In 1572 twelve Dutch cities - less than a million people - began a war for independence against a global superpower and won. Over the next century they went toe-to-toe with the Spanish, English, and French and built the institutions which have defined the modern world. Jonathan Wallis explains how.
Transcript
Introduction (00:00)
It took the Dutch 80 years of off and on warfare to win their independence, so it’s suiting that we have to exercise a little bit of patience before we can get this talk started. I wanted, before I dived in, to talk a little bit about the case study, a small piece of methodology that Ben and I are both passionate about. When Ben asked me if I would be interested in giving a talk for The Students, I spent a moment thinking about the talk he gave, essentially about different kinds of economic and social engines and how they tend to compete with each other, how you could get into systems that are too locked down for them to be able to evolve because all of your political and economic power has been concentrated in a class of people who are no longer driving productivity, and on how there are these windows of opportunity where you can start to generate a new economic and political elite that is capable enough to kind of overcome the old. And it suddenly struck me that I’ve been spending a lot of time recently looking into the Dutch Republic, which is basically to a T, an instance of this. This is a case study that’s kind of ongoing for me.
I don’t consider myself to be a master of this material, but we are all students here, so it is entirely possible that some of you know more about some of the fine details of this. And we’re also going to be covering about 100 years of events in maybe 45 minutes or a little over that, so obviously we’re going to be light on the details at some point. But on the whole, Ben and I both really like case studies because nothing helps you learn about the world in a more intricate way than getting into the intricacies of some particular area. A lot like how in kind of the golden age of biology, that Darwin powered and was part of, a lot of what they’re doing constantly is sketching just animals and organisms of every kind in as detailed of a way they can, and caring about all of those little details. And even I’ve seen some discourse, though biology is not my field, I’ve seen some discourse that many of the abstractions, some of the digital models people see on PowerPoints, even of microorganisms, are less detailed than people were putting together with relatively primitive microscopes, because they cared about getting into the weeds of things.
So, I encourage anyone who wants to really learn about society to just come to know an increasingly comprehensive area about a few domains, and to collect what they know and share it with their friends. And so with all that said, let’s get into it. I wanted to talk about the Dutch because I am very interested in the origins of modernity. We can obviously talk about England and the Royal Society, their culture of innovation when it comes to modernity. We can talk about centralized state bureaucracies in Versailles.
We can talk about the Ottomans as one of the first, essentially professionalized militaries. We can talk about the rise of geopolitics as a concept, which is entangled with all of these things. But among these heavyweight powers, the Ottomans, the French, the English, later the Prussians, we have a tiny country squeezed between a lot of powers that are much, much larger than they are that, for about 100 years, is one of the great powers of Europe. And why? Basically because they were a country from the future.
They were far ahead of everyone else on a number of very vital dimensions. This is the story, roughly, of how they got there, what they did with it, and where it started to go wrong. So, this is the Netherlands a long time ago. It’s changed a lot. The Dutch have changed it a lot.
Draining the bogs (04:05)
A lot of this material is a peat bog, essentially. And this area in the center is actually still basically a freshwater lake. And a lot of this area is also quite wild and quite unsettled. But then they make their own Bay Area.
They are starting to settle the land, they are starting to drain the bogs, and they are starting to grapple with the problem of living in an area that is full of bogs and full of irrigation problems and constantly being battered by the sea, as you can kind of just assume from the geography there. It is quite chaotic. A lot of this area is being settled essentially by contract. We’ll get to that in a moment. So as things evolve, they are kind of constantly trying to reclaim the sea.
It is really a continuous process. We’ll talk a bit more about that later. They are a people being forged by the infrastructural problems of constant flooding and water management, and the opportunities and crises it provides. And then we get to the modern Netherlands and the probably apocryphal quote from René Descartes that, “God made the world, but the Dutch made the Netherlands.” Obviously, you can see that the literal geography has changed quite a great deal, but over this several hundred-year period, this has also been converted from one of the relatively wildest areas of Western Europe, into the richest country in the world at that time.
Even by 1500. 1850 is whole other story. So now let’s talk about peat, and let’s talk about water and settlement. So because this area was unsettled and the nobility of Europe wanted people to settle it, essentially the labor market meant that they ended up selling people contracts to—Essentially giving people contracts to pay them rents in cash with more rights than were customary for a lot of people. And because it’s a relatively few nobles are in control of this land and essentially setting it up, the entire area ends up with a much lower fraction of nobility to this class of settled freemen under contract that they are establishing.
Now, they are in these peat bogs. The way a peat bog works, roughly... Now, I’m no soil guy, so please bear with me from just my bare understanding. You have a peat bog. There’s a lot of water inside the peat.
It forms this kind of mound. You start to drain the mound so that you can farm it. But then also the peat bog will, over time, start to actually lower beneath the water level. So you get these big, rolling Dutch hills that we can probably all imagine from various landscape paintings. As a result, and because of constant flooding from the ocean, you need to build a pretty sophisticated system of dikes and water irrigation management, and there is no nobility around in a substantive enough way to do any of this from the top down like they end up doing in China.
So instead, it starts to emerge from the bottom up in a way that is somewhat reminiscent for me of some of what Tocqueville writes about the management of early American townships. So essentially, people would start to form these water boards. Some of the water boards that were formed in the 1200s are still extant today. Essentially, the way it would work, you and your neighbors would get together. You would say, “Well, you have these responsibilities in your portion of the land to maintain your own system of dikes.”
The whole neighborhood would go and inspect the system of dikes together, and if they found problems, they would fine people for the problems. If there was flooding, the township had the right to—Essentially, you would pay fines because the floods would spread obviously into your neighbor’s land, and you would pay those fines. And if you couldn’t pay those fines, they would seize your land. So this is a system of constant collective drainage. They eventually are starting to, in the 1400s, they’re building these windmills, which are essentially constantly draining land in a big chain that pumps it up to essentially a sluice system that runs it to the sea.
So it’s really quite a sophisticated collective drainage system that has emerged from the bottom up and formed something that is reminiscent of a lot of what will become modern systems. So there’s a body of collective membership. You have to participate in it to participate in the town’s collective enterprise and culture. They collect dues, manage their own affairs, and settle their own disputes rather than having their disputes settled for them by a lord. And this infrastructure of local collective trust around solving problems together, combined with the relative prosperity of the land, starts to build a very powerful economic engine that goes a little like this.
Peat, cheap energy and light industry (09:55)
Now, a very interesting thing starts to happen with the peat bog, which is you farm it and it’s sinking, and eventually it stops essentially being effective soil, and it starts being very effective grassland. So you sort of farm your way through the peat, and the water table gets too low. And again, I’m not a soil guy. All I can tell you, eventually it stops working very well as very productive agricultural land, and it starts to become grassland, but it also starts to become just a lot of peat that you can scoop out of the ground. Peat is basically proto-coal.
