Douglass C. North

The Rise of the Western World: The Netherlands and Successful Economic Growth

The Netherlands, in particular the seven provinces in the north, were the first areas of Western Europe to escape the Malthusian checks. The United Provinces, as we have seen, generated a sustained increase in per capita income during the seventeenth century, at the same time as they supported an increasing population. It was in this area that a fortunate conjunction occurred between the interests of the state and the interests of the progressive sector of society. The Low Countries since the Middle Ages had been the natural entrepot of Western Europe and continued to enjoy this role through the seventeenth century, obtaining a practical monopoly of European transport and international commerce. This dominance, due to location, superior commercial techniques and the enormous backwardness of their neighbors, remained intact through the first quarter of the eighteenth century. The Dutch success is all the more interesting because it was a small country with relatively few resources. Instead of relying upon nature to provide its bounty, the Dutch developed an efficient economic organization compared to their rivals and in so doing achieved an economic and political importance all out of proportion to the small size of their country. Henri Pirenne makes clear that the Burgundian state was a truly remarkable political phenomenon, welding together the diverse and jealous cities and towns of the region. Between the end of the fourteenth century and the mid-sixteenth century the four dukes of Burgundy (and after the Habsburg inheritance, Charles V) played an important role in the emergence of the area as the commercial leader of Northern Europe.