In 1668, English merchant-politician (and future Governor of the East India Company) Josiah Child published a pamphlet proposing fifteen ways in which his country should emulate a certain low-lying neighbor to the southeast.
Child wanted the English to emulate “Dutch wisdom” in a variety of financial, economic, and political matters. He was smitten with the Hollanders’ low interest rates, widely available banking services, equitable inheritance laws, innovative shipbuilding industry, low barriers for manufacturing patents, low customs and high excise taxes, quality education in “arithmetick,” generous welfare and employment of the poor, religious toleration and support for immigration, and, last but not least, its tasty North Sea herring (yes, really).
Child marveled that the Dutch were the “envy of the present, and may be the wonder of all future Generations.” Many other prominent Englishmen—keen on the advancement of their country—were inclined to agree with him, including, just fifteen years later, John Locke, the great theorist of political liberalism and natural rights, who wrote his Essay Concerning Human Understanding during his exilic Dutch sojourn in the 1680s (he also saved time for watching Antonie van Leeuwenhoek observing away with his new microscope, assuredly a real spectator sport).
In some ways, it is obvious why so many Englishpeople were interested in the Dutch, the unlikely success story of the day in European politics. But, when you think about which Englishpeople were so infatuated with the Dutch, the story becomes a little more surprising. How do we reconcile the fact the English obsession with Dutch wisdom was shared by people as varied as imperial capitalists (like Child) and nerdy liberal philosophers (like Locke)? Indeed, the items on Child’s list are somewhat strange bedfellows. Features of a laissez-faire financial system (liquidity and low interest rates) are commingled with attributes of early modern political liberalism (caring for the poor and religious minorities). This mapping of an amorphous “liberalism” onto both political and economic matters was not a contradiction of terms for Child (who himself would be pilloried throughout his career as a tyrannical capitalist, closely aligned with the absolutist King James II). Although Child espoused support for socially-minded national policies, he was also one of history’s first megashareholders, and the dominant figure in England’s most powerful chartered company, the East India Company, for nearly a decade. In other words, Child was the consummate success story of a very illiberal age, and yet also an outlier (proto)capitalist apparently interested in the health of his society.
Perhaps looking into what so inspired Child about the Dutch can help us to understand the role that liberalism played in his early capitalism. In order to do that, we must understand what made the Dutch so “wise” in the first place.
Part of why the Dutch were of such great interest to outsiders (not just the English) during the 17th century is that their society was experiencing a Golden Age not just in art or commerce, science or philosophy, but in all of those areas, at the same time. Dutch greatness was intellectual, political, scientific, artistic and economic in nature. Amsterdam was a haven for philosophers like Spinoza and Descartes, and it was also where artists like Rembrandt and Jan van der Heyden flourished. The Dutch East India Company, founded at the dawn of the 17th century, had helped to create a fabulously wealthy merchant class. Dutch citizens enjoyed astonishing political freedoms relative to others in neighboring states, and civic institutions provided the backbone of Dutch life (think The Night Watch), both in cities and the the windmill-dotted countryside. In a palatial period, the most prominent building in architecturally egalitarian Amsterdam was the City Hall.
Simply put, it was Dutch economic and political institutions that made this intellectual, artistic, and scientific Golden Age possible. In The Dutch Republic: Its Rise, Greatness, and Fall 1477-1806, historian Jonathan Israel explores the meaning of the Dutch Golden Age and its legacies. “The Republic was indeed, in the context of its time, peculiarly well suited to assist intellect, imagination, and talent, offering the scholar books, the scientist research collections, the artist materials, and the theologian different points of view, with a profusion found nowhere else.” This was a tantalizing example for other nations to follow, including the English. In the 1650s, the English ambassador to Amsterdam, William Temple, published an eyewitness report on Dutch wisdom, identifying tolerance and Protestantism among its most intellectually stimulating ingredients. But he also noted Dutch financial innovation and merchant culture.
Historians agree. Israel argues that the intellectual Golden Age enjoyed by the Dutch would not have been possible without a remarkable contemporaneous revolution in commerce and finance, arguably the first and most important such event in human history. Israel writes that “this astounding concentration [of great minds], in such a small space, not only coincided with, but was linked to, Dutch pre-eminence in commerce, shipping, and finance, as well as in agriculture, and technology.”
