportation network.

Urbanization:

[The Dutch] demographic history revealed special characteristics and developments.

• a high level of urbanization;
• a large volume of interregional and international migration; and
• a household structure of an apparently modern type.

With the exception of North Brabant, every province was substantially urbanized. In Holland the urban percentage exceeded 60 percent, and in Utrecht it reached 50 percent. In the other provinces, it varied between 25 and 35 percent, yielding a national average of 40 percent. This level of urbanization had no equal in any other European country of the time, although the English urban population was fast moving toward it.

Nor should we forget what a bit of arithmetic reveals: outside the Randstad of 1795, there lived 1,350,000 persons, of whom some 415,000, or 30 percent, were urbanites. Thus, the Republic absent its urban heart was still the most urbanized country of Europe!

The total urbanization rate (including all cities, regardless of size) proceeds as follows:

1525                  31-32%

1675                  45%

1750                  42%

1795                  40%

1815                  38%

These data reveal, first, the high level of urbanization obtaining already at the beginning of the sixteenth century; second, the great intensification of urbanization in the following 150 years; and third, the gradual deurbanization that persisted for the 140 years following 1675.

For a territory of this size, containing nearly one million inhabitants, an urbanization rate of 31-32 percent (rising to 45 percent in Holland) was highly unusual. It can be compared only with Venice and its Terrafirma, the Southern Netherlands, and, perhaps, Andalusia in southernmost Spain. But in contrast to these other highly urbanized zones of the early sixteenth century, the Northern Netherlands were no great focal point of international trade and industrial production. There were as yet no cities of great size such as Venice, Seville, Antwerp, and Ghent. To account for the strikingly high level of urbanization in the Northern Netherlands, we can point to its role in shipping and regional trade, to be sure, but even more to its intensive cultivation of a wide variety of small-scale nonagrarian activities.

Not until the Industrial Revolution would a third wave of urbanization, this time in England, replace the Republic’s achievement with a new standard, as England’s population moved from 20 percent urban in 1800 to 40 percent (in cities of at least 10,000) in 1850. Nearly a century later, a fourth, and probably final, wave of urbanization, this time in Germany’s Rhine-Ruhr region, would surpass the English level. Four great waves of urbanization have taken place in northwestern Europe in the course of our era’s second millennium. It is striking that (1) in each successive case the “saturation point” of urbanization reached a higher level than before; (2) the chief period of urban advance came to be briefer and more intense; and (3) the peak of urbanization was always followed by an unmistakable retrenchment.

From all this only one conclusion is possible: The urbanization of Holland continued until the 1670s; thereafter, most cities suffered a sharp reduction of population, a reduction which various sources confirm was all but complete by the mid-eighteenth century. Yet this decline of urban population did not lead to true deurbanization since it was paced, more or less, by a decline of Holland’s rural population. Indeed, these two developments were intimately connected, for Holland’s rural decline was greatest where rural nonagricultural employments were concentrated (in fishing, seafaring, and industry). Thus, instead of the cities suffering while the countryside flourishes (a common occurrence elsewhere), we see in Holland between 1650 and 1750 a related process of structural change, affecting both city and countryside.

Migration

With its relatively high standard of living, strong demand for labor, and religious toleration, the Republic long attracted immigrants from the rest of Europe. This well-known fact had profound implications for the Republic’s culture, for its economy, and for its demographic characteristics.

Over time, however, the German lands became the chief source of migrants.. they settled overwhelmingly in the cities of Holland, affecting the urban age structure, sex ratio, and, as already noted, the behavior of the marriage markets.

In all of Europe no less than in the Republic, large cities usually experienced an excess of deaths over births, so that the maintenance of their populations depended on in-migration. What distinguished the Republic from the rest of Europe, of course, was the very high percentage of its population resident in cities, and, hence, subject to excess mortality. In highly urbanized Holland of the late seventeenth and eighteenth centuries, these urban deficits typically exceeded the size of rural surpluses, making her cities dependent on immigration from the outer provinces and abroad.

In the first decades after 1580, the Southern Netherlands supplied the bulk of immigrants, and it is likely that much of this migration consisted of entire families. The importance of this migration to the economic development of the Republic was immense, since these migrants brought with them a wealth of commercial and technical know-how, not to mention a wealth of capital. By the early seventeenth century, this flow of migrants slowed, but it did not stop.