It is a lot less efficient than coal, but it’s literally just in the soil everywhere, and you can take it out of the ground and you can burn it. What this means is that the Dutch Republic... Well, this is long before the Dutch Republic, but the Netherlands has energy costs that are something like a third the rest of Europe. To give you an impression of what this means for their economy, there were a lot of things you needed to do in kind of the medieval, Renaissance, early modern world with energy. You needed a lot of energy to brew beer.
Obviously, the Dutch are very famous still for their beer. You needed energy to produce a lot of salt. You need energy to make steam boxes, and the steam boxes are how you bend the planks of wood to form ships. It’s like, well, they’re curved planks of wood. You do that in a steam box.
And also really crucially, you need a lot of energy to make lime and to make bricks. And this allows the Netherlands to have a much, much higher rate of having everything made by brick, and this essentially—they have fires and problems with fires, as we still do today, obviously. But many of you will be familiar with the great fires of London and so on and so forth, where you just have a huge amount of capital accumulation go up all at once. The relative quantity of bricks help quite a lot with that. And then also because as we saw earlier, it is a bay area around which because there are a lot of for this economic world at the time, there are a lot of essentially light industry consumer goods that they are producing that have high market value.
As their land becomes less arable and less grassland, they’ve also started doing a lot of pasture, and they’re selling Europe a lot of their butter. So you have an economic density of light industry that then because it’s in the bay area, both can trade very effectively with itself. Everything is moving between barges throughout the whole bay, which I’ll just flip back to. So this area is just a constant hub of internal traffic. The movements via water costs are about the 10th of what it would’ve cost everything to move by land.
So people are moving across. People are moving their families across. People are moving their businesses across. People are coming in and storing things in one place and moving to another place. It’s a very attractive location for trade because basically you can make a lot of stops instead of just making one and doing a lot of very quick arbitrage.
At the same time, their quantity of salt that is being powered partly by the peat production and also is allowing them to start to get a lot of herring in the North Sea. The herring forms a kind of shockingly large amount of Northern Europe’s protein consumption at the time. And also, they’re starting off of the back of all of this, they’re starting to do bulk shipping in all of the North Sea. So the general picture here to imagine is that light industry is getting into a kind of wheel work relationship with trade, where you’re doing more trade, you’re bringing in more money. It’s capitalizing your light industry.
And because you’re getting more efficient at trade than everyone else, you are starting to dominate your competitors in that area. They’ll start to essentially just outprice the Hanseatic League, and everyone is moving to the cities, and things are urbanizing very, very quickly. So by 1514, they have a rate of urbanization that England will not achieve until 1851. And everything that implies about the labor markets in the cities, the relatively, the vastly higher degree of specialization, so on and so forth. They develop Europe’s first patent system.
And in addition to their patent system, they’re also starting quite early on in the 1500s to teach their own people science in the Dutch language. And so rather than the sort of Latinate dominated, you’re going to schools to learn theology and also the natural sciences, they are giving just a lot of craftsmen scientific training and engineering training, and also making it possible for them to publish their findings in a patent system to make it replicable rather than the older medieval world, which has a guild system in which you keep your secrets, and if a member of the guild tries to sell the secrets to someone else, the guild will literally kill you. This happens all the time in the medieval world. The guild has to just protect its own technology because there is no effective way for you to share it with everyone and make money at the same time. The Dutch, for reasons that are arguably tied into a culture of public attribution and trust, and we all know that this thing is yours, and you get rights and responsibilities that come alongside of it.
And in these water irrigation systems, there were these big, really effective census-keeping records that anyone could look up of who owned what land. So essentially, it was just the best tracked and managed land in all of Europe that helped them bootstrap a culture of local press. At one point, they will start to build more advanced sawmills that run off windmill power that some random engineer, again, with no formal university training at the time, just created, and this is tying into, well, now your shipbuilding costs are much cheaper, and the wheel of innovation just drives forward. They’re also importing all of their food basically at this point. They export herring, but they are importing a ton of grain from the Baltic.
And they have about 1.6X, roughly, GDP per capita, 1500’s kind of fake, but that’s a rough sense of where they’re at. They, in the 1500s, are developing life annuities and insurances. So if you were a man, you’re going off to a merchant voyage or something like this, you could essentially buy a package that the state was kind of supporting also, that would continue to pay off. They also are starting to develop very effective systems of public debt. So they developed the first war bonds.
The first war bonds (17:13)
They developed the first war bonds because at this time, the Netherlands is under control of the Spanish branch of the Habsburgs. The Spanish not only control Spain, they also come to control Portugal and most of northern Italy, but the Netherlands is their wealthiest province by a long shot. Charles V is, as monarchs in Europe are doing all the time in the early modern era, they’re like, “Wow, I need a lot of money for this new kind of modern warfare. You have to make a lot of cannons. You have to conscript all these people. You have to pay all these mercenaries. It’s very, very expensive. Hello, Netherlands, please give me a lot of money.”
Now, the Netherlands is like, “All right, we’ll give you your money.” But rather than just taking the hit, they decide to turn it into essentially the first war bonds. In a way that is compulsory, they give everyone... They’re like they force everyone and business holders and so on.
Basically, the state is saying, “I now owe you guys, my population, money.” But they vote themselves a series of excise taxes on their consumer goods bundle, basically, on beer and a bunch of other things. So now these war bonds are tied legally in a culture of high public trust to sustained and trackable sources of revenue. The result of this is that after about 10 or 20 years, it goes from being compulsory to being competitive, and all the Dutch people want to buy war bonds because, in fact, they’ve created a very effective structure of public trust whereby clearly tying, it’s like the money to pay for this public debt is going to come from somewhere and somewhere clear, so you will get paid back eventually, and people come to have trust in this, and then they start to buy it like a regular financial product. And this is built off, again, the Dutch had been evolving kind of a local culture, systems of insurance on annuity and debt locally.
So in townships, even they could have taken on debt, and it’s like everyone collectively is voting, “Well, we want to start doing these kinds of expenditures. Collectively, we’ll make a plan to pay for it in the long term.” At the same time, Dutch financial power is becoming such that the privileges of the nobility are becoming much more titular. They still definitely exist as a very strong social class and a very strong kind of social mercantile class within the Dutch Republic, but a lot of minor nobles are just getting flat bought out. Townships will buy the lord’s estate the moment they’re in any kind of financial trouble, and the package of rights that come alongside of it collectively.