One major corporation ignited this transformation. Dutch cultural pre-eminence was made financially thinkable, first and foremost, by the Dutch East India Company. Incorporated in 1602, the Verenigde Oostindische Compagnie, or VOC, was the world’s first multinational megacorporation. Fueled by the world’s first truly modern stock exchange (in Amsterdam) and an innovative ship-building industry, the VOC, more than anything else, was what transformed a tiny nation of fish merchants and Calvinists perched atop recovered land into a global commercial empire envied by its much larger neighbors, all great powers dominated by monarchs, bullion, and massive standing armies.
The Dutch achieved all this without resorting to political illiberalism. The “wisdom” of the Golden Age was powered by the relative early modern political virtues of republicanism, strong civic institutions, a social ladder with the mildest of aristocracies, a diverse merchant class, and fast-moving finance responsive to the risk requirements of trans-oceanic exploration.
But it was not inevitable that these relatively liberal political institutions went along with Dutch liberalization in religion and commerce. In fact, these political institutions seem less causal of the Golden Age than economic ones. Throughout the 17th and 18th centuries, the Dutch oscillated between limited monarchy and republicanism, and between rule by a tempered aristocracy and a rising merchant class. The political casting of the Golden Age movie—not just the actors, but the institutions, too—changed frequently. This might be our first sign that it should actually be unsurprising for Josiah Child to have been so infatuated with the Dutch. His vision of politics—one in which money bought power (specifically in the form of seats on the all-important Board of Trade) and business thrived under both monarchs and parliamentarians—was actually not all that incompatible with the allegedly “liberal” Dutch Provinces. In other words, the Dutch revealed that early modern capitalistic economic growth could be possible without, for example, democracy. It just required certain market-making business-state arrangements to unleash freedom for a small and select class of merchants and entrepreneurs.
As a royal ally and major figure in the East India Company, Child probably salivated at this prospect. He understood that it was the VOC which effectively subsidized the scientific and artistic revolution of the Dutch Republic, including a publishing industry that produced a mind-boggling half of all the world’s books in the seventeenth century, according to a scholar at the University of Amsterdam. He understood that there need not be a rhetorical or intellectual dissonance between his pursuit of self-interest and his—and his Company’s—pursuit of the public interest, in the form of social welfare or the unleashing of new knowledge.
But let’s take a step back. How exactly did these economic and financial institutions directly lead to intellectual breakthroughs? Let’s take a look at a specific example of how commercial modernization translated into intellectual revolution in the 17th century Netherlands. It was the Dutch financial system, which embraced outside capital and directly facilitated long-term capital investment in the shipping industry, that brought the family of philosopher Baruch Spinoza to Amsterdam. Spinoza, the immigrant son of a Jewish-Portuguese shipping magnate, became the greatest modern theorist of (drumroll please…) liberalism, writing his Tractus Theologico-Politcus and transforming the role of reason in Western thought like no one else, except, perhaps, Descartes, another foreign-born resident of Amsterdam during the Golden Age. The Dutch only had such a welcoming immigration regime because of the opportunities available in its economy for Jews and Huguenots, another minority class with a history of financial acumen, welcomed after King Louis XIV repealed the Edict of Nantes in 1685. It was the broader availability of liquid capital, new financial instruments, and an investor class of newly-wealthy merchants that brought a prosperity (fairly distributed for the early modern period) to the Dutch Provinces. And in some of those prosperous families (including a 16th-century brain drain from jewel-rich Antwerp) there were some smart cookies like Spinoza. Money could buy philosophy, if not love, in late 17th-century Amsterdam.
But if economic and financial factors created the conditions for a flourishing of political liberalism—if the VOC brought Spinoza along in a commerce-and-critical-thinking package deal— how did those political virtues survive in the context of the rapacious corporate empire which those economic factors also created? This is the exact question which would come to shape debates over political economy in England once that country adopted many of the principles of the Dutch Financial Revolution. And it’s the key question we should consider when applying the lessons of this period to the present day—we must be very, very precise about how we link certain economic and political conditions and systems to social and intellectual flourishing.
We should not succumb to the intellectual fallacy of Golden Age thinking and simply accept the example of “Dutch wisdom” as it is often framed in historiography. Was the Dutch Golden Age really as liberal as the logic of this article seems to suggest so far? If we consider the demise of Johan de Witt, Spinoza’s own liberal leader of choice in the United Provinces, the answer is probably no. Those claiming that the flame of liberty in the modern world has been burning since 17th century Amsterdam should take a good long look at the half-eaten corpse of Johan de Witt and ask him what he thinks about that. Functionally the Dutch prime minister for a good chunk of the Golden Age (his official title was Grand Pensionary of the States of Holland and the complications beyond his de facto power aren’t worth getting into), De Witt was a brilliant politician (and side-hustle mathematician) who nevertheless failed to galvanize popular support for a permanent republican alternative to rule by the aristocratic Dutch House of Orange. Lack of popular support for liberalism forced De Witt to negotiate a secret agreement with fellow anti-monarchist Oliver Cromwell to prevent the assumption of the three-year-old Prince of Orange to the throne of Holland, the largest Dutch province and legal seat of its hereditary monarchy.