Through the first half of the seventeenth century, the dominant flow of migrants to Holland was from the North – from the countryside of North Holland and Friesland, the German North Sea coast, and Scandinavia. These migrants were especially prominent in everything having to do with shipbuilding and seafaring. After 1680 this migration flow diminished in both absolute and relative importance. In its place came a growing migration from the East – the eastern provinces of the Republic and the German lands beyond them. As the migration flows changed direction, so did their character. The migrants from the North were predominantly males, while females predominated among the migrants from the East. And in both cases single persons appear to have been numerically more important than families. These shifting characteristics of migration to the Republic were the joint product of developments in the demographic and economic situations in the “expulsion” regions and the changing character of the labor market in the maritime zone of the Republic.

Quantitatively far more important was the departure of men who signed on with the Dutch East India Company (the VOC). In the entire life of this company (1602-1795), nearly 975,000 persons boarded its ships to sail for Asia. About 485,000 of them eventually returned to the Netherlands.

Money and Taxes

In the course of the sixteenth and early seventeenth centuries, the northern Netherlands became a highly monetized economy.

The theoretical interest of fiscal history derives from the intimate relationship of the tax system to the development of state power. The weak states typical of subsistence agricultural economies relied on the income from domain lands, tithes, and various levies in kind. More monetized economies could bear land taxes, tariffs, and, with urbanization, excises. Ultimately, the systematic taxation of wealth and income came to characterize the fiscal system of strong states. Broadening the tax base, more systematic penetration of the economy, and unification of tax administration are basic achievements of successful, centralized states. The reason is not far to seek. Such a tax system enabled the state to command the resources necessary for the pursuit of war, which, in turn, generated further pressures for the growth of taxation. This describes a positive feedback loop of fiscal development leading to state formation leading to warfare leading to fiscal development, and so on. This loop is a staple of Early Modern European History, oriented as that history is to the “rise of the nation-state.”

Holland’s gemene middelen levied excises on the sale of wine, beer, meat, peat, salt, soap, grain (levied at the point of milling), woolen cloth, spirits, and on the use of market scales. It also levied annual charges on the possession of cattle and arable land.

The gemene middelen immediately became the cornerstone of Holland’s system of taxation.

One is tempted to add that excise taxes appealed to the governing circles because they touched the rich but lightly.

In 1790 the national per capita tax revenue of the Republic stood at the same level as that of Great Britain; in both countries the per capita tax burden was double that of France in the years immediately preceding the Revolution.

Both French and British tax revenues rose rapidly throughout the eighteenth century (between 1715 and 1789 by 50 percent in France and 65 percent in Britain.

In the Republic in 1716-20, and in fact much earlier, stood at a far higher level than in surrounding countries; it was then nearly twice as high as in Britain.

From 1672 to 1713, the Republic, hitherto so resourceful in gathering the fiscal means to defend itself and its interests, was plunged into a fiscal nightmare. As the economic environment shifted to one of contraction, with falling prices putting a squeeze on profits and discouraging investment, the Republic faced life-threatening military dangers, and its new leader, Stadholder Willem III, embarked on a political course that required vast expenditures. Holland’s tax revenues were nearly doubled… The Republic turned, as never before, to the full exploitation of its formidable public credit.

The existence of a gigantic public debt concentrated in the hands of families of great wealth, and the direct access of many of those families to political office, established the basic framework in which the “oligarchization” of political life – always implicit in the Republic’s urban institutions – became intensified. This hallmark of the “Periwig Age” was consolidated by the fiscal dynamic of the decades of war against Louis XIV’s France.

The first step in the transition to a modern form of international lending can be dated easily: 1688. The Glorious Revolution brought the Dutch Stadhouder Willem III to the English throne and set in motion constitutional changes that made England the first country to achieve a creditworthiness capable of attracting voluntary, long-term Dutch investment in its public debt and in the English joint stock companies. The key innovation, England’s “financial revolution,” consisted of the introduction of excise taxes to fund a public debt that simultaneously became the responsibility of Parliament rather than the personal obligation of the monarch. In this, England followed in Holland’s footsteps; with the establishment in 1694 of the Bank of England to manage this debt, among other things, the English took a long step further.

