Factors That Contributed to the Rise of Dutch Commercial Power

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Table of Contents

Introduction
Factors
Conclusion
Works Cited

Introduction

Thesis statement: After achieving agricultural success, the Dutch diversified into the fishing industry and the Baltic and the North Sea carrying trade during the 15th and 16th centuries before starting a far-reaching maritime empire in the 17th century. In a little over a century, the Northern Netherlands regions rose from relative insignificance to the apex of European commercial attainment. The Dutch built their success on a suitable agricultural foundation.

Factors

Dutch shipping started to grow as a major sector of the economy in the 15th century. It is likely that indecision of the traders from the Southern Netherlands to invest in sea transport led to the towns of Zeeland and Holland starting to cater to the shipping requirements of the commercial cities of Flanders and Brabant (especially Antwerp). In the 17th Century, the Dutch Republic owned 18,000 out of the 20,000 ships in Europe.

Herring fishing was already a common Dutch activity in the North Sea. However, their increased presence led to increased competition for Baltic markets with the German Hanseatic League by trading their herring catches, salt, wine, and cloth in exchange for Baltic grain. Despite having to wait until 1648 to gain full independence, the country was at liberty based on ceasefire made with Spain in 1609. It is therefore interesting to note how the Dutch managed to keep at bay the then most powerful military power in Europe. Historians argue the Dutch enjoyed massive verse support from the Britons and the French and had the upper hand due to the use of flood dikes to fight any incoming threat from the sea. For instance, out of the 132 military companies that the Dutch army had in 1600, Dutch nationals comprised only 17 companies. The remaining soldiers were of English, French, Scottish, Walloon, and German descent. The soldiers from different nations were loyal to the Dutch and fought for them because the Dutch could afford to pay them. In spite of drilling the country’s financial resources, the gains were more than the cost incurred. The country was slowly receiving increased economic dominance in Europe.

As the trade continued, the Netherlands was developing their economy in two ways. To begin with, they invested in diverse industries ranging from traditional and the new. They invested in munitions, sugar refining, textiles, munitions, soap boiling, glass, tobacco curing, and diamond cutting. A lot of money was generated from these industries. As a result, there was the need for an effective strategy for handling the money; hence, the establishment of financial institutions. The Bank of Amsterdam lowered interest rates due to the vast sums that they gained in deposits. As a result, the bank was able to finance more investments that returned more profits. The triumph of the Bank of Amsterdam was evident even when the country was at war when it was in a position to lower its interest rates from 12% to 4%. Netherlands also created a stock market. In the beginning, only commodities were traded. The country was also the pioneer of the first stock market in the world. In addition, the world’s first financial (Aramaic) is directly linked to Babylonians (the Aramaen people).

The trade was expanded in three different directions. As a start, they expanded through the Mediterranean. Frequent famines had struck the region in the 1590’s marking the beginning of a “Little Ice Age” that would distress Europe for the next century. As a result, new opportunities for the sale of Polish grain were opened, and the Dutch sold this in exchange for marble and other commodities. The Mediterranean trade for the Dutch extended to include business with the Ottoman Turks. Secondly, while Portugal was under Spain’s rule, it shut down access to its supplies to salt. The Dutch had to find salt in Venezuela. Their search for salt led them to discover that the plantations in the West Indies wanted slaves and they got tangled in the African slave trade. Also, the Dutch found that sugar was a more profitable condiment in the Caribbean than salt. In no time, the Dutch started their colonies such as Dutch Guiana and took control of the sugar farming and trade. Within a few years, sugar was in completion with the spices of the Far East in value. On the other hand, this does not imply the Dutch overlooked the Far Eastern trade.

Research has established that three geographic factors led to the growth in the dominance of the Dutch Republic. To begin with, the name Netherlands (literally “lowlands”) implies that most of the country is under sea level. The Dutch were continuously employed polders, windmills, and drainage structures to claim, reclaim, and maintain their lands. The country managed to recover at least 25% of its modern day land. The country has several rivers that aided transportation. The scarcity of Natural inspired the ingenious Dutch merchants, sailors, and engineers. They embarked on the understanding that you have to spend money to be able to make more money, rather than relying on Natural Phenomena to gain financial mileage. The rise of the Dutch all began with fish. In the 1400’s, there was the migration of the herring shoals, which were a primary pillar of the Hanseatic League, from the Baltic to the North Sea. The Dutch Republic gained from the loss of the Hanseatic League. The biggest aid for the Dutch was that refrigeration was yet to be invented and salted herring was the most important source of protein in Europe. Particularly the Netherlands had a 40% urban population that depended on the herring and relied on imports for at least a quarter of its food supply. The trade was also boosted by the trade in salt for the preservation of herring. The coasts of France and Portugal were the sources of Salt. The businesses were complementary in nature, where salt collection was mainly done in the first half of the year and the second half was for herring season. One advantage that the Dutch had over other countries is that they carried out large-scale operations, unlike other nations. The Dutch cruised buses (a common name that referred simulated floating factories) carrying barrels of salt for curing the herring. The Dutch ‘buses’ were more efficient that the English open fishing boats. The Dutch managed to produce large amounts of herring to the extent they drove the competition out of business.