Which is a lot of time in France, you see wealthy merchants buy into things individually, but basically, the power of the township is, through monetary and legal power, is even further eroding what was already a very weak feudal structure in the Netherlands. There’s also other really interesting things. Like, for example, the Netherlands evolved a system where people could buy their way in to the law system of the city. So in the 1400s, there are these basically instances where you are buying your way into the protection of a city, and then the city says, “No, actually, this guy who lives in the rural Netherlands is under our protection. You have to go through our law courts.”
And then the nobles who remain are like, “That doesn’t seem right.” And they have little local squabbles over it, which the cities mostly win, although it’s worth noting that the nobles are still bought into a system of dispute resolution, so it’s pretty rare that they really go to the blood with these things. But still, there is an enormous amount of concentrated collective power. Now, in the Netherlands, this is part of something that is actually happening kind of all over Europe. There’s a growth of various collective power, cities within the HRE gaining more rights, the Renaissance going on.
But in the Netherlands, it is the strongest and tied to more effective collective systems of trust and also more effective financial and economic markets. Okay, so the Netherlands is very rich. The Habsburgs are running this large empire that is at war kind of all over the world. They’re at war all the time. They are fighting the Ottomans.
They’re fighting the French. They’re fighting the English off and on. It is a very large, very messy, and in some ways, not very well-organized empire, particularly in Spain. So the empire is taxing the Netherlands more and more. The Netherlands, for a long time, essentially built off of these rights that they expanded through their economic wealth.
For a long time, had it be such that basically, every monarch who came to the throne had to reaffirm the rights of every single township in the Netherlands. Individually, the king had to send some guy to be like, “I agree again to your rights.” And then that township would reaffirm their loyalty to the king. So this is not how it’s supposed to work. If you want effective centralized power, everyone’s like, “We agree, you’re the king.”
And then you’re like, “I, in my mercy. You can keep having your rights.” So the logic is reversed. These people already believe in their own right to freedom, is basically the key point. Protestant Reformation kicks off.
Reformation and repression (23:10)
This is one of the largest drivers, in addition to kind of the Dutch civic culture and the economic situation. A lot of people are being burned at the stake. People are being killed for owning a book. People are being drowned in a mockery of... You would have Protestant groups that would get baptized again, and the Catholics would be like, “No, don’t get baptized again, and we’re going to drown some of you alive, and we’re going to call it a third baptism.”
So not a great time, especially for people who are quite rich and quite prosperous and quite used to their own freedom. Okay, so Philip II, where all of this starts to kick off. Charles V, who I don’t remember if he came right before Philip II. Does anyone know? No, it’s all right.
All right. Philip II, shortly after Charles V. Charles V was actually Dutch born and Dutch speaking, and so had a closer relationship with the Netherlands. Philip II doesn’t speak Dutch at all and is effectively Spanish in culture. And the degree of religious persecution that he kicks off in the Netherlands, basically, it is a question of control and paranoia over Protestantism. Habsburg Spanish Empire is in pretty deep financial trouble, and they just need the wealth of the Netherlands.
It would be a total strategic loss, and so they choose a policy of repression and control, and they go to try and purify the faith. They build basically a micro-surveillance state. Some of you may have heard some discourse about certain elements of the Spanish Inquisition in Spain being overblown. I don’t know if that’s true or not, but what the Spanish were doing in the Netherlands was they were importing a lot of people, even down to the local level, both military and religious officials, to try to stamp Protestantism out. This does not work out very well for them.
Okay. So first, there’s some economic problems, basically due to a war between the Danes and the Swedes. There’s not enough food, despite the fact that they’re quite prosperous otherwise. The grain trade dries up for a moment. And there’s all of this religious persecution happening.
The Beggars (25:41)
And so a group of people, who will come to call themselves the Beggars, a group of nobles, get together, who at this point have become... They’re a sort of aristocratic republican class, in a sense. Don’t think of these people as normal feudal nobility. These people are all highly mercantile. They are all highly plugged into the civic life of their cities and their townships, but they are still a bunch of the leading representatives, and kind of people who are used to running their own military affairs and taking things on their own initiative.
So a bunch of the aristocrats get together and they say, “The Spanish are ruling us in a very bad way, and we, being people who basically do believe in process, we’re going to go issue a bunch of complaints to the governor of the Netherlands that the Spanish have appointed,” and the governor is told by her advisors, she is told, “Don’t worry.” This group of nobles who all show up at the governor’s palace all at once, they have their list of complaints. Her advisors tell her, “Don’t worry. These people are just beggars.” So the Spanish have reversed the logic, and they’ve said, “No, actually, now you don’t get to protest about these rights. You have to come to us. It has to be on our terms. And no, you can’t have more religious tolerance or more effective local governance.”
At the same time as this is happening, the Protestants are starting to get more and more organized. They don’t have any churches of their own at this time, but they start to meet in large open-air sermons that are protected by, essentially, the militia of these local towns, and they’re gathering tens of thousands of people in giant crowds. Huge kind of revival-type energy, where they’re starting to more and more openly thwart the authority of the Catholic state. And then there’s a big push of organized iconoclasm, which really, really, really spooks the Spanish, and is in some ways reminiscent of some things that will happen in the American Revolution, if on an organizational level rather than religious. What happens is they systematically, and basically without direct violence, strip a bunch of churches of what they would’ve understood to be the gaudy idolatry of the Catholics.
So they are paying crews of workers and construction people. It would be like, imagine that a bunch of people in hard hats all just come in that door, and they’re like, “All the paintings have to come down. This has to come down. The eagle statue has to come down.” And there’s an implicit threat of violence in that, but they’re also carrying it off without...
A lot of iconoclasm in other places like Byzantium, there’s murder and burnings and all of that. This is an organized, targeted political push to say that we, as a people, aren’t doing this anymore, that has a lot of very effective leadership behind it, and essentially, you might say cadre control. Now, the result is that they get a new governor, the Duke of Alba. They send a lot more Spaniards in. There is something that is called the Council of Blood, is how the Dutch remember it.
In the Council of Blood, basically, Alba runs a huge series of trials. Alba even starts killing moderate Catholics who argue for toleration. So this is the sort of stuff you start doing when you’re losing control and you put the wrong people in charge. That’s Egmont and Horn are moderate Catholics who are loyal to the crown, and are like, “But maybe we shouldn’t try to stamp all the Protestants out.” And he has them executed.
There are tens of thousands of trials over this time period, and he also essentially tries to put a 10% sales tax on the whole of the Netherlands, because they need a lot more money for all their wars. So back to the Beggars, because basically those group of nobles who were called the Beggars were like, “All right.” As they often do in history, people take insults and they turn them into points of pride. They say, “Yes, we are beggars.” They say that they are ready to become beggars in their country’s cause.
