Although it is generally recognised that capitalism had become the dominant mode of production in England by the time of the ‘Glorious Revolution’ of 1688 (or at least shortly thereafter), the development of capitalism in the Low Countries – what would later become the United Provinces – is a more conten-tious case. Some Marxists have been sceptical of the capitalist credentials of the United Provinces in the early modern period. Eric Hobsbawm described the Dutch Republic of the 17th century as a ‘“feudal business” economy; a Florence, Antwerp or Augsburg on a semi-national scale’.36 Similarly, for Ellen Meiksins Wood, the Dutch Republic of the Golden Age was the ‘last and most highly devel-oped non-capitalist commercial society’.37 While recognising the ‘unprecedented degree of commercialization’ of the Dutch economy, and the ‘penetration of trade relations into both urban and rural economies’, Wood claims the Dutch Republic
‘still operated on familiar non-capitalist principles, above all in its dependence on extra-economic powers of appropriation’. And although the ‘Dutch pioneered many improvements in labour productivity, not least in agriculture, it is not at all clear that they were driven by the kinds of competitive pressures associated with capitalism’.38 Yet these claims rest on rather spurious grounds.
In the first place, to compare the Dutch Republic to the Italian city-states of the 13th century, as does Hobsbawm, is to seriously underestimate the
unprecedented scope and scale of the Dutch commercial empire. For ‘[e]xcept for Britain after around 1780’, Jonathan Israel notes, ‘no one power in history achieved so great a preponderance of over the processes of world trade as did the Dutch’. This was a ‘fully fledged world entrepot’ that not only interconnected the markets of all the continents, but dominated them, concentrating economic power to a degree found ‘never before – or perhaps since’.39 Not only had the Dutch merchant classes tapped into the lucrative trading markets of the Atlantic, Mediterranean and Baltics by the mid-17th century, they had also through the Dutch East India Company (Vereenigde Oostindische Compagnie, VOC) largely succeeded in displacing Portuguese merchants in the Indian Ocean (see further Chapter 7). Dutch primacy in world trade depended, above all, on both this
‘East–West’ axis of international trade – the ‘rich trades’ of commodities and luxuries imported from the Spanish Americas, Levant and East Asia40 – and a
‘North–South’ commercial axis stretching from the Baltic to the Mediterranean – consisting primarily of European bulk carrying.41 Here again we encounter the importance of American silver, as it was the principal means by which Dutch merchants effected purchases and bought supplies in Asia.
This was a commercial empire of a magnitude hitherto unknown in human history. One factor that made this achievement possible was the dynamism of the capitalist social relations that had emerged over the course of the late Medieval and early modern eras in the Northern Netherlands. ‘The main asset of the upstart republic’, Ronald Findlay and Kevin O’Rourke write, ‘was its economic system, certainly the most productive and efficient in Europe at the time’.42 For Robert Brenner, the initial catalyst for this capitalist breakthrough was an ecologically driven process of ‘primitive accumulation’ in which the peasants were pushed off inutile arable lands (those rendered uncultivable), divorcing them from their means of subsistence and making them market- dependent.43 But rather than effecting depopulation of the countryside as had occurred elsewhere in Europe, Dutch peasants took a different course: commer-cialised farming. One of the preconditions for this shift towards commercial farming was the possibility of importing basic foodstuffs. The emergence of commercialised agriculture in the Northern Netherlands was directly connected to the growth of trade with other grain-producing regions of Europe – notably, from the mid-15th century onwards, the Baltics. The various towns of medieval Holland thereby acted as key ‘nodal points’ linking the developing capitalist agrarian economy ‘to those inter-regional networks of trade’.44
In this respect, international relations – through foreign trade – played a decisive role in the rise of Dutch capitalism, although the geopolitics of the age would also play their part. In particular, the favourable ‘systemic circumstances’, as Giovanni Arrighi calls them, established by the particular configuration of the European market at the time were critical to the success of the capitalist relations that took hold throughout the Low Countries by the early modern
period. Such systemic conditions were, in the first instance, the interactive
