The Golden Age Of Dutch Republic

The Golden Age of the Dutch Republic1
Oscar.Gelderblom@let.uu.nl (Utrecht University) This draft, 25 April 2008

For publication in: W. Baumol, D. Landes, and J. Mokyr, eds., History of Entrepreneurship (Princeton University Press)

Introduction The Dutch Golden Age is an icon of premodern economic growth. The revolt against Philip II and his successors in the late sixteenth and earlyseventeenth century coincided with an unprecedented economic boom and cultural flowering. Between 1580 and 1650 the Dutch became the dominant player in European trade – an achievement based on their large-scale commercial agriculture and fisheries, market-oriented manufacturing, and low-cost shipping services. Besides, a combined military and commercial effort allowed the Dutch colonial companies, VOCand WIC, to establish a dense network of trading posts in Asia, Africa, and the America’s. The Dutch Republic was a country of entrepreneurs, a society in which the livelihood of a considerable number of men and women depended on their judgmental decisions about the buying and selling of goods and services.2 These entrepreneurs included not just merchants involved in long-distance trade, butalso shipmasters,
The author would like to thank William Baumol, Joel Mokyr, Maarten Prak, and Timur Kuran for comments on earlier version of this chapter. 2 The definition of entrepreneurship follows Casson, M. C. (2003). Entrepreneurship. Oxford Encyclopaedia. of Economic History. J. Mokyr. Oxford, Oxford University Press. 2: 210-215.
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fishermen, millwrights, farmers, artisans, andshopkeepers. Except for the directors of colonial joint-stock companies and the managers of a few large farm estates and manufacturing firms – men who received a fixed reward for their judgmental decisions – the income of these entrepreneurs depended on the profits or losses they made in the market place. The origins of this entrepreneurial class predate the Golden Age by at least two centuries.Since the late fourteenth century the Dutch were involved in commercial dairy farming, the importation of bread grains, and the export of herring, beer and textiles. In the first half of the sixteenth century the commercialization of agriculture continued with the development of stockbreeding and peat digging while merchants and shipmasters in the coastal provinces established a regular trade withFlanders and Brabant, the Baltic Area, England, and the Atlantic coasts of France and Spain. In short, the entrepreneurial success of the Golden Age was to a large extent the realization of an already existing potential. Even so, important changes did occur after the independence of the United Provinces. The removal of thousands of laborers and artisans from the southern provinces in the 1580s and1590s stimulated the manufacturing of textiles, refined sugar, weaponry, paintings, books, maps, and myriad other luxury wares. The Fall of Antwerp in 1585 and the immigration of at least a fifth of its merchant community added considerably to the scale and scope of the Amsterdam market. Finally, without the independence from the Habsburg Empire, the establishment of direct trading links betweenthe Low Countries and Africa, America, and Asia would have been inconceivable.

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This chapter analyzes the contribution entrepreneurs in agriculture, industry, and trade made to the Dutch Golden Age. Were these men and women with outstanding personal qualities, either in terms of human, social, or financial capital? Or was it a favourable set of legal, political, and economic institutions– either inherited from an earlier period or copied from more advanced economies – that allowed more men and women than elsewhere in Europe to set up their private businesses, market goods and services, and manage the risks entailed by their reliance on market exchange? Or was there nothing special about either entrepreneurs or institutions, with the Dutch simply taking advantage of economic...