A second important date in the emergence of a modern capital market was 1713. Until then, foreign government loans carried guarantees from the States General. That is, foreign lending depended largely on foreign policy and had the character of subsidies to allies. In 1713 the Republic embarked upon a policy of neutrality; there was no further justification for loan guarantees.

After 1763 the Republic’s era as the capital market for all of Europe began in earnest. Several new governments applied to Amsterdam banking houses to issue bonds (Denmark, Sweden, Russia, and various German states), while the investing public became particularly receptive as a consequence of the substantial redemptions of domestic debt discussed earlier.

We have observed the growth of the Republic’s commodity trade and the elaboration of a broad range of shipping, insurance, and financing services. These functions came together at the highest level at the Amsterdam Beurs, arguably the nerve center of the entire international economy. Built in 1611, this building of arcades around a central courtyard gathered merchants and brokers who traded in literally everything known to that society. Together with the nearby Wisselbank (established in 1609) and the specialized Korenbeurs (built in 1617), Amsterdam offered the merchant an unparalleled range of business opportunities: One could trade commodities as well as financial instruments such as company shares and government bonds; one could buy sea insurance, arrange for freight, and get foreign exchange quotations…  Moreover, at Amsterdam these services were available to the international economy on a continuous basis, in contrast to their availability only at periodic fairs in the commercial centers of the sixteenth century.

Information was not free, far from it. But it was obtainable more cheaply in the Republic, and especially Amsterdam, than in other places. Just as the trading world of early modern Europe tended to concentrate commodity flows at a single entrepot in order to reduce costs and dampen supply irregularities, so was the process of information gathering concentrated. In the pre-telegraphic world, the dissemination of information took time, and news could not reach all places at the same moment. The single location that received the most fresh news from the largest number of separate locations enjoyed a major advantage over its competitors, one that powerfully reinforced the concentration of trade (and laid the basis for the rise of the financial sector). The natural geographical advantage of the Republic was reinforced by intelligence networks of merchants, further strengthened by the commercial institutions and, finally, solidified by the Republic’s toleration of religious minorities (with their intelligence networks) and uncensored publishing.

Absence of Feudal Relations

The absence of firmly anchored feudal relations meant, in the first place, the absence of a society of orders, where each member held a legally fixed position assigned by birth. In a society where the traditional orders did not exist as judicial categories, or existed only in a weak form, barriers against social mobility rooted in the legal system and its power relationships were absent as well. Elsewhere such barriers lingered for centuries and persisted even longer in the mental habits of society.

What ties these phenomena together is their appearance to us as early expressions of something with which we are familiar: an open, bourgeois society. This “proto-modernity” was directly related to the high level of urbanization that had been attained already in the late Middle Ages and to the high degree of geographical — and an incipient social — mobility.

We called attention to the existence, or emergence, of a free peasantry. In contrast to most of the rest of Europe, the peasants here possessed full personal freedom and faced no institutional limitations in the conduct of their occupations. Apart from the communal institutions erected to manage the struggle against the water, no communal obligations – emanating from manor lord or village collectivity – limited the farmers in the individual management of their properties. We do not exaggerate much in asserting that the only factors they had to take into account were nature and the market. And these two forces directed agriculture, ultimately, toward a concentration on livestock and dependence on a monetized economy. Freedom, individualism, and market orientation characterized this agrarian society long before the end of the Middle Ages.

Family life in the Republic is another area in which relatively modern characteristics present themselves…we are already dealing with a family structure that conforms better than any other in Europe to the features associated with the modern nuclear family. The predominance of the nuclear family, a household shorn of a coresident older generation or coresident siblings and other relations of the married couple.

We can summarize this all with the double claim that within society the (nuclear) family held a substantially autonomous place, and within the family the individuals maintained positions of relative equality. Independence and individuality predominated.

