Stephen Kernaghan Social Studies Department B. Reed Anderson High School West Chester, PA The Transfer of Global Economic Power

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1 Stephen Kernaghan Social Studies Department B. Reed Anderson High School West Chester, PA The Transfer of Global Economic Power NEH Seminar 2009: The Dutch Republic and Britain Throughout this entire educational opportunity, I have been exposed to scholarship, academic experiences, and a dialogue that would have otherwise been unavailable. As I reflect upon the ideas that have been addressed through this seminar, I keep arriving at the theme of potential. I assert that while the Dutch dominated the world economy in the late 16 th and 17 th centuries, their economy lacked the capability to continue to evolve and grow. England, on the other hand, possessed unlimited potential in terms of economic growth, which they took full advantage of. The Dutch were never able to establish a long-term economic dominance in Europe because they were limited in their manufacturing infrastructure, natural resources, and political instability. The British possessed no such limits on their economic growth and innovation. By the beginning of the 18 th century, the Dutch economy began faltering while the English economy continued growing by leaps and bounds. Throughout the 16 th and 17 th centuries, the Dutch did everything within their power to create a powerful system of trade and economics that would transform the Dutch into the dominant world economic power until the early 18 th century. In order to create more arable land to accommodate their growing population, the Dutch used the innovative technology of the windmill to dredge swamps and lakes. The windmill also powered lumber mills, paper mills and ink presses. The Dutch also designed and produced the fluitschip which could hold more bulk cargo than any other ship its size, and outfitted their shipyards with cranes and pre-cut timbers. The Dutch allowed for a greater measure of toleration than anywhere else in Europe. This helped to attract the brightest minds of the time to the major cities of the Netherlands. They created a series of financial tools that greatly benefitted entrepreneurs, and Dutch society at large. A fair system of taxation, a functional and open stock market, and a progressive social welfare system all helped to propel the Dutch to international dominance during the 17 th century.

2 2 By the end of the 17 th century, it seemed that the Dutch had reached their ceiling in terms of economic growth. Throughout the late 16 th and 17 th centuries, the Dutch had become the world s transportation experts. They moved highly priced, highly prized goods from one continent to another and in doing so, set the prices of said goods. They were able to create inter-asian trading patterns to which they provided transportation. The Dutch lacked some fundamental political and geographic features that were necessary to evolve into an industrial economy that would come to dominate the 17 th and 18 th centuries. The most pressing issue for the Dutch was their internal political strife. The latter years of the Dutch Golden Age were marred by infighting and a lack of a central political power. The various regions and cities did not trust each other and the variety of economic and political insecurities ultimately robbed the Dutch of the chance at a comprehensive, focused economic strategy. The Netherland s geography also severely limited the Dutch s continual economic growth. De Vries states that while the Dutch were blessed with a massive amount of peat and wind, these two energy sources were not enough to project the Dutch into becoming an industrial power. Canals, a hallmark of Dutch culture and economics, also hindered the Dutch s ability to grow economically. Peat, unlike coal, could not generate the intense heat need in metallurgy and steam power; windmill, unlike steam engines, reached the upper limit of this power-generating capacity very quickly; canal, unlike railways, suffered from severe geographic limitations. 1 In Industry and Empire, Eric Hobsbawm defines a vibrant home market as one of the primary catalysts that drove England into the Industrial Revolutions. The Dutch lacked a strong home market, leaving their economy more one-dimensional than their competitors. As they began seeing trade competition from other nation in the late 1600s, the Dutch felt that they needed to take seriously risk to protect their position in world commerce. De Vries states that as a means of combating the economic encroachment of its international rivals, Dutch entrepreneurs doubled the size of the Dutch East India Company, established several Caribbean plantations, and drastically expanded the nation s whaling industry. All of these ventures proved extremely costly for the Dutch, at the exact time their competitors in England expanded. The Dutch never had a strong domestic economy, so as their global trading system began to falter, the whole economy suffered. 1 Jan De Vries, The Economy of Europe in an Age of Crisis. (London: Cambridge University Press), 94.

3 3 The field trips provided in the Netherlands improved my understanding of Dutch dominance in the 17 th century. The visit to the outdoor windmill museum seemed kitschy at first, but an up-close view of these innovative machines put the Dutch economy into context. The Dutch worked with what they were provided, and after staying in the Netherlands for three weeks I know that the Dutch were provided an ample supply of wind. The windmills were large, powerful, and seemingly precise. The Amsterdam History Museum also provided us with a better understanding of the technological innovation required to operate the complicated system of canals and dikes to keep the Dutch above water. The Mauritshuis in Den Haag was also very revealing in that much of the art work provided me with a better understanding of Dutch culture and society during its golden age. The Amsterdam Town Hall thoroughly impressed me. If nothing else in my time in the Netherlands, this building illustrates the massive amount of wealth and power the Dutch held during the 17 th century. The sandstone exterior as well as the unbelievable marble hall is magnificent by modern standards and the diagram of the night sky and the world map carved into the floor truly reflect the Netherland s dominance in world trade. As the Dutch s international power and prestige began to peak in the late 17 th century, the British rise to power began to overtake them. Both Eric Hobsbawm in Industry and Empire and Patrick O Brien in The Oxford History of the British Empire state that the British possessed an amazing geographic, political, and economic advantage over all of their European competitors. Hobsbawm asserts that British political system helped to create a dominant international economy because, [it] was prepared to subordinate all foreign policy to economic ends. 2 Hobsbawm also contends that the aggressive nature of British naval policy put many of its competitors at a major disadvantage. In comparison to the Dutch s energy policy, based on peat and wind, the British also had an abundance of coal which allowed them to construct a metallurgy production base as well as make the eventual switch from water-power to stream power, which has much better applications in a host of industries. Both O Brien and Hobsbawm also address the importance of a vibrant home market for the British economy. O Brien provides analysis on how Britain s proto-industrialization provided them with a politically unified home market. 3 This stable home market 2 Eric Hobsbawm. Industry and Empire: The Birth of the Industrial Revolution. (New York: The New Press), Patrick O Brien, Inseparable Connections: Trade, Economy, Fiscal State and the Expansion of Empire, , in The Oxford History of the British Empire Volume II, ed. PJ Marshall