And so this group of people, who by the way, were extraordinarily wealthy, some of the wealthiest people in all of Europe, they had the most to lose, collectively said, “We are willing to risk it all.” Not unlike the Founding Fathers, who pledged their lives, fortunes, and sacred honor in their country’s cause. They say that they’re ready to lose all their wealth, to be driven into exile, and they start to put this into practice. At the same time, the Protestantism thing is really kicking off, and after a period of about 20 years, it goes from people... For a long time, and it’s often the case in revolutions against monarchies, that there’s a period of pretense and insurrection where everyone kind of goes, “Well, actually, we all love the king. That’s our big point of consensus. Everyone loves the king. His ministers, though, have corrupted him and led him astray.”
If you read enough history, you just see this pattern all the time. So for a long time, the Dutch are doing this thing where there’s like a insurrection and people are plotting, but all of them are saying, “The king is great. Everyone loves the king. How could you not love the king? But he’s surrounded by evil ministers and he doesn’t know what’s happening here. So we’re just revolting against his ministers.”
After the Beggars start to kick off and in combination with a lot of Protestantism, they start to say stuff like, “Rather Turkish than a papist.” So they’re saying that they would rather have everything be conquered by the Ottomans. Obviously, the Habsburgs are spending a lot of time fending off the Ottomans. So this is a really crazy thing to have happening. Martin Luther wrote “A Mighty Fortress is Our God” in the context of Vienna being besieged.
So even Martin Luther, who thought that the Pope was the Antichrist, still thought that the Turks were worse. And so the Dutch being like, “Actually, we hate the Spanish even more than Europe’s gigantic big bad.” The Beggars start to be driven into exile, but they are an extremely sophisticated group of naval merchants who already, through trade, control one of Europe’s largest fleets. So there is a big emigration of an armed naval diaspora. And all these people turn into a rowdy band of privateers who are harboring in other Protestant ports throughout Scandinavia, throughout northern German principalities, and off and on again in England.
And they start predating on all Spanish and Catholic trade. And so they are getting more ships. They are building up more money. They are getting organized into a serious naval force. And the outlaw prince, the Prince of Orange, they start calling themselves the Sea Beggars.
You’re a Spanish vessel, you get ambushed by a few Dutch ships, and they come on board with a begging bowl, and they’re like, “Would you please contribute to the cause of the poor, oppressed Dutch?” And some other guy has a gun.
The Sea Beggars take Brielle (33:05)
William of Orange starts issuing letters of marque under his own name as a bare legal pretense for what they’re doing. And then on April Fools’ Day, which in the Netherlands, I believe, they do tie to basically what happened. The Spanish garrisons are constantly dealing with essentially a lack of organization. They’re not being paid on time. There’s all kinds of communication problems.
They’re trying to manage a war that is in the Netherlands. They’re having problems projecting power by sea. The Sea Beggars are starting to win major naval engagements directly against the Spanish. So they’re having to march up the Spanish road from Spain to the Netherlands. As a result, the command and control situation is just very, very bad.
Sorry to go in reverse for a moment. So I am describing the Sea Beggars. They take Brielle. They take a mid-sized port town because the Spanish, just one day, garrison got their orders confused or just decided to fuck off. And then some Sea Beggars literally just noticed and got word from other fishermen that there was no one there.
And so they swooped in and they captured a town. And the moment one town fell, revolt really spread like a wildfire. And so within about a couple of months, the revolt gets organized. Amsterdam is still royalist. I want to take here and pause for a moment on how crazy this whole thing is.
A tiny country against a superpower (34:34)
So if I remember my facts and figures correctly, the Dutch Republic at this time, which is not unified, the revolt is maybe not even half of it, is maybe a million and a half people. The Habsburg Spanish Empire is a honest-to-God superpower. It is the strongest kingdom in Europe. The Ottomans are the only power relevant to them besides the Chinese. They’re the only people who are close.
Obviously, the Chinese are very far away, do not matter that much to Europe at this time. They control northern Italy, which is very, very rich. They have both Portugal and Spain, as a result, are also tapped into all of their colonial possessions. And this is the time when the conquistadors are just bringing back incredibly huge amounts of gold and silver from the New World. And also beginning to tap into the spice trade, which was the single most important part, essentially, of the global world economy at that time.
So the Spanish have the means to make money hand over fist. The Spanish tercios are, despite some problems with morale and management, incredibly fearsome on the battlefield. They’ve built one of the most modern systems of how to show up to the battlefield in Europe at the time. Obviously, the Spanish have been trying to project power everywhere, the Spanish Armada, so on and so forth. They are an honest-to-God superpower.
And the Netherlands is tiny, and they are not well organized. Locally, they’re well organized, but as a collective, not so much at this point. And two dozen towns, a couple cities, decide to go all in on the revolt. I think this is a remarkable act of courage, and it’s worth dwelling on the mentality that is required for people to essentially believe that their little tiny portion of the world can raise the flags of revolt and take down the greatest power at the time, that probably had something on the order of 15 plus times their population. All right.
So shortly after the Sea Beggars take Brielle, they hold their first parliament. And William of Orange, the first, is going all in. He is the George Washington equivalent, in some ways, of their time. He essentially puts all of his money into revolt. He goes bankrupt.
He is taking out an increasingly serious, dubious series of loans. Three of his brothers die, and the Habsburgs put an enormous sum on his head. Some people say that this is the first public bounty in Europe that’s posted. We have those FBI most wanted list things today. This is the Habsburg most wanted list.
William of Orange right at the top of it. And so he is going all in on the cause of Dutch independence. Now, over the around 1570s, you have essentially a series of Spanish victories on land. The Dutch have never been in a position where they’re doing highly organized state level... So they’re winning at sea, but the Dutch are losing at land.
Breaking the dikes: Alkmaar and Leiden (38:29)
But then they have their first instance after losing several siege, after some big massacres that kind of galvanize the rest of the Dutch into action. They have their first big win, where Alkmaar is being besieged, and some bright guy says, “Well, we have all these dikes that are keeping all the water back, and we know exactly how they work, meaning that we can direct water to exactly where we want water to be.” And so you have a city, walls up on a hill, and they break a bunch of the dikes, and they flood the Spanish who are besieging the town. I don’t know. How many people here have been camping when it’s been too wet, or you’ve been slightly underprepared?
Has anyone else been in that position? I’ve been there. A few of you. Now, imagine that the water’s up to here, and all your grain supplies are spoiled, and your gunpowder is spoiled. Basically, you just have to leave.