The herring trade for the Dutch created a pattern of success since the profits obtained from the business were invested in other ventures where the Dutch also profited creating a cycle of benefits. The trade promoted the growth of two major areas of development, foreign trade, and the domestic economy. International trade and the national economy, in turn, fed back into the cycle of profits. Both external trade and the local economy led to the growth of commerce across the globe; and the expansion of profit pattern. In hunt of foreign markets, the Dutch started by developing their processes into the Baltic Sea by acquiring timber from Norway, grains from Poland and furs from Russia. The raw materials were used in Dutch industries locally and internationally. The importance of the Baltic trade is highlighted by the manner in which it was referred to by the researchers. It was known as the “Mother Trade.” The trade needed hardy, well-organized, and economically built ships that could work in the bouncy waters of the North and Baltic Seas as well as the low sea waterways that were typical of Holland. Dutch ingenuity in engineering led to the development of the fluyt. Not only was the fluyt tough enough to bear stormy seas but it was also able to stand shallow draught for inland waterways. The fluyt was a ship highly developed for merchant trade since unlike other countries whose ships had guns and doubled as warships; the fluyt had none if any and space was reserved for cargo. The fluyt cost less to build and was half as expensive as other ships. It employed technology such as mechanical cranes, wind-powered saws, and generally bigger shipbuilding methods. Besides the mentioned technology, the fluyt employed easier rigging using winches and tackles, a mechanism that reduced the required crew to 10 men, less than half of what other European ships used (Haviser 170). Subsequently, the Dutch enjoyed two advantages from their ships. They could carry and trade goods at half the prices the completion did and so gained control over trade in Europe. Secondly, the Dutch asserted their dominance over Europe’s shipbuilding industry.

After their second market, the Asian Spice market was the third new direction for the Dutch. However, this was not an easy venture for them. It was a challenge to find the West Indies to begin with (Grove 130). Interestingly, the Portuguese had managed to keep a secret the South East Passage around Africa for a little over a century after the pioneer voyage of Vasco da Gama. The Dutch searched unsuccessfully for a way to Russia in the northeast. Efforts were also made to seek a way through the southwest, and Oliver van der Noort (1599-1601) was successful in this endeavor that made him the third captain to be successful in orbiting the world after Ferdinand Magellan and Sir Francis Drake. This route turned out to be more efficient for the Dutch than it had been for the Spanish and English. In the end, Jan van Linschuten, a Dutch captain who had worked for Portugal, led the way for the Dutch around Africa in 1597. While they did not achieve success financially on the first voyage, the subsequent voyages were profitable. Investors were eager to get a piece of the action. Dutch East Indies Company was created in 1602. The privately owned firm acted took over the spice trade from the diminishing Portuguese influence. The Dutch East Indies Company was constantly on the search for new markets. They found Australia, New Zealand, and Tasmania while exploring the South Pacific. New Zealand and Tasmania were named by the Dutch. With their extensive trade and dispute with Spain, the Dutch needed a navy to protect their trade ships. As a result, the Dutch developed a Navy that not only protected its affairs but also reinforced its superiority. The Dutch created vessels that suited their shallow waters and could sail long range at the same time. The Dutch frigate had good sailors and captains who made Holland a powerful naval nation in the 1600s and also assisted them to control the warship-building trade, constructing navies for both sides in a Danish-Swedish War and even for their French competitors (Flanagan 80). The result was that the Dutch made more money and built their domestic industries and finance operations. In the early 1600’s, Amsterdam was the core of world trade that allowed the Dutch to take part in activities such as patronage of the arts. In the 17th century, Netherlands was the focus of a cultural blossoming similar to Italy during its Renaissance.

Conclusion

Advancing on its 15th and 16th-century successes, in agricultural production, and sea trade in the North Sea and Baltic shipping, the Dutch built an economic legacy for themselves. While other countries were torn apart by revolution and unfavorable circumstances, the Dutch used their geography and money to their advantage. The Dutch used their resources to beat the Spanish invaders and survived a period of war to emerge with economic prosperity. The country built on its trade and ingenuity in engineering to experience rapid economic growth and grew steadily until the Golden Age. Despite the loss of market dominance overseas in the 17th century, the Dutch had for a long time enjoyed economic prosperity.

The Roman Empire failed to adequately address its economy’s problems in time, which resulted in a number of complications that prevented the Empire from growing further. Although some researchers argue that the period of “golden age” in Roman history provided a stable and safe environment for further growth, others note that this led to a severe decline in the numbers of slaves that were mostly brought to the Empire after wars and because of the piracy. The reducing numbers of slaves made it significantly harder to exploit a cheap labor which damaged the economy further. The Dutch Empire, on the other hand, successfully secured its incomes by implementing an effective foreign policy and trading via sea travels across the globe.

The two extremities are presented in this paper. While the Roman Empire had a significant period of world dominance and overall prosperity, the Dutch Empire had to rely on various sorts of establishing an economy that stimulated growth of the Empire and its well-being as well. Both of these examples may be regarded as historical models of different approaches to economic problems. If both of the examples are taken into account, one may learn much from them by comparing the policies and the premises of the Roman Empire’s fall and the Dutch Empire’s rise.

Works Cited

Flanagan, Roderick. The History of New South Wales: With an Account of Van Diemen’s Land [Tasmania], New Zealand, Port Phillip [Victoria], Moreton Bay, and Other Australian Settlements. Cambridge University Press, 2014.

Grove, A. T. The Little Ice Age and its geomorphological consequences in Mediterranean Europe: The Iceberg in the Mist: Northern Research in pursuit of a Little Ice Age. Springer Netherlands, 2012.

Haviser, Jay B. The Old Netherlands Style and Seventeenth-Century Dutch Fortifications of the Caribbean. First Forts. Brill Publishing, 2013, 167-188.

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Factors That Contributed to the Rise of Dutch Commercial Power

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