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Dutch Republic was much stronger in decades after Tulip Mania
From: David Farber <dave () farber net>
Date: Mon, 29 Sep 2008 11:12:02 -0400

Begin forwarded message:

From: "Dirk van der Woude" <dirkvanderwoude () gmail com>
Date: September 29, 2008 11:01:25 AM EDT
To: dave () farber net
Cc: "Dekker, Vincent" <v.dekker () trouw nl>
Subject: Dutch Republic was much stronger in decades after Tulip Mania
Reply-To: dhvanderwoude () gmail com

Dave, for IP if you wish.

Ehrr - the Tulip mania was in 1637 That's several decades
before the real high power of the Dutch Republic, the years it
kept the mightiest ever French King Louis XIV more or less
under it's thumb. In the same periode the Dutch even managed
to conquer the UK, get their Stadtholder William crowned as
king etc. From 1688 for some two years London was patrolled
by Dutch soldiers (or perhaps German soldiers in Dutch pay,
my landspeople always being masters of outsourcing).
So the decay, if there was one, certainly was started by the
tulip mania related.

The influence of the Dutch Republic waned after the 17e century,
however not so much financially. Like up to the mid 1800's all of
the USA debt was to Dutch financers - indeed the first foreign
loan to the USA was 5 million guilders in 1782, secured by
Mr John Adams. Other statistics show that even in the early
1800's the income per capita in the Netherlands was the
second highest of Europe, albeit massively unfairly distributed.

There is another theory, on the waning of the Dutch influence,
to me much more plausible: the Dutch capital and brains in the
mid 1600's and especially after the Glorious Revolution of 1688
moved to the UK. Recently Lisa Jardine in a new book revived
the vision of Charles Wilson in the 40's of last century. Below
some excerpts of a review published this month.

From Amsterdam,
Dirk van der Woude

'Going Dutch' is elegant and thought-provoking

By JONATHAN LOPEZ, For The Associated Press Mon Sep 15, 5:47 PM ET

"Going Dutch: How England Plundered Holland's Glory" (Harper. 432 pages. $35), by Lisa Jardine: In November 1688, Prince William of Orange, the elected leader of the Dutch republic, set sail from the port of Hellevoetsluis in command of a 450-ship invasion fleet bound for England.

William's 20,000 troops landed on the coast of Devon, marched to London and deposed King James II, who was allowed to flee to France after a brief period of captivity. Coercing the approval of Parliament, William and his wife then usurped James' throne, assuming the roles of king and queen of England. Or, at least, that's one way to describe what happened.

This revisionist account of the Glorious Revolution — a watershed moment that's more often seen as a rejection of James' abusive rule by his own subjects — forms the centerpiece of London University professor Lisa Jardine's elegant and thought-provoking new book, "Going Dutch," a sweeping chronicle of the intellectual, political and cultural links forged between England and the Netherlands during the 17th century.

"Going Dutch" opens with a simple question: Why has the Dutch invasion of 1688 gone down in the history books as a popular English uprising? "Why is there no trace of this mighty armada ... in conventional historical accounts of the so-called 'Glorious Revolution'?" Jardine asks. "Why are so few of us aware that at the time of the English Parliament's 'welcoming' of William ... the country was in the grip of a full-scale military occupation?"

(...) Deftly tracing the movements of people and ideas in fields ranging from monetary policy to garden design, Jardine evokes a dialogue of civilizations in which attitudes on both sides of the Anglo-Dutch divide developed in tandem. She argues that this pre- existing web of cultural exchange helped smooth over the abrupt transition from the reign of James to that of William and Mary, and made it seem, in hindsight, less like a foreign takeover than a purely internal English dispute.


In Jardine's view, the English and the Dutch developed a special affinity that not only brought the two cultures together but also disqualified other nations, to some extent, from participating in the conversation. The English, for example, consciously emulated Dutch financial practices, which were generally acknowledged to be superior. And as England's financial institutions grew increasingly similar to their counterparts in the Netherlands, both countries decreased their transactions with France. The English and Dutch, Jardine suggests, became birds of a feather who flocked together.


The subtitle of "Going Dutch," for example, is "How England Plundered Holland's Glory," but we learn only on page 357 that Jardine intends this phrase to refer to the declining cultural influence of the Netherlands and the rising influence of Great Britain during the 18th century. This discussion, which lies somewhat beyond the scope and timeframe of "Going Dutch," seems very much like a movie trailer for an upcoming sequel.

On Mon, Sep 29, 2008 at 3:38 PM, David Farber <dave () farber net> wrote:

Begin forwarded message:

From: "Dave Wilson" <dave () wilson net>
Date: September 29, 2008 9:00:00 AM EDT
To: "David Farber" <dave () farber net>
Subject: tulips

I decided to reread the chapter on the Dutch tulip mania of the 17th century from a 19th century tome, "Extraordinary Popular Delusions and the Madness of Crowds" by an English journalist, Charles Mackay (note that modern free market thinkers believe this account is BS, because there can by definition be no speculative manias in a free market). Anyway, I was struck by this paragraph, which details what happened after a few years when the music stopped and the price of tulip bulbs stopped going up (the subsequent decline marks, coincidentally or not, the end of the Netherlands as a world power):

" At last, however, the more prudent began to see that this folly could not last for ever. Rich people no longer bought the flowers to keep them in their gardens, but to sell them again at cent. per cent. profit. It was seen that somebody must lose fearfully in the end. As this conviction spread, prices fell, and never rose again. Confidence was destroyed, and a universal panic seized upon the dealers. A had agreed to purchase ten Sempers Augustines from B, at four thousand florins each, at six weeks after the signing of the contract. B was ready with the flowers at the appointed time; but the price had fallen to three or four hundred florins, and A refused either to pay the difference or receive the tulips. Defaulters were announced day after day in all the towns of Holland. Hundreds who, a few months previously, had begun to doubt that there was such a thing as poverty in the land, suddenly found themselves the possessors of a few bulbs, which nobody would buy, even though they offered them at one quarter of the sums they had paid for them. The cry of distress resounded everywhere, and each man accused his neighbour. The few who had contrived to enrich themselves hid their wealth from the knowledge of their fellow-citizens, and invested it in the English or other funds. Many who, for a brief season, had emerged from the humbler walks of life, were cast back into their original obscurity. Substantial merchants were reduced almost to beggary, and many a representative of a noble line saw the fortunes of his house ruined beyond redemption."


A successful society is characterized by a rising living standard for its population, increasing investment in factories and basic infrastructure, and the generation of additional surplus, which is invested in generating new discoveries in science and technology.
--Robert Trout

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