It’s all over after your siege camp gets just seriously flooded by the Dutch. And so this is their first major reversal, and after a couple other reversals, the Duke of Alba, who was doing the Reign of Terror earlier, gets recalled. And then there’s an even bigger repeat of a very similar pattern. Leiden, a major city at the time, is besieged. A third of the city starves.
Eventually, after a lot of deliberation, the city is holding out. They’ve sort of been reassured that they’ll get help several times, but the Dutch still do not have their stuff together enough on land, so they are getting beaten back. They cannot relieve Leiden. In order to flood Leiden, they will have to destroy literally generations of work. So people talk a lot about the different incentives of people in different economic positions, people being just tied to different kinds of economic productivity, work infrastructure they’ve created in the past.
But the Dutch leadership collectively decides, after a great deal of deliberation, that they are going to break the dikes in a much, much larger way, which they do. And they break so many dikes that a large Spanish army, which is besieging Leiden, is after about an eight-month siege where they’ve, again, completely run out of food, is completely flooded. And there is enough water that the Spanish army is attacked by the Dutch Navy which is sailing over what used to be the farmlands and the possessions of people’s ancestors that they’ve all collectively decided to sacrifice to save the people of Leiden, and essentially do right by them. So I want to take a moment here to push back on a narrative you hear a lot, which is essentially like, well, if things are really shitty and people are put through really, really shitty times continuously, and they grow up in a shitty environment, that is what makes people strong. The Dutch are a remarkable example in this time period of a pattern that the Founding Fathers themselves will repeat.
The Founding Fathers were a very wealthy class of people, as was everyone who was initially really pushing the Dutch Revolt. The Dutch, as a people, were definitely the richest and the most... They were eating butter and beer. The English had some insult for them, but it was basically, they called them butter barrels or something as people because they’re eating butter and maybe they’re all getting a bit fat. And this is in the 1500s.
In France, you’re still getting huge starvation events. The Dutch are far and away wealthier than everyone else. It’s part of what makes them a country from the future, which is that there’s going to be more than 100 years between this time period and when the rest of Europe, even well into the 1800s, having things like the Irish potato famine, and the Dutch are just chilling. There’s a period of about a few hundred years, basically, where they have zero deaths from famine. Just zero, which is insane.
None of their contemporaries are hitting that measure as well. So these are not Mongol warriors hardened on the steppe. These are not Dark Ages barbarians who had to take everything they’ve ever earned. These are extremely wealthy bourgeoisie people who like to make really nice paintings and beautiful windmills and have a kickass navy. And have only recently been kind of introduced to this kind of grueling siege warfare that has plagued a lot of Europe for a long time, and starvation, and mass sacrifice.
And a third of the city was able to starve without the city deciding to surrender, which would’ve been its own collective decision because, again, they had effective republican structures. So like the Founding Fathers, who went through a really shitty time in Valley Forge and all of that, extremely wealthy people were, because they had a collective dream and collective trust, able to endure circumstances that are in the upper class of as bad of things as humans generally experience throughout history. So I just wanted to take a moment to emphasize that no matter what people tell you, you’ll hear all people kind of, “People today are too decadent to do anything. We’re too soft.” Softness is not the issue.
Softness is not the issue (43:32)
The butter is not the issue. It’s whether or not you believe in something, if you ask me. All right, Leiden is saved. A side note. Many of you know I’m interested in universities and their history.
One of the most important universities in Europe will come to be the University of Leiden. Leiden is essentially told that you can either pay no taxes for an indefinite period of time, like maybe decades, or we’ll build you a really kickass university. And the people of Leiden are like, “We want the really kickass university.” And they get special privileges, essentially, to guarantee the freedom of the university, and it goes on to be the best place to be in Europe at that time. There’s a picture of some Dutch urban life.
Okay. So things start going really badly for the Spanish. They’re still grinding out the war. Again, this war goes on for really a long time. In 1575, despite the fact that they have huge state incomes, they’re just not very well managed at all, and Spain goes bankrupt.
Spain goes bankrupt (44:51)
As a result of their bankruptcy, their payments to a bunch of their men are severely delayed, and Antwerp, which is in the hands of the Spanish, is sacked by the unpaid troops of the Spanish Empire.
This sack essentially permanently solidifies all of Dutch solidarity. There are still a lot of people who are on the fence. There’s still a lot of Catholics in the Dutch Republic. But at this point, everyone’s like, “The Spanish just suck, and they have to go. They sacked a city they control.”
And then, as a result of the fall of Antwerp, a lot of capital and a lot of immigration happens to Amsterdam. There’s over 45 different mutinies over the course. The Spanish are failing their payday all the time. The Dutch, who have effectively... I’ll explain this in a moment.
The Dutch, who have a very effective... Again, they built this war bond system. The Habsburgs made them build the first war bond system in the world. Holland, by itself, just one province, is floating as public debt that everyone wants to buy into, about 58% of the entire Dutch cost of the war. It’s all publicly funded debt that people are like, “Yeah, this sounds like a great deal to me.”
Tiny little Dutch fighting the Habsburg Spanish Empire, which controls most of the New World and a billion other things. The [inaudible] of their day were going crazy for this. All right. So your tax dollars and somehow also your tax dollars. Here we see this is a Spanish galleon, the sort of thing that would’ve won the battle of Lepanto, getting absolutely, the kids would say, mogged by a giant, much more advanced Dutch ship that is just running it straight over.
Selling the enemy its supplies (46:53)
Now, here’s what is happening as part of the crazy financial situation that the Spanish and the Dutch have found themselves in. The Dutch really like money. They still really like money. And they also really need to continue to fund their war effort. And so what is happening is that they also make a lot of goods that the Spanish really, really, really need to buy.
They even make goods like naval supplies, like highly manufactured rope and iron and just everything you need to build a real navy. And they’re continuing to trade with the Spanish. They’re continuing to trade with the Spanish, while Dutch privateers are also taking cargo from Spanish ships. So what is happening is that the Spanish need, not just for their war effort with the Netherlands, they need this material for all of their wars. Like everywhere, all over the world, including in the Indian Ocean.
And so they’re still letting people trade with the Dutch. And so Dutch merchants are granted by the Dutch state a special license that they have to pay a lot of money for to sell goods to the Spanish. And then those same merchants are, with the money they’re making from the Spanish, who are absolutely desperate for these goods, those same merchants are buying the war bonds, which are selling the Dutch Revolt. So the Spanish are having to buy Dutch goods from Dutch people who are putting that money right back into the financial infrastructure of the Dutch Revolt. Hence, your tax dollars as a Spaniard is this poor galleon getting absolutely obliterated.