In Holland and Zeeland, the cities achieved unchallenged supremacy in the political decisionmaking structure, and together with their enhanced influence in the other provinces, the cities of the Republic became not only a major factor in the social and

political regime – they became the dominant center of political power, a fact that could not fail to have important consequences for the character of the entire society. It resulted in a transformation of political representation in the provincial states from one where before the Revolt the cities had to share power with the nobles and (usually) the clergy, to a situation in which the Revolt had removed the clergy from formal political power and the nobles (many of whom remained loyal to Crown and Church) had lost much of their influence.

Religion and Education

The Reformed Church saw education as an integral part of its project of confessionalization and took up with great energy the extension of elementary education to every nook and cranny of the country. The first synod of Dordt, in 1574, urged the establishment of schools in every village…This policy seems to have had the desired effect, for around 1800 this most rural of Dutch provinces had the highest literacy rates in the nation, as measured

by the ability of men and women to sign their marriage certificates: 86 percent of grooms and 75 percent of brides.

By the late seventeenth century, no other country of Europe could claim such a density of institutions of higher education. Not all of these institutions flourished, but together they educated a large number of students. The incomplete figures suggest that about 25 of every 1,000 young men who attained age eighteen attended university in the seventeenth century.

Fishing Industry

The development of the herring buss, a veritable factory ship on which the herring were not only caught but processed on board, is undoubtedly one of the seminal innovations of the fifteenth century, and it played a leading role in the economic rise of the new Republic at the end of the sixteenth century.

The essential breakthrough was the development of a technique to preserve the quality of the herring by quickly gutting and salting the fish while at sea. To both catch and process the fish on board, and to remain at sea for five to eight weeks at a time, required a second innovation: the herring buss, a large vessel which, by the mid-sixteenth century, carried a crew of eighteen to thirty men. In comparison to the other types of fishing vessels of the time, this was a floating factory, and it is not difficult to understand how a fleet of 400 to 500 of these gigantic fishing vessels – was this the world’s first great fishing fleet? – captured the imagination of contemporaries.

The final innovation in the herring fishery occurred as a response to the development, also toward the end of the sixteenth century, of the fluitschip, an economical, specialized cargo carrier. The herring buss could then no longer compete as a freight carrier outside the fishing season, which loosened and finally broke the connection between fishing and shipping that had long characterized the industry.

Industry

The crafts and industrial sector formed, certainly in the cities, the Republic’s single most important source of employment.

Among the important processing industries, known in the Republic as trafieken, were: salt refining, sugar refining, lumber sawing, and distilling. Alongside these trafieken were industries that received their raw materials from both domestic and foreign sources.

Beginning in 1582 migrants from southern Flanders and from Artois began to move directly to Leiden, and with their arrival the center of light cloth production was relocated, setting in motion the emergence of Leiden as the most important industrial center of Europe.

Shipping

With the encouragement and, most probably, the financial support of a regent and merchant of Hoorn, Pieter Jansz. Liorne, a ship design took shape that featured a great lengthening of the existing types. Its hull was given a pronounced tumbledown form and a pearshaped stern. Its three masts were rigged with small, easily handled square sails. The advantages of this new design quickly became apparent: enlarged carrying capacity, enhanced stability at sea due to its low center of gravity, a smaller crew in relation to payload, and, as a direct consequence of the steep stem and stern, an improved ability to tack against the wind. Above all, this new vessel – the fluitschip — sailed faster than its predecessors: Instead of two trips to the Baltic per season, a skipper could now make three, perhaps four, round trips. This combination of advantages constituted a technological breakthrough of the greatest importance. In the following century, the fluit reigned supreme in both the Dutch merchant marine and in its shipbuilding industry.

Thanks to the fluit, Holland functioned throughout the seventeenth century as the ship wharf of Europe…. At the time of its greatest extent in the second and third quarters of the seventeenth century, the combined naval, merchant, and fishing fleets may well have attained a total volume of 450,000 to 550,000 tons.

The fluitschip dominated the seagoing vessels, accounting for some 80 percent of all those built in the seventeenth century and 70 percent in the following century. These vessels tended to become larger over time: Ships of under 100 feet in length dominated before 1650, while those of 100 to 150 feet became dominant after that date.

