Revelation in the Netherlands: Why did this country fail?

Standing in the middle of the cheese market in Hoorn, the Netherlands, I looked up. The most eye-catching building is of course the weighing room on the east side. It was built in 1609. It was used for cheese trade weighing, and the beautiful gables witnessed the prosperity of the past. There is a statue on the south side, the native of Hoorn, Jane Pieterszohn Cohen, who was the governor of the Dutch East India Company in the early 17th century.

Don’t underestimate this little cheese square, don’t underestimate the small town that is now quiet and even inconspicuous. The Dutch maritime hegemony, the name of the 17th century “sea coachman”, is closely related to it.

Europe’s first modern economy

The Netherlands has a good commercial base, which is first and foremost related to the long tradition of the shipbuilding industry. In the fifteenth and sixteenth centuries, the scale and technology of the Dutch shipbuilding industry was the highest in the world. There are hundreds of shipyards in Amsterdam alone. The quality of the products is good and the fraud is low. European countries have ordered ships in the Netherlands.

The location is also critical because it is located in the Cape of Western Europe, the timber and fish of Northern Europe, the food of Central Europe, the wines of the Mediterranean, and even the fur of Russia, all of which are distributed in large seaports such as Amsterdam and Rotterdam. It can be said that goods from all over Europe continue to flow into the Netherlands and then to various European countries.

But the Netherlands can become a “coachman at sea”, the most important thing is business sense and freedom. The Dutch economic miracle runs through the 17th century and is regarded by the academic community as the first modern economy in Europe, with far-reaching implications for the world economy. In the late 17th century, Dutch GDP was more than 30% higher than the sum of the British Isles. The population of less than two million was only 40% of the UK, and the per capita GDP was huge.

The modernization of the Netherlands began with the “Nederland Revolution”, which began in the “eighty years of war” that lasted from 1568 to 1648 against the Spanish Empire.

The more important outcome of this war of independence is the formation of a new polity, the so-called “Republic of the Union.” In December 1587, the Dutch Republic with independent sovereignty appeared in the European territory. After the signing of the Westphalian Treaty of 1648, the sovereignty and independence of the Dutch Republic were fully established and the European economy was also turning.

This turning point is hard-won. The Netherlands, known for its developed business and maritime trade, is the road to a break with the old-style monopoly trade. During this period, the conflict between the Netherlands and Spain continued, and even Spain, which once dominated the world, was miserable. From 1648 to 1715, the most important enemies of the Dutch became British, and they never fell, even though they gradually declined. During this period, the Dutch had the largest fleet in the world, with trade in the Atlantic, Pacific and Indian Oceans. Under the federal system of the province, there were urban autonomy, decentralization, religious tolerance and economic freedom.

History of the Dutch East India Company

The Dutch East India Company, also known as the United East India Company (VOC), is a product of the Republic of the Union.

In 1602, the Deputy Speaker of the Provincial Assembly, Oden Barn Verte, teamed up with a group of adventurers engaged in ocean exploration and trade to form a joint East India company with a registered capital of 6.5 million guilders. It soon became the largest employee in the Netherlands. Trade entity. At the time, the East India Company set up six offices in the Netherlands, located in six cities: Amsterdam, Delft, Rotterdam, Fort Meade, Engelhausen and Hoorn.

The operation of the Dutch East India Company reflects the business acumen of the Dutch. This is a veritable joint-stock company and the world’s first joint-stock company. It relies on the national credibility to absorb and raise social funds in the form of financing of modern shares to maintain the huge capital needed for foreign trade. And in order to attract capital, the stock cutting is extremely small, and it is absolutely “beneficial.” But at the same time, in order to ensure the company’s decision-making, the 17 members of the board of directors hold the majority of the shares. In order to reflect the value of the shares, the Netherlands also created the world’s first stock exchange, giving stock liquidity and financing, which is also a pioneering work in the history of the world economy. Also because of the prosperity of Dutch business, in 1609, the Dutch founded the National Bank of Amsterdam, which is also the first national bank in Europe.

The East India Company is not only doing business, but also likes to fight. The company hired adventurers and mercenaries to defeat the Spaniards, Portuguese and British people, grabbed a lot of sites, and set up businesses in India’s east and west coasts, Japan and Taiwan.

The Dutch business has a strong mind and never lacks the awareness of dripping. They knew the importance of jurisprudence very early. In 1603, the East India Company had a battle with the Spaniards and the Dutch won. Even after the court was in court, the East India Company won the case. However, the unforgiving East India Company was inspired by this and found a famous lawyer to write a detailed legal report so that there is a law in the future litigation. After the lawyer named Grausius wrote the report, he separated one of the chapters into a book, which is known as the “Freedom of the Seas”.

By 1669, the Dutch East India Company had become the world’s richest private company, with more than 150 merchant ships, 40 warships, 50,000 employees and 10,000 mercenaries, with a dividend of 40%. As for the whole of the Netherlands, the tonnage of merchant ships surpassed the sum of major European countries such as Britain, France, Germany and Portugal in 1670.

In the development of the Dutch East India Company, the status of Jane Pittszohn Cohen, who is born and raised in the country, is particularly important. In 1619, he served as Governor of the East India Company. It is also him who established a trading system in Asia and made the business in China, Japan and North Korea. The occupation of Galle in Sri Lanka in 1640 broke the Portuguese monopoly on the cinnamon trade.

In 1799, the Dutch East India Company was dissolved. During the nearly two hundred years of operation, the Dutch East India Company sent a total of 1,722 ships overseas, and about 1 million Europeans took the 4789 voyage to Asia.