4 4 provided the British with a sound economic foundation on which they built their system of economic trade upon. Hobsbawm goes as far to say that, The main advantage of the pre-industrial home market was therefore its great size and steadiness. It may not have promoted much in the way of industrial revolution, but undoubtedly promoted economic growth, and what is more, it was always available to cushion the more dynamic export industries against the sudden fluctuations and collapses which were the price they paid for their superior dynamism. 4 From this solid foundation of natural resources, a strong home market, a vast empire, and a stable and powerful central government, Britain propelled itself into the industrial revolution. The human impact of this industrial revolution was immense. Hobsbawm addresses the impact the industrial revolution had on Britain s working class in Industry and Empire. Hobsbawm describes the work of the industrialize laborer as monotonous and demeaning. He asserts that industrial labor and cities robbed the working class a sense of community, individual freedom, morals, and traditions. Hobsbawm argues that while the industrial revolution helped to increase wealth for the upper and middle class, it kept the working class in a perpetual state of poverty. This interpretation of the industrial revolution aligns itself with a Marxist view of history in that Marx believed that the Industrial Revolution and the subjugation of the proletariat had to happen because these were both critical steps towards the eventual communist revolution. Without an industrial revolution, there would be no eventually obtainment of a worker s utopia. Once you put Hobsbawm s arguments into this context, his self-proclaimed Marxism becomes apparent. While in London, the tours made available to us really illustrated the transformation that Britain went through in the 18 th and 19 th centuries. Observing the pool of the Themes River and comparing it with the paintings from the 1790s provided me with a greater understanding of the impact of commerce on the city itself. The tour of St. Katherine s Dock presented a real life example of Britain s ability to expand their role in international trade through technological innovation and investment. The Docklands museum also provided the seminar with a comprehensive look at the role of the docks throughout British history. I found the exhibit on slavery to be extremely impressive in that it took an honest look at the role of the slave trade in British culture. The exhibit didn t shy away from the dehumanizing and brutal (Oxford: Oxford University Press, 1998), Eric Hobsbawm. Industry and Empire: The Birth of the Industrial Revolution. (New York: The New Press), 25.

5 5 aspects of the trade and allowed visitors to see the monetary benefits and human costs. The tour of the Old India Office was exceptional. The beauty and artistry that is evident through the building shows the dedication that the British place on their role in India. But while the tour of the Old India Office might be the highlight of the entire London experience, I felt that the Victoria and Albert Museum had a greater impact on the focus of the seminar. I found the endless rooms filled with foreign art, antiquities, and cultural artifacts to be quite telling. If anything, this museum illustrates the broad and powerful influence the British had on the rest of the world. Besides the issue of global dominance, another issue that I have grappled with over this experience has been the inevitability of an industrial based society. De Vries arguments are extremely relevant to this particular question. Throughout The Economy of Europe in an Age of Crisis, De Vries asserts that many different aspects of European culture, society, and economic changed independently of one another. He states that agriculture drastically changed to accommodate new farming techniques and enclosure acts. He addresses the growth of proto-industry in the rural sectors of Europe as a production method. He argues that the growth of urban society changed Europe s consumerism, production methods, and agriculture. Capitalists began to shape the European economy and the middle class began to accumulate more wealth than every before. Regardless of how these changes occurred, they brought European society to the doorstep of industrialization. The new farming techniques provided the food needed to feed larger urban populations and proto-industry allowed business owners to try various means of organizing their production to maximize efficiency and profit. More importantly De Vries asserts that all of these changes did not occur as a part of a greater strategy to bring European society to an industrial revolution but in the end, it did. After carefully considering De Vries and Hobsbawm s arguments, I have concluded that as society develops towards urbanization, it also approaches an economic adjustment towards industrialization. During the 17 th Century, the Dutch dominated foreign trade. They boasted the strongest navy, an efficient and effective method to business, and a growing influence over world markets. But even as the Dutch became a powerful urban state, they could not sustain their position as the dominant European economic power. They were impeded by the politics, their geography, and their natural resources. The British, on the other hand, constructed an industrialized nation on the business and finance expertise of the Dutch, their wealth of natural resources, a stable political system, and

6 6 a vast empire. While both nations matured and developed to their capacity, the British held a much higher level of potential to grow into an industrialized nation. Bibliography Berg, Maxine. The Age of Manufactures, : Industry, Innovation and Work in Britain. London: Routledge, De Vries, Jan. The Economy of Europe in an Age of Crisis, London: Cambridge University Press, De Vries, Jan and Ad van der Woude. The Course of the Economy: A Macroeconomic Analysis and Postlude. In The First Modern Economy: Success Failure, and Perseverance of the Dutch Economy London: Cambridge University Press, Hobsbawm, Eric J. Industry and Empire: The Birth of the Industrial Revolution. New York: The New Press Israel, Jonathan I. The Dutch Republic: Its Rise, Greatness, and Fall Oxford: Oxford University Press, Wrightson, Keith. Earthly Necessities: Economic Lives in Early Modern Britain. New Haven: Yale University Press, 2000.