This Dutch ship also may be paid for by your tax dollars buying the naval supplies which were used to make that galleon. Not an ideal system. Okay. Yeah. Buy war bonds.
We talked about this. Over the course of the war, the Dutch credit rating just keeps... It goes from like, America got downgraded a while... That was a while ago that we got downgraded on our credit bureau. It’s like the Dutch start at maybe a B, and then they start to get to like S++, as the war is going well and people are like, “Wow, these people pay back their debts all the time, every time.”
And this is at a time when all of the other major powers in Europe just are constantly defaulting, and they’re constantly like, “Sorry, merchants. Sorry, Jews. We’ve decided it’s too inconvenient to pay you back.” And so the Spanish are having to take out these 12, 20% interest rate loans while Holland is paying 3%. It’s really an absurd degree of...
They are inventing both an economy and a war machine, which not unlike ours, is continually supercharged by public debt, which in their case was relatively well secured. Okay. They create their first constitution. They decide that the king is, in fact, formally fired. But they’re also like, “This war is still dragging on.”
Firing the king (49:45)
The Spanish still have all their gold and silver mines and all their troops. So they’re like, “We don’t know if we can win the land war by ourselves.” And they start offering the crown around Europe. They’re like, “Would anyone like to run us, obviously, with a bunch of autonomy? We’ll give the crown to you.”
And everyone’s like, “That seems like too much of a hassle. Also, maybe we don’t want to pick a fight right this moment with the Habsburgs. We have other problems to deal with.” So they pass on it. And then William I, as is maybe suiting to the leader of the country from the future, becomes the first head of state to be killed by a handgun.
He is assassinated by someone who is trying to claim that 25,000 crown bounty. So Antwerp, again, we’ve already covered that. Okay. William of Orange dies, but the machinery carries on. Now, you guys are going to appreciate this.
The Dutch are a country of engineers who are also very interested in the past. I think this probably describes a lot of people in this room. They decide, “What are we going to do? We’re going to figure out how to do war on land.” How does one do that?
Maurice and the Roman playbook (51:06)
You study the greatest Europeans to maybe ever do war on land, the Roman Empire. So Maurice, who is engineering a lot of the new mechanics of the Dutch military, has a cousin who is a Latinist, and his cousin starts translating these old Roman military manuals and sending them to Maurice being like, “Hey, there’s this cool thing called the countermarch. Hey, they really effectively moved all their guys in these blocks of squares that could reorient in any direction. What if we did that?” And so the Dutch build one of the first truly modern...
Essentially, all of you will be familiar with the image of the Redcoats. The Redcoats can form squares. They can point in every direction. The Redcoats are a descendant of...
The English do figure some of this out on their own also by reading old Roman military manuals. But the Dutch are going through the same process and build a modern army with muskets that is consciously modeled on the Roman legions. And they also start to give everyone, because everyone in the Netherlands is basically literate, they give them all these drill manuals. They’re like, “How do you be a soldier? Here’s a really nice textbook. Here’s all the moves you make. Here’s how everything works.”
They’ve got a repo for that. They’re like, “Please consult the instruction manual.” And over time, basically they build a military school, and it trains essentially the Protestant officer corps of everywhere. The English are learning about the model. The Swedes are learning about this model.
Officers from all over the Protestant world become educated in the Netherlands as they’re doing with many things. They’re engineering and they’re reverse engineering. All right. So the war drags on for a long time. Eventually, the Spanish just cannot pay for it anymore, and things are going less and less well.
They have other problems to deal with. They make a truce. The war reignites. It’s called the Eighty Years’ War. It has two periods.
The truce lasts for about 12 years. We’re mostly going to skip over the Thirty Years’ War. That could be 10 talks by itself. But over the course of the Thirty Years’ War, there are some setbacks, but eventually, a group of Dutch privateers manage to capture the entire Spanish treasure fleet, which probably is 40% of their income for the entire year or something absurd like this. So it’s a little like in the third Christopher Nolan Batman movie, and they have Bane hack the stock market.
That’s like the equivalent of what has happened to the poor Spanish here. So that’s a huge blow for them. And the Thirty Years’ War, giant mess, lots of people die, and they call it quits. All of Europe by 1648 was like, “We’re calling it quits. We’re done with that.”
So that’s the end of their revolt against the Spanish. And so now we’re getting into the end period. I know this is running a little long, so thank you all for your patience. All right. We will briefly talk about just the amazing, incredible world the Dutch happened and then how all of these cool financial institutions and insurance and patent systems and incredible banking and public debt gets exported to the rest of the world.
The country from the future (54:36)
So in 1669, there are streetlights everywhere. There’s a real fire brigade with hoses and pressure and everything. In the newspaper, which everyone was reading because everyone was literate, there would be the moving... Basically, their equivalent of the green stock ticker. Everyone in the newspaper was reading about moving insurance premiums, everything like this.
They have more than twice France’s literacy rate, basically. They’re shockingly more urbanized than everyone else. And they have no famine deaths for a long time. Every household in this random town in Delft has 11 paintings. I don’t know if I...
I maybe have about 11 paintings in here. And so this is the Dutch average. And travelers are shocked to see that things are secure enough that women are traveling the streets totally unaccosted. There are places in America where that’s not really the best idea. And in all of the Netherlands, travelers from Europe are like, “Public safety, paved roads everywhere, streetlights everywhere, fire brigade, no famine, paintings everywhere, financial debt.”
And it’s like people are not reading about the stock market in England in 1650. Not yet. Okay. So the advantages of liberty. They secure their own internal religious peace.
There are a lot of Catholics. They can’t meet publicly, but they’re basically allowed to... They’ll build these attic structures that everyone knows is a church and knows exists, but they just keep it on the down low. So there is religious peace. Everyone who is having a hard time anywhere else, for example, some of those Jews that the Spanish were like, “We would just like your money to fuel your war,” all end up in the Netherlands, along with people fleeing from catastrophes from all over Europe.
A bunch of famous philosophers end up there. They build the first joint stock corporation. So the Dutch East India Company, essentially, they have an ousted director for political reasons, and then the ousted director says, “You know what I’m going to do? I’m going to organize the first short squeeze.” And so he gets a bunch of his buddies together because he’s pissed off, and they organize the first short squeeze.
And after that, the Dutch are like, “Well, we’re going to regulate short selling.” And they also pause and reverse a bunch of the trades, as happens when South Korea tanked recently and all of this kind of thing. So the Dutch have both the first organized bear raid and the first time the government steps in to be like, “You know what? That doesn’t quite seem like what we want to have happen.” They have insurance banks.