From these inauspicious origins, the Dutch shipbuilding industry developed, in the century and a half following 1460, into the largest and most technically advanced in Europe. Through the export of ships, the industry became a major economic factor in its own right, but, of course, its chief importance lay in the advantage conferred by this premier capital-goods industry upon Dutch shipping and commerce.

Sawmilling

The economy of the Republic became very wood-intensive, and this gave rise to a large and growing demand for sawed timber.

Looking back at the economic complex of timber trade, mechanized sawing, and shipbuilding, we can see how the technological innovations of the 1590s — the fiuitschip and wind-powered sawing — established the conditions for a long era of increased production. Both domestic and foreign demand for wood and ships grew enormously.

Paper milling and Publishing

Of even greater significance was the introduction of the so-called “Hollander,” a pulping process that produced amuch finer and more even distribution of the fibers. This innovation, introduced in 1674, allowed the wind-driven mills to produce white paper, the standard for writing and printing. The “Hollander” stands as the most important innovation in paper making between the Middle Ages and the nineteenth-century introduction

of mechanized paper forming. It accounts for the rapid expansion of the Zaan region’s white paper-producing capacity.

The extension of the reading public must also have increased the number and

variety of published works. Moreover, the Republic functioned as a major exporter

of books to the rest of Europe. And then there was the emergence of newspapers and scientific and cultural publications.

Amsterdam, Leiden, and in the eighteenth century also The Hague were publishing centers of international importance.

Industry and Energy

Often of decisive importance for the emergence of industry was access to what for the standards of the time was a sublime transport infrastructure. The natural waterways that criss-crossed especially the north and west made available both a raw material – water – essential to no small number of industries (beer, paper, salt, sugar, textiles) and low-cost access to other inputs and to markets. The cheap distribution of energy (peat and later coal) for home and industrial use is a key fact in accounting for the high level of urbanization already attained in the fifteenth century.

And in the seventeenth century, numerous export-oriented industries (bricks, tile and ceramics, pipes, beer, spirits, sugar, salt, soap, whale oil, glass – the list is a long one) shared a pronounced energy intensivity, which suggest their common debt to the Republic’s uniquely low-cost energy supplies. It appears that energy use in the Republic, both household and industrial, stood far above the levels common to the rest of Europe until the end of the eighteenth century.

Nearly all the rest of Europe depended on wood for heating, which resulted in deforestation and typically costly transportation over long distances. A concentration of energy-intensive industries such as arose in Holland was simply not possible elsewhere before the eighteenth century. And to this special advantage, we must add the extraordinary supply of kinetic energy produced by windmills at a time when elsewhere only water power was in general use. Moreover, windmills could be located with considerable flexibility at the same places that enjoyed access to abundant heat energy and cheap transportation; watermills, in contrast, were generally constrained by geography to locations of fast-moving water where no alternative to costly overland transportation existed.

Trade Policy of other Great Powers

During the first half of the seventeenth century, the Republic had been the conspicuous beneficiary of the unrest and internal difficulties that preoccupied the surrounding states… As long as domestic religious and social conflicts kept France tied up in knots, the large French market lay relatively open to Dutch merchants. The English also had their hands full at home, as domestic tensions prevented the state from pursuing a consistent commercial policy. Once both England and France had secured domestic political stability, it could not be long before they turned their attention to reducing the economic preponderance of the Republic in their economies. Their eventual success in achieving this objective inevitably induced other states, such as Prussia, Sweden, and Denmark, to follow suit.

The Republic was apparently the only region that escaped the erosion of purchasing power that was general to Europe in the period 1580-1650. The “middling sort” accounted then for a growing demand, as both their numbers and their incomes grew.

Thus, the protectionist trade policies of the century after 1650 unavoidably hit the Republic harder than any countermeasures could affect England or France. This led to the Republic’s assumption of a defensive posture after its great expansion earlier in the seventeenth century, while the other economic powers could only gain. Inevitably, this structural situation had its effect on the Republic’s entrepreneurial climate.

Art

This connection of style to “industrial” production can most readily be grasped by a consideration of Dutch paintings. The celebrated works of the seventeenth century painters are immediately recognizable because of their fascinating depictions of everyday bourgeois life, the material world, the prosaic.