‘effect of the actions of a multiplicity of agencies’.45 For the Dutch, Arrighi writes, ‘these systemic circumstances consisted of a fundamental temporal and spatial disequilibrium between the demand for, and the supply of, grain and naval stores in the European world-economy at large’. For throughout most of the 16th century and up until the mid-17th century, demand was ‘large and growing rapidly’, particularly in Western Europe, due to the inflow of American silver and the intensification of geopolitical conflicts among the states of the Atlantic seaboard.46
Supplies of grain were, however, soon limited by the precipitous rise in demand and concomitant exhaustion of Mediterranean provisions. Conse-quently, supplies came to be concentrated in the Baltic region. These conditions provided the Dutch merchant community with the opportunity, assisted in part by the earlier decline of the Hanseatic League, to dominate the European market. ‘By stepping in and establishing tight control over the transfer of Baltic supplies through the Sound’, the Netherlands came to occupy what over the course of the 16th century ‘turned into the most strategic market niche of the European world-economy’. In turn, they ‘became the beneficiaries of a large and steady stream of money surpluses which they further augmented by imposing an inverted fiscal squeeze on Imperial Spain’47 through their war of independence (examined below).
What is particularly important to note here is how the Netherlands’ growing trade relations, both before and after their emergence as a dominant world economic player, interacted with burgeoning capitalist production relations in the countryside. Since as early as the 11th century, the Low Countries had functioned as a central nodal point of European trade.48 Vital to the precocious development of capitalist social relations there was a particular form of ‘urban-agrarian symbiosis’.49 Indeed, the role of intra-European and colonial trade in the making of Dutch capitalism has been stressed by most scholars in their explanations of the high levels of economic growth and technological advances that set the Dutch economy apart from the rest of Europe during the early modern period.50 The ‘importance of European and colonial trade’ in the devel-opment of the Dutch economy of the period, Jan Lucassen writes, ‘could hardly be overstated’.51 From the earliest stages, then, the development and reproduc-tion of Dutch capitalism was inextricably bound to internareproduc-tional condireproduc-tions and developments (see further Chapter 7).
Urban industries emerging in Holland and connected to the European-based feudal world market were, moreover, intimately tied to rural development for supplies of raw materials and labour. Much of this agrarian production was oriented around town markets, which acted not only as centres of distribution and consumption but also increasingly as independent centres of production.52 As early as 1500, Peter Hoppenbrouwers notes, ‘the majority of the rural
popu-lation combined small-scale agriculture with various forms of commercially oriented by-employment linked to urban demand’.53 Given the high density of urban centres throughout Holland, it was very difficult for any individual town to exert political control over the countryside, as it would provoke reac-tions from other towns.54 This had the effect of enabling pockets of agrarian production, uninhibited by the political domination of any single urban centre, to further develop, expand and consolidate in increasingly capitalist directions.
Powerless to control the countryside politically, the bourgeoisie sought to extend their reach by economic means. This led to forms of ‘proto-industrial’
development, in which urban merchant entrepreneurs invested directly in rural industries as peasant production became increasingly geared toward the world market.55 Consequently, urban merchants obtained control over the means of peasant production at a relatively early stage, aided by the accessibility of the capital market and low cost of credit.56 This then ‘set the stage for full prole-tarianisation once these merchant-entrepreneurs started to move large swathes of the production process to the cities. It is this particular urban-agrarian symbiosis that set the stage for the transition to capitalism in Holland’.57
By the middle of the 16th century, almost half of all rural labour in central Holland was waged. In the Guelders river area, as much as 60 per cent of work was performed by wage-labourers – a proportion reached in most industrialised areas of Europe only in the 19th century. As a whole, probably more than a third of all labour in the Low Countries during this time was undertaken for wages. This was a high proportion compared with estimates from other parts of Northwestern Europe, England included.58 In short, by the mid-16th century, more or less market-dependent forms of wage-labour had become a structural feature, albeit a geographically uneven one, of the Dutch economy.