Admittedly, even De Witt was no democrat. As the Dutch urban mercantile elite grew, especially in Amsterdam, it sought to gain more influence over matters of governance (as Josiah Child so marveled at), and clamored for greater representation at the upper levels of Dutch politics. De Witt was very much a product of this elite, and his republicanism was a limited one, tailored to its interests. He merely opposed the increasingly powerful cadre of “Orangists” who advocated for the hereditary rule of the Princes of Orange as Dutch Stadholders and challenged republican rule in the United Provinces. The House of Orange was strongly associated with the animated Dutch resistance to Spanish imperialism, led by William the Silent, which had birthed the Golden Age in the first place. It had a popular sheen and De Witt was never able to convince his people that the House of Orange was to be feared, not loved.
And while De Witt had a famous fan in Baruch Spinoza, he was less admired by the man in the street. As Spinoza waxed about the “rare happiness of living in a republic,” the Dutch masses turned on De Witt, particularly after a series of military and foreign policy disasters (in a war with the English, no less). He and his brother were murdered by a violent mob in The Hague, which allegedly then cannibalized him. That’s what the Dutch masses had to say about “republicanism,” and, by that token, liberalism, too. The lesson is clear: no amount of economic liberalization will automatically change people or politics. Surely we in the 21st century can understand this.
So why did the English look past these warning signs in the Dutch experience? What so attracted them? The virtues of adopting liberal attitudes toward capital, distribution of political power, both, or neither? It is exceedingly challenging to map any kind of liberal-conservative spectrum onto English politics in the mid-17th century. For instance, even though Josiah Child expressed support for welfare-oriented policies in the “Brief Observations Concerning Trade and Interest of Money,” most of his contemporaries would consider him a conservative, or even a monarchist reactionary. Indeed, the fruits of empire —those plucked by the East India Company—were not distributed widely enough to boost the prosperity of the “average English family” such that it was. So why did Child profess to admire the social welfare policies and bottom-up benefits of Dutch wisdom in his fifteen point plan? Did he really care about them? Or was he paying cynical lip service to copying a Dutch regime which he actually knew—from the political lessons of the demise of Johan De Witt, for instance—was not fundamentally liberalizing in a way that would damage his own hold on power?
Ultimately, neither ideological epithet—conservative nor liberal— would be accurate. Child was simply a politically adaptable, slippery figure who understood the importance of friends in high places, and whose downfall was dictated by his enemies in high places. In a way, Child was simply a good microcosm of the East India Company itself, the corporation which he came to dominate in the 1680s. At certain times in its history the EIC was dominated by old-guard Tories (aligned with the Crown), and at others by new establishment Whigs (aligned with the rising merchant class). The Company expanded its power and influence under Stuart monarchy and Parliamentary supremacy alike, weathering political opposition, popular or otherwise, at every turn (including from Cromwell). And while critics of the Company’s monopoly emphasized Child’s connection to the hated absolutist King James II in their campaign to end his then-total control of the Company, the Company itself endured and expanded well after the Glorious Revolution—and so did England.
We should challenge the narrative that the economic liberalization brought about by the Financial Revolution in the Netherlands and England brought about a coterminous revolution in political thought and practice towards republicanism, parliamentary supremacy, and liberalism. Even though politically liberal aims were mixed with economic ones in English rationale for emulating the Dutch, the Dutch experience itself shows us that liberalizing economic transformations no not necessarily push political circumstances in the direction of greater freedom. At the height of its Golden Age, the Dutch Provinces’ experiment in republicanism remained fragile and proved temporary.
Nor does the rise of Parliament in England—while the Dutch retrenched into aristocracy—mean that the Financial Revolution in England actually played a role in fast-tracking political liberalization. The East India Company remained a fact of English economic life regardless of oscillations between more and less liberal political systems—it did not cause any kind of liberalization or transformation of the English experience of freedom.
So if this story bears any transferrable lesson to our modern world, it’s this: just because a society has embraced certain attitudes toward capital (and technologies) does not mean that such a society will automatically and immediately adopt greater political freedoms. And only once we disentangle the political and economic histories of liberalism can a truly accurate history of early modern—and modern—capitalism emerge.
by Zachary Partnoy