Everybody can get loans at 4% interest rates at a time when monarchs all over Europe would love to get a loan at a 12% interest rate. And they become Europe’s warehouse. So over time, the financial trade and system of storage and organization really explodes to the point where the Dutch are storing, people will describe it as forests’ worth of lumber that they won’t sell until the rest of Europe needs it. So they have so much wealth that they are directly investing it into just gigantic warehouses. Basically, they have Costco for the rest of Europe that they only let people buy when the prices are right.
And this becomes a major future engine of their economy. So just a level of sophisticated capitalism and financing that the rest of Europe cannot match at this point. All right. So some things happen. In 1667, those of you familiar with your naval history will know that the British are occasionally a fan of big naval sneak attacks like they do on the Danish during the Napoleonic Wars.
War with England (58:24)
They do this a few times throughout history. They’re just plowing. They have the name Perfidious Albion in Europe. This is one of the reasons. The Dutch do it to them first in 1667.
Essentially, they managed to sneak up on the British fleet and destroy it at port. This makes the British, the English, really, very, very mad. They fight a series of war with the English, despite initially being on relatively friendly terms. Essentially, they are competing way too much over trade, and there are a bunch of other issues. They still haven’t figured out the whole plague thing.
And then, so William I of Orange, during his life until he was killed, concentrated an enormous amount of power. And also because he was a martyr, essentially he had a micro cult around him and a whole political party of Orangists, whose position was basically, we should be ruled by the family of Orange. They were competing with a relatively republican faction who had control during this time period and got people to agree, basically. Never again a prince. We don’t want to be ruled by one man.
We are republicans. And so now we get to one of the really fun parts. Thank you all for sticking with me. I’m glad I get to talk about this. There’s a child of prophecy.
William III, the child of prophecy (59:46)
William III, son of William II. William II dies pretty early. We can basically, unfortunately, just skip his life for now. He is born eight days after his father’s death. Again, there’s this weird Dutch civic nationalism/Protestant cult, which is literally starting to say stuff like, “This child is going to save the entire world.”
There are Protestant preachers who’s like, “The child of prophecy has been born.” This is the true heir to his grandfather. It’s really some Dune vibes is what you should be getting here from the religious sentiment of the time. And so because they’re really freaked out by this kid, who is also a grandchild of one of the Stuarts and therefore very importantly, has a claim, however light, on the English throne and also familial connections. So the English, who they still try to be friends with, they have a real frenemy relationship throughout this whole period, to really just put a brief note in it.
They’re like, “We’re going to make this kid a ward of the state. We’re going to raise him to be the best republican we can. We’re going to teach him a whole bunch of interesting things. And we’re going to try and set things up so that he’s just a really good, loyal, patriotic citizen who is very useful and very loyal to the republic. We can’t kill him. We can’t get rid of him. We can’t put him to the side. He’s a really important diplomatic asset.”
So the leader of the republic, de Witt, ends up actually mentoring this kid one-on-one. People say it was actually a pretty cordial relationship, but again, the idea... They didn’t have as many fantasy books at the time. This was less obvious to them back then. The idea was that this kid was just going to think of himself as a normal, loyal republican citizen.
The Rampjaar (1:01:36)
And then they have this thing they call the Rampjaar, the disaster year. The Dutch are extremely wealthy. The Dutch have been kicking ass for a long time. They’ve made a lot of people, including the French and the English and some of their German neighbors, very, very mad. They are attacked by Münster, by Cologne, by the English, and by the French all at the same time.
They have all decided, “We’re just going to divvy up the Dutch. We’re going to take all their money for themselves. We are going to partition them between ourselves.” The English have kind of hatched this pot, in part because they’re very mad about Dutch naval supremacy.
So they’re like... Basically, this is a Dutch saying here. I’m not going to try and pronounce it. The mood in the country is, “We’re totally screwed.” The Dutch, for all their organizational capacity, have no hope.
This is a much better organized France than in the past. This is an increasingly powerful and competent England, combined with their more minor German allies. The Dutch seemingly have no hope of winning this war. But they have their one secret weapon, the water. They drown an even larger part of the country to essentially stop the French armies from advancing.
And all right, now, de Witt. So the country’s melting down. They’re going to lose the war. They’re fending off the French only by having created a large flood. It’s not going to last forever.
Girard and the death of de Witt (1:03:07)
They blame de Witt for it. Who here knows who René Girard is? So to just put... Many of you. To put a really short pin in it for those of you who don’t know, René Girard believed that a lot of leadership evolved as, essentially, you have a sacrificial king.
You have someone who you put in charge for a while, or who... They have certain special privileges. They get to do various things. But the idea is, after enough time or something goes wrong, we are going to sacrifice them, sometimes in horrifying and strange ways. Girard believes that this is a primal model for how leadership is organized, that all leaders are waiting to be sacrificed by the people, and that people have weird primal expectations in their head as a result.
So the most modern people in Europe cannibalize de Witt. They eat him. An angry mob shows up at his house and has been incensed. Some people think William III arranged this somehow or at least got the angry mob together, but it’s never been proven. William III did nothing wrong.
And they cannibalize him. They eat large sections of him. They char portions in the... They still have his tongue and some other body part in a Dutch museum that you can go look at if you so choose. So that’s just a really weird fact that the most modern people in the world, who are all literate and have all these nice paintings everywhere and believe in trust and civic republicanism, get angry enough that they eat a guy.
I still don’t have a very good explanation for that. History is, in fact, stranger than fiction sometimes. If you put this in a book, people would be like, “What?” “The author has some weird depraved thing going on.” All right.
So de Witt gets eaten, and everyone’s like, “Well, obviously, we’ve got to put the child prophecy in charge.” And they do. And the child of prophecy, basically, to make a long story short, he pulls it out. He fights the French to a standstill. They make some big wins on sea against the English during the war, sort of shortly after he comes to power.
William III is... The English offer him. They’re like, “You can control a Dutch rump state, and you’ll be a vassal of England, basically.” And he tells them that he will accept their offer after he has died defending the last ditch that is left in the Netherlands. So literally just, he’s like, “Over my dead body.”
This is, again, on the theme of this guy has a lot of privilege. He’s willing to go all the way. All right. So they pull it out. William marries Mary Stuart.
But William III is fighting kind of continuously off and on throughout this period. We’re about to be annexed by the France of Louis XIV. So France has become much more centralized. France has become much more powerful and is organized under a pretty fearsome monarch and his much more competent coterie of advisors and ministers. William III doesn’t believe that the Dutch can hold up against a modernizing France on their own.
