Geoffrey Parker's The Dutch Revolt is an excellent account of the Dutch Rebellion against Spain, and the eventual creation of two new countries - the Netherlands, and the Spanish Netherlands, the beginnings of Belgium.The traditional trade 'map of commerce' whose main artery ran from the Baltics via the Low Countries to the Bay of Biscay and the Iberian Peninsula with offshoots to Norway and the British Isles remained essentially unchanged in spite of the opening up of European colonies and the rise of transatlantic trade. This Baltic-Cadiz route remained the greatest employer of European shipping. In 1660 it was dominated by the Dutch.
The impressive Dutch trading network came to be in spite of, or perhaps because of, the Dutch Republic's 80-year-war with the Spanish. The Dutch dominance of European trade is well-illustrated by a comparison of its merchant marine to those of other European powers. In 1670 it totaled 568,000 tons. That was more than the merchant marines of France, England, Scotland, the entire Holy Roman Empire, Spain and Portugal combined.
The basis of this Dutch trading network was the huge grain surplus produced in the Baltic, primarily by Poland-Lithuania. Almost all of it was shipped to the Dutch Republic and about 80% of it was shipped in Dutch vessels. The Dutch then re-exported about 40% of it to those parts of Europe, primarily in the south, which did not produce enough food to feed their own populations. This abundance of basic food in allowed Dutch farmers to specialize and their cash crops, and the products made from them, in turn went to markets all over western and northern Europe.
More important in terms of value were the 'rich trades'; commodities (spices, sugar, silk etc.) that the Dutch gathered in Southern Europe and then sold in Northern Europe. By the 1660s this was creating seven times the profit the freight from the Baltics were creating.
What then explains this dominance? Part of it is surely technological. The Dutch created a ship known as a Fluyt which gave them a hugely competitive edge. It maximized carrying capacity and minimized cost due to standardized designs and labor-saving services adopted by shipyards in Amsterdam. An English ship of 250 tons was 60% more expensive than its Dutch rival because of this. Furthermore, the Fluyt was purely a ship of trade and had no pretensions of being a warship. This allowed a 200-ton Fluyt to be crewed by 10 men, as opposed to 30 for the comparable English ship. Through this the Dutch could undercut their rival carriers by between 33% and 50%.
Another aspect was a drive to exploit the resources available outside of Europe. By 1602 the Dutch East India company had been founded and one of "the greatest commercial undertakings in European history was underway". The Dutch wrestled pre-eminence in South-East Asia from the Portuguese and by 1660 the Portuguese were confined to Goa and Macao while the Dutch were in Cochin (India), Malacca, Indonesia, Formosa, and modern Sri Lanka. This ruthless accretion of dominance in that part of the world allowed for massively profitable goods to be shipped to Europe.
A third aspect of this dominance is financial. The Bank of Amsterdam (1609) quickly eclipsed Venice and Genoa as Europe's premier money market and was soon joined by a loan bank. The Amsterdam Stock Exchange gave Dutch merchants a head-start in managing their business affairs. Credit could be obtained as easily nowhere else in the world, the same went for insurances for goods. Indeed, these services were so good that during the Third Anglo-Dutch War the English fleet was insured at Amsterdam.
Dutch primary would continue for a long time. But by the middle of the next century there was serious decline both in relative terms as well as in absolute terms. By the end of the eighteenth century the rich trades receded and the Dutch fishing industry collapsed.
By 1650 the Dutch population became stagnant. There may have been low-growth until 1700, but the eighteenth century was most definitely marked by demographic stagnation. Dutch predominance also attracted the hostility of foreign powers. This was reinforced by common economic beliefs at the time that, simply put, held that the amount of silver and gold coinage was finite and that there one country could only prosper at the expense of the others. The English and French, with their sights set on the Dutch, implemented mercantile policies, such as the Navigation Acts and tariffs for cargo carried in foreign ships. Every time a government implemented such a policy, the Dutch suffered. Sweden, for example, passed an act which barred foreign ships from their ports except if that ship was carrying produce of its own nationality. It hurt Swedish merchants and consumers, but it hurt the Dutch more.
Direct action in the form of war was also taken by France and England. Decades of incessant warfare eventually exhausted the Republic's resources. The burden of taxation to maintain the debt accumulated and the armed forces, in particular, inflicted structural damage on the Dutch economy. High indirect taxes on consumption led to correspondingly increased wages and diminished competitiveness for producers.
The technological gap was also closed by foreign powers and the Dutch faced increasingly fierce competition because of it as well. As the rest of Europe developed their own commerce after the Thirty Years War, the Dutch entrepot was less needed. Some sectors, of course, continued to expand, but domestically there was a marked turn away from manufacturing and trade towards finance and especially loans to foreign governments. It became, in the words of Charles Wilson a 'rentier economy'. A far more passive player in Europe's economy.
Source: Tim Blanning, The Pursuit of Glory.
"Give the Dutch Ireland and they'd feed Europe."I like the Dutch. There's a sort of blunt pragmatism in them which is quite endearing. When they say they are going to do something they generally do it as well. Lot to admire in them.