Moreover, as Bas van Bavel notes, as early as the 13th century the Low Coun-tries, particularly in their northwestern regions, saw the early commodification of land, with ‘[o]pen, flexible, competitive, and secure land and lease markets’.
These existed alongside other key preconditions for capitalist social relations such as ‘buoyant trade, flourishing markets, a money economy, and booming cities’. These were again all more or less established in the 13th century; that is, some three centuries before England would experience its capitalist break-through.59 To be clear, these were ‘key indicators’ for a later transition to capitalism, as social relations in the Low Countries at that time were not capi-talist, nor were these features characteristic of the development of the Low Countries as a whole.60 Nonetheless, such developments did provide the crucial
‘preparatory conditions’ for capitalism’s subsequent emergence there (see also Chapter 7). As all of this evidence indicates, claims that the Low Countries was merely a ‘highly commercialized feudal’ society seem very difficult to sustain.
The dynamism of the Dutch economy of the early modern period was perhaps its most distinguishing feature. In the early 16th century, agricultural
labour productivity in the Low Countries was by far the highest in Europe, with some 175 mouths fed by 100 people working in agriculture, compared with from 100 (Poland) to 135 (England, France, Italy) in other parts of Europe.61 Between 1510 and 1795 the total population of the Netherlands doubled, while between 1510 and 1810 agricultural productivity tripled,62 with the great bulk of this increase occurring before the mid-17th century.63 It seems wise to concur with Robert Brenner’s conclusion that:
the Dutch economy as it emerged in the early modern period thus appears to have been quite fully capitalist. It was unburdened by systems of ruling class extraction by extra-economic compulsion … its producers, notably agricultural producers, were entirely dependent on the market and subject to competition in produc-tion to survive .… [h]igh levels of investment obtained, which issued in rising capital:labour ratios, rapid productivity growth and, ultimately, high wages and income per person more generally.64
Therefore, even in Brenner’s restrictive view of capitalism as market depen-dence, the Low Countries are conceived as having been set on a capitalist path of development by the early to mid-16th century, even if capitalist development there remained ‘limited’ and constricted until 1580, only after which accumu-lation fully took hold (see Chapter 7).65 Much like the English case (see below), capitalist development was pronounced – if still ‘incomplete’ and restricted – in the Low Countries preceding the revolutionary settlement which would estab-lish the sociopolitical conditions for its fuller development and consolidation.
What are crucially missing in Brenner’s account, however, are the distinctly international conditions that facilitated the development and systemic consol-idation of capitalism in the Low Countries. For it was only through the geopolitical and military struggles raging across Europe that provided the systemically enabling geopolitical space from which the Dutch Revolt emerged, and emerged successfully. Moreover, the economic consequences of these rival-ries acted to displace the hitherto dominant Genoese high finance that the Dutch came to supplant. As Arrighi writes, ‘[t]he withering away of Genoese dominance in European high finance, the progressive erosion of the power of Imperial Spain’, to which the Genoese financiers were inseparably linked, ‘and the break-up of the Genoese–Iberian alliance cannot be understood except in the context of the escalating competitive power struggles that made the fortunes of Dutch capitalism’.66 This international environment was also crucial to the
‘combined’ character of Dutch capitalist development, as the Dutch came to fuse earlier forms and methods of protocapitalist organisations and institutions pioneered by the Genoese (the stock market) and Venetians (such as monopo-lies and the institutional antecedents that came to form the basis of the Dutch’s greatest innovative synthesis, the VOC). They also combined Venetians and
Genoese merchant capitalists’ different strategies of capital accumulation: the former characterised by regional consolidation based on self-sufficiency in state and war-making: the latter by worldwide expansion based on a relationship of political exchange with foreign governments.67 All were integral elements to the emergence of the Dutch state as the dominant world economic power over the late 16th and 17th centuries.