The Glorious Revolution (1:06:25)
So he comes up with the Glorious Revolution, in part as a Hail Mary scheme to save the Dutch from the French. We won’t get too deep into it. Many of you know, Catholic monarch, Protestant country. A lot of people really do not love the situation of affairs. And William III arranges a simultaneous war that is both financial and involves a lot of propaganda.
Again, he’s like the Protestant child of prophecy, remember? And also a lot of outright well-organized military force. So William III uses the Dutch vast amount of money to bribe a substantial portion of the officer corps of England. He arranges for a mass distribution of pamphlets to arrive in England as the Dutch are kind of rolling up, and then he builds one of the largest invasion forces that the Dutch certainly ever put together. Their fleet is like five times the size of the Spanish Armada.
The Dutch in this time period, just to give you a sense for the insane scale that this tiny country of like two or three million people maybe by this point, they have about 40% of Europe’s tonnage. 40% of all of the shipping is Dutch. They have a huge navy. They land, and basically everyone defects to William because he is much cooler and he’s Protestant. All right.
But this is an invasion, but also he knows that he can’t hold the country without the cooperation. Parliament is already quite strong at this point, so he has to make a deal with Parliament to be able to actually effectively control England and then go fight his arch nemesis, Louis XIV. So they make a deal with Parliament. The deal is, is that the Dutch are going to prosecute a land war against the French, but the English will in fact be in charge of the waves. Unfortunately for the Dutch, this starts to essentially handicap their naval power.
English officers are put in charge of Dutch ships. And in a really kind of tragic way, William III sort of sold out his country to save it, and many Dutch institutions under him started to get imported to England. So, the Bank of England, most importantly, basically it’s just a Dutch creation. All of these wonderful financial institutions, they import them to England, and very quickly a lot of Dutch capital pours into the country and funds increasingly expanded wave of English expansion around the world. And they’re forming a bit of an Anglo-Dutch synthesis.
So some of you may be familiar, Royal Society, a lot of England’s own effective institutional norms. Their parliament is a much better put together body. The Dutch always kind of vacillate. It’s like either they have a badass in charge of them, or it’s a bit of a disorganized mess because they built it from the ground up under wartime. The English Parliament is working much, much better than they are.
So they are a more effectively centralized country, with a lot of their own very effective institutions, including very effective institutions of science and innovation, and also spycraft and all kinds of other things that maybe I’ll talk about someday.
And so they start to form this Anglo-Dutch synthesis where before the Dutch come in, the English, like every other crown, they’re bankrupt all the time. They’re failing to raise money for the wars, and the Dutch give them the financial capital, and also because they have become much closer because they’re ruled by the same person, begin to form a unified economic system that supercharges England. Okay. Now we start to get to the somewhat sad end. In his talk, Ben Landau-Taylor talked about how there’s this progressive sense of rentierism that tends to emerge, and people who used to take dynamic risks or be directly involved in the economic engine of their society become gradually abstracted from it.
Why the Republic declined (1:10:20)
As I was doing my research for this talk, I had not gotten up to why did the Dutch Republic fail? Why did they start to fail as a great power? It was a really cool moment to be like, oh, they failed as a great power in part because of the anti-risk-taking and regulation lockdown that Ben described in his talk. A great moment of just hypothesis kind of confirmation. So the Dutch in the early days, they have some of the best debt system in the world.
They know how to trust each other. They know how to organize their affairs. They know how to save money. But money is not their god. They are willing to completely risk all of their fortunes in the name of things like freedom and in the name of their ideals.
And essentially, over time, the Dutch oligarchic class says, “Well, we don’t really want any more crazy risk takers around. Princes are bad for business. War is bad for business.” And they start to shut the country down, and stop it from taking geopolitical action and start to evolve kind of what will become their system of neutrality. They’re like, “Well, we have all this debt. We can’t justify taking crazy risks. We need to make sure things are pinned down.”
So, essentially the Dutch system of innovation, of risk-taking, they end up kind of destroyed and outmaneuvered and controlled by other great powers, more or less for the rest of their history. But their institutions very, very, very, very much live on. The Founding Fathers studied them very closely. Some aspects of the Dutch system they liked very much. Some of them, for example, this whole idea that sometimes you would have an executive leader and sometimes you wouldn’t really.
They decided that that probably was not the best idea in the world. And they built a lot of other systems to kind of help America avoid some of the issues with executive control that the Dutch experienced, along with a number of other lessons, while importing a lot of belief in their structure of civic republicanism. Adams said, while he was, by the way, asking the Dutch for money, he said that the history of one seems but a transcript of the other. Britain, of course, has absorbed their culture of public debt and is using public debt to fund and finance their whole empire. By the time the American Revolution starts, they have more than 100 million pounds in public debt, and this doesn’t really faze anyone. By the time the war ends with America, they have more than 200 million pounds of public debt.
And while America is a great loss, again, this doesn’t faze anyone. People have learned about the sum of future discounted cash flows and things like this. And as a result, the state has managed to stabilize itself radically through public debt. France, however, had not entirely learned that lesson. And as many of you know, the French ran up huge bills that they had no sustainable system to pay over the course of helping America during the Revolutionary War.
And this triggered the financial crisis that led to the French Revolution. So here are some of the things that the Dutch built first. We won’t dwell on this too long because this talk has gone on for a while. They even had scheduled mass transit. They would have all the barges going back and forth between their own bay area would have timetables, and they would show up on time.
So the next time the subway or the BART is not on time, think to yourself, there once was a people who were so well organized that not only could they build more land for themselves, that they had giant early modern barges on timetables showing up on time. This is what social coordination can do for you. It can overcome problems that technology by itself cannot. They had limited liability, a million other things that we all depend on today. Okay.
The lesson of courage (1:14:55)
So I want to end tonight’s talk briefly on a bit of a moral point, again, on this theme of courage. I think in the modern world, people have forgotten one of the core lessons of the Dutch, and everyone believes that all of life is kind of bound up in the play of great powers that is not us, not ourselves, not a people’s own internal capacity. And I would just like everyone to think about tonight what kind of mindset is required to know that the Habsburgs control a huge portion of Western Europe, that they have the greatest army in Western Europe, in the world, that they are pulling over gold and silver by the boatful. They’re projecting power into the Indian Ocean. To know that in terms of your population, in terms of a million other things, that you are quite small, and to have everything to lose and still risk it.
The Dutch built a country from the future, but they didn’t just do so through technology or through debt. Fundamentally, underwriting all of it was a dream that they shared together and the blood and courage and treasure they were willing to spend pursuing that dream. So that is all I have for you tonight. Thank you all for coming.