Trade, not plunder, is the key to prosperity

Before the Netherlands, the Portuguese and the Spaniards dominated the maritime hegemony. When the hegemony of the Portuguese and the Spaniards was subverted by the Netherlands, both entered the path of decline. Today, the two countries of the Iberian Peninsula are truly second-rate countries. Only the beautiful scenery and livable environment can be comforted. The economy is only in the middle reaches of Europe and ranks in the middle and lower reaches in developed countries. While the Dutch maritime hegemony has been subverted after being subverted by the British, GDP, per capita disposable income and economic health have always been world-class, and today it is still one of the most developed countries in the world.

The reason for this difference is related to the Dutch’s emphasis on business. In the Spanish business system at the time, the state was the largest merchant, and the king and nobles enjoyed the wealth of overseas trade and did not care about the business itself. But the Netherlands is different. After the opening of the Great Navigation Age, the geographical discovery will inevitably require the support of force. The looting has also made the first bucket of gold in the maritime countries. Of course, the history of the Netherlands is also bloody, such as the Dutch in the 1920s, the Dutch people through the bloody slaughter of the exclusive Banda Islands, access to the production and sale of nutmeg. But the Dutch prefer to do business compared to the plundering of the Spaniards and the Portuguese.

It is also through the business, the Dutch achieve the original accumulation, and then the original accumulation for the development of domestic industry and commerce, and then achieve a virtuous cycle of business.

The tea trade has made the Dutch earn a lot of money. You know, although the Dutch arrived in the East a century later than the Portuguese, it was the first country to import tea into Europe. In 1607, the Dutch transported tea from Indonesia to Indonesia and brought it back to the Netherlands in 1610, opening up the tea trade between Europe and China.

Throughout the 17th century, the Netherlands was the largest tea trafficker in the West. In addition to its own consumption, it is also sold to other European countries and North American colonies. Just as the medieval Venetian merchants turned the spice of the profits, the profits of Dutch tea are also quite amazing. At that time, the price of tea per pound in Amsterdam was 4 shillings and 4 pence, while in London it was as high as 2 pounds, 18 shillings and 4 pence.

In 1729, the East India Company opened up direct trade with China. In today’s words, it means “no middlemen make a difference”. Tea purchased in Guangzhou can be sold in 2-3 times at the price of returning to the Netherlands, not to mention selling it to other countries.

The same is true for the porcelain business. After becoming the maritime hegemon, the Netherlands has been the largest buyer of Jingdezhen porcelain. Between 1602 and 1657, more than 3 million pieces of porcelain were transferred to the rest of Europe after being shipped to the Netherlands. As an outsider, the Dutch still control the circulation of porcelain in Asia. They have shipped millions of porcelain to India, Ceylon, Myanmar and the Arab region, especially Japan, which loves porcelain, and became the most important dumping place for porcelain in the Netherlands. .

The savvy Dutch did not simply buy porcelain. They also bought raw materials in China and supplied them to Japan to produce porcelain. The famous Imari porcelain was born during this period, and Japanese porcelain continued to flow to Europe. In the early 17th century, the Dutch produced their own famous Delft porcelain, which is still the world’s top porcelain brand.

The enlightenment brought by the Dutch

The Dutch Republican era has always been the focus of historical research. This business-based political form is still worth learning today.

At that time, the Netherlands had a highly active urban economy, and the seven coalition provinces had dense urban networks and achieved urban autonomy. Because each city is taxed separately, in order to develop business, city managers must protect their rights and interests and create individual freedom. At the same time, because of the association’s sake, the interests of various cities are tied up and form a community. They must work together and connect with each other. Even the most powerful Amsterdam is no exception. Also because of the common bundling of interests, collaboration between cities has become very important. Each city has its own functions, such as Delft and Haarlem, which are known for industry, and Rotterdam as a port for shipbuilding and foreign trade, The Hague. It was the political center at that time and was responsible for internal coordination and external communication.

The freedom of belief and the arrogance of the Netherlands today have been realized. It accommodates a large number of immigrants, making the city grow rapidly. The so-called “Netherland Nation” is actually “compatible” with the Flemish, Walloon, German, Portuguese, Jewish and French Huguenots…

In the state of the Union, the Dutch business interests were placed first, and no matter who is in power, commercial interests are the key. Even religions can be relegated to the second place. For example, Catholic countries do not allow women to have abortions. Some merchants of the Dutch East India Company will open boats on the high seas near Catholic countries such as Portugal, France and Spain to provide abortion services. Although unscrupulous, it can also be seen the savvy of the Dutch.

It is in this interest that the Dutch talent has completed many historic initiatives. In addition to the stock exchanges and national banks mentioned above, there are many intriguing details.

For example, the concept of “import substitution” that we often say now, the Dutch have tried at the time. In 1672, the Dutch and French tariff wars were fierce. The French stopped exporting canvas for the suppression of the Dutch shipbuilding industry, but the Dutch warmed up and reacted quickly by industrial cities such as Haarlem to produce large quantities of linen canvas to satisfy the local shipbuilding industry. Need to achieve a true “import substitution”. What’s more, after the Dutch opened this market space, they also entered the UK and Spain “intensified” and seized the market that originally belonged to France. Even if the French army invaded the Netherlands that year, it could still not be cheap in the commercial market.

To this day, the Netherlands is still one of the most developed countries in the world. This country with a small land area and a difficult natural environment is rich and stable. Per capita GDP and disposable income are among the best in the world for a long time. It is the most dynamic city in the world, such as Amsterdam and Rotterdam. In the end, it inherits the old tradition.