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Dutch tiger: the booming economy of the Dutch Republic (1579-1650): Rowena Hammal explains why the United Provinces enjoyed a 'Golden Age' in the first half of the seventeenth century.

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The Dutch Republic, or United Provinces of the Netherlands, was one of the economic giants of the early modern period. Formed in 1579, by 1650 the Republic was dominating European trade and had developed an impressive overseas empire, outshining that of the Portuguese and rivalling that of the Spanish. Dutch merchants grew rich on the proceeds of trade and the profits from home industries. Living standards rose across Dutch society, despite the trends of inflation and falling real wages across Europe. Amsterdam thrived, becoming the centre of European banking and trade.

The question of how the Republic was able to enjoy a strong economy is a fascinating one. In many ways, the odds were stacked against it. Newly formed, the Republic required a political system that would ensure stability and economic growth. In addition, its low-lying geography was a continual challenge, as was the religious diversity of its inhabitants. To complicate matters, until 1648 the Republic was engaged in a war of independence against Spain, a state of affairs that would normally be expected to cripple a small country's economy. That the Republic was able to embark upon a 'Golden Age' in the seventeenth century, in spite of its problems, is a testament to the commercial drive of its society. This article will examine the factors which contributed to the United Provinces' remarkable success.

Political System

As a republic, the United Provinces was practically unique among the countries of Europe, in an age when monarchy was the norm. The 'Golden Age' of the Republic was to prove, both to the Dutch themselves and to observers, that a republic could be an economic power.

The national assembly of the Republic was the States General, based at the Hague and attended by delegates selected by the parliaments of each of the seven provinces. In stark contrast to the rest of Europe, in the Dutch Republic the nobility and land-owning aristocracy were relatively lacking in political influence. Instead, a burgher oligarchy dominated the Republic's affairs. This was primarily made up of members of the regent class, a group of wealthy merchants (of families whose wealth had mercantile origins), distinguished by their right to hold civic office.

Dutch politicians were intricately associated with trade and commerce, and they organised the Republic's affairs with these priorities in mind, drawing on their experience and expertise. As members of the merchant elite, they realised the importance of a strong economy and promoted trade and enterprise accordingly. There was also the opportunity for successful merchants from 'new families' to join the regent class via invitation, so there was a meritocratic dimension to the Republic. This provided a fresh source of commercial acumen for the political sphere, and maintained the links between government and business.

Society

The process of building up the economy was greatly helped by the highly urbanised nature of society. Within the Republic more people lived in towns than in rural areas, another respect in which it differed from other countries in Europe. Dutch towns and cities provided a plentiful source of human capital for trade and industry, whether skilled or unskilled. The guild system was at the centre of urban life, reinforcing the importance of business, protecting guild members from competition, and...

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