The great majority of them earned their (generally modest) living not from the patronage of princes and bishops but from the sale of their products on the market. Dutch artists constituted a true industry, producing tens of thousands of paintings per year, many intended for specific export markets, and nearly all of them catering to the tastes of a broad middle-class public.

As the number of painters rose – from no more than 100 around 1590 to a peak of 700 to 800 masters in the 1650s – they (re)established their guilds, formalized apprenticeship practices, and pursued a far-reaching specialization.

This celebrated artistic phenomenon, which flourished thoughout the first half of the seventeenth century, faded from the scene with startling speed in the 1660s and ’70s as the art market collapsed .

This collapse in demand had an economic source, to be sure, but it also went hand in hand with a transformation in taste and style, one that had its (perhaps less dramatic) effects on a broad range of other products. From the late seventeenth century on, a new cultural style gained ground associated with aristocracy and featuring classical and rococo forms, idealizing gallantry and refinement, and eventually giving birth to Enlightenment culture.

City and Country

Two developments conspired to strengthen the political position of the cities in most provinces in the period that bridges the medieval and early modern eras. The triumph of the Reformation eliminated the clergy as an autonomous center of political power, leaving only the burgers (i.e., the cities) and the nobles to occupy the offices of state. Of these two surviving orders, the nobility had been severely weakened, and in many cases impoverished, by the extended social and internal political conflicts that had filled most of the fifteenth century. The Reformation only exacerbated the problems of this beleaguered order, since it forced its members once again to declare their allegiance, now pro or contra Philip II and the Catholic Church. Many nobles found it impossible, whether for social or spiritual reasons, to renounce their allegiance to the old order and were automatically excluded from the political system when the new Republican order triumphed.

In Holland the cities dominated totally. After the Revolt they controlled eighteen votes while the nobility held only one. The political dominance of the cities was not everywhere as strong as in Holland and Zeeland, of course, and especially in Overijssel and Gelderland the nobility always remained an important social force, wielding a political power to be reckoned with. But even there, the cities weighed in more heavily than any other political force. The only real exceptions to the rule of urban dominance existed in Drenthe, a territory with no political influence, and Friesland.

Research carried out over the years… has repeatedly uncovered a surprising modernity in rural society, as measured by the phenomena of occupational differentiation and density of specialized occupations in rural areas. Put differently, the distances that rural consumers had to travel to be supplied with particular goods and services was often strikingly short.

The Republic’s countryside possessed, with certain regional exceptions, an abundant and evenly distributed supply of carpenters, tailors, shoemakers, tavern- and innkeepers, skippers and/or teamsters, bakers, and blacksmiths. These constituted the basic specialist occupations, supplying goods and services in close proximity to the villagers. To these can be added the occupations of cooper and doctor/surgeon.

Through a combination of evidence and inference, we can render plausible the claim that the Republic already by the 1670s had attained an occupational structure and infrastructure of local provisioning that was precociously modern, one where agriculture absorbed no more – and probably less – than 40 percent of the labor force. Industry and crafts, which together accounted for some 32 percent, was not far behind, while the trade and transport sector gave employment to one of every six participants in the labor force. The remaining one-tenth of the labor force found employment in other occupations, which included services and the full range of liberal professions, such as doctors, surgeons, notaries, lawyers, and also clergymen, schoolmasters, government officials, and rentiers.

Germany seems to attain only after 1880 the occupational structure reached by the Netherlands 100 years earlier – indeed, most likely 200 years earlier. France in 1880 had also attained this early Dutch standard, while Denmark, with half its labor force still in agriculture, still had some way to go. On the European continent around 1880, only Belgium had moved decisively beyond the occupational distribution of the eighteenth-century Republic.

To summarize, the territory of the modern Netherlands possessed in the period 1650-1850 a differentiated occupational structure far in advance of the rest of Europe. By the late eighteenth century, only England had attained (later to surpass) this level, to be followed during the first half of nineteenth century by Belgium.

Nobility and Land Ownership

To begin with we must be aware of the small size of the nobility as a group. Already at the beginning of the sixteenth century, the old hereditary nobility of Holland did not form as much as half of 1 percent of the population. And even this small share melted away in later decades. This happened in part because of the departure of families that remained Catholic and whose properties lay chiefly in the Southern Netherlands, such as Egmond, Arenberg, and Ligne; but the chief cause was the extinction of lineages in a group that withdrew into itself and to which no new blood and new names were introduced. Nowhere in the Republic did the provincial States exercise their sovereign right to create new nobles.

In the first half of the sixteenth century, nobles owned something between 5 and 10 percent of Holland’s land, ranking them as a group no higher than fourth, after the farmers themselves (with perhaps 40 to 50 percent), the town burgers (20 to 30 percent), and the various religious institutions.

In this connection we must recall that in much of the Republic’s territory, serfdom had come to an end – if it had ever existed – well before the end of the Middle Ages. By the sixteenth century, it played no role in Holland, nor in Friesland and Groningen. The remains of the feudal system did linger on in the Veluwe and in the eastern parts of Gelderland and Overijssel.

Salland’s pattern is known for 1751, and when it is compared with the situation of 1520, a striking diminution of the relative position of both the nobles and the Church is revealed. Peasant proprietorship, on the other hand, had doubled. Much of this increased peasant landownership was the product of reclamation of wastes, which formed the nuclei of new farms. To this they added over time the lands of religious institutions, which were periodically put up for sale.

Urban Occupations

In every quarter of the seventeenth century, occupations best described as “industrial and craft production” dominated the city economy: 1601-25, 61 percent; 1626-50, 49 percent; 1651-75, 53 percent; 1676-1700, 54 percent… Textile production always claimed over a quarter of newly married men active in the industrial sector; clothing, woodworking, and construction followed, in competition for second place, and these three were always closely followed by the leather trades. Behind all these we find metalworking and food, drink, and tobacco processing. Far behind all these came shipbuilding. Together, these eight specializations always accounted for 83 to 94 percent of all grooms active in some form of industrial or craft production.

Patrician class

The political turmoil that began in the late fifteenth century, and culminated a century later with the Revolt, so transformed the Dutch social elites that few patrician families of 1600 could honestly claim a medieval pedigree.

After the Revolt, new governing boards and colleges took shape to deal with everything from fisheries to banking, from marriage certificates to the VOC. All these public bodies needed to be staffed and led, and they all, new and old functions alike, tended to require ever more attention. Participation in the governance of a city became a more time-consuming activity in the century after the Revolt, in many cases a full-time job.

the field of governance.

Entry to the patriciate tended more and more to require the abandonment of active involvement in private economic life. Consequently, one could not seriously consider such work, let alone be considered an eligible candidate, without possessing substantial real property and/or financial wealth. Such assets came to form the economic foundation for patrician families, but this foundation was renewed and strengthened by the handsome salaries attached to many of the offices to which they could hope to be appointed. Indeed, as economic conditions worsened after the third quarter of the seventeenth century, these offices with their secure incomes became enviable possessions.

Under the stadhoudership of Maurits’ successor, Frederik Hendrik (1625-47), it was already customary for urban patricians to groom their scions for public life by sending them to the university, followed often by the culturally

refining experience of extended travel through France and Italy – the Grand Tour. Wives and daughters began to dress more opulently, with costlier adornment, and we see the origins of such elite status symbols as the country house with its formal gardens, and the elegant carriage with its team of horses.

In these years the financial and social advantages of participation in town government became fully evident. Just as with the nobles, the economic reversals of the decades after 1660 encouraged the patriciate to tighten its grip on income-generating public offices. By the early eighteenth century, little remained left to chance – or to merit. Elaborate written agreements among the regental families established formulas intended to govern, sometimes for decades, the distribution of offices and the appointment of new members to the vroedschap.

The Republic’s political structure was such that a small-city regent possessed career possibilities much more lucrative than those open to a small-city merchant.

The holders of high public office received, on average, the highest incomes of any group in Holland.

The converse is also true: Persons of wealth (and persons who aspired to wealth) found it expedient to fashion close ties with the government. Once rich, the chance was very great that a family sooner or later would find itself entangled with the patriciate and, in time, be admitted to its ranks. And once that step was taken, the family’s active participation in economic life would inevitably diminish.

If you would like to learn more about the role the Dutch Republic played in creating progress, read my book From Poverty to Progress.