------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (January 2007)
Cl??? Lesger, _The Rise of the Amsterdam Market and Information
Exchange: Merchants, Commercial Expansion and Change in the Spatial
Economy of the Low Countries, c. 1550-1630_. Burlington, VT: Ashgate,
2006. xii + 326 pp. $100 (cloth), ISBN: 0-7546-5220-3.
Reviewed for EH.NET by Larry Neal, Department of Economics, London
School of Economics.
Cl??? Lesger, Senior Lecturer in Economic and Social History at the
University of Amsterdam, provides quantitative evidence guided by
economic theory to show that what really mattered at the end of the
sixteenth century for Amsterdam's rise to economic preeminence in
Europe in the seventeenth and eighteenth centuries was its
institutions, not its geography. The impetus for its rise was not
inherent in its institutions, however, but came from the external
shock of the failure of the revolt against Spanish rule in the
southern Netherlands combined with the failure of the Spanish to
reestablish control over the northern Low Countries. Geography played
a role in determining those military outcomes, but not, Lesger
argues, in determining the resulting changes in the patterns of trade.
This argument, familiar to readers of Jonathan Israel's voluminous
writings on the Dutch Republic, nevertheless runs counter to a
tendency among historians to see very long-lived movements in
historical developments that persist despite occasional shocks.
Lesger notes that this has led historians, led by Fernand Braudel and
others including some contemporary Dutch historians, to trace
Amsterdam's rise to preeminence to its geography and especially the
attempts of its citizens to alter and control that geography. Not so,
argues Lesger. The older historical literature was correct when it
attributed Amsterdam's rise to closing Antwerp's access to the
Scheldt. This destroyed Antwerp's role as the major gateway for
transportation networks throughout the Low Countries and forced its
merchant community to disperse.
Amsterdam's elite welcomed the new merchants because they saw no
conflict between the trades of the Antwerp merchants who dealt in
luxury goods, sugar, spices, and naval stores from distant lands and
the trades of the Amsterdam merchants who dealt more with
transshipping these goods on to its regional hinterland, northern
Germany and the Baltic. Very quickly during the 1590s, the new
merchants and their information networks combined with the older
merchants and their continued trade networks to make Amsterdam the
next global entrepot, replacing Antwerp through the eighteenth
century.
The entire region of the Low Countries comprising modern Belgium, the
Netherlands, and Luxembourg was a well-integrated economic unit by
the middle of the sixteenth century. Using the concept of a network
of transportation gateways, Lesger shows that each city had a
geographically determined hinterland and its niche for trade in
specific commodities with the outer world. Prior to the revolt of the
Netherlands against Philip II, Antwerp was the primary gateway
through which the other cities in the Low Countries participated in
the long-distance trades, the so-called "rich trades" in textiles,
spices, porcelain, and luxury goods in general. Amsterdam was a major
regional gateway, but focused on South Holland as its hinterland
while re-exporting a wide variety of products to the Baltic and
northern Germany, with emphasis on low value, bulky commodities.
Overall, it accounted for only 6% of total exports, compared to
Antwerp's 75%.
After the Revolt disrupted trade patterns, especially for Antwerp,
Lesger argues that there was little change in the gateway role of
Amsterdam. Figures on both exports and imports for 1580 and 1584 show
that Amsterdam was still oriented in its trade toward northern and
eastern Europe. Starting in the 1590s, however, Amsterdam's trade
began a vertiginous rise that continued up to 1630. Lesger argues
that rise had to be the consequences of the Revolt. To explain this
sudden and dramatic break with geographically determined trade
patterns, Lesger examines the role of the wealthy merchants displaced
from Antwerp who increasingly fled to Amsterdam. Examining the
records of the Wisselbank by various groups of depositors, he shows
that the new merchants led the explosion of trade activity from
Amsterdam, especially to Russia through the port of Archangel. Both
the new merchants and various groups of North Hollanders led the way
to the Indies, both East and West.
Part II turns to explore the institutional determinants in Amsterdam
that enabled the influx of foreign merchants to occur so quickly with
such dramatic results, and then to be sustained for the next century
and a half. The answer, he argues, came from the ability of the
incumbent Amsterdam elite to extract rents from the increased trading
activity by maintaining political control while levying low indirect
taxes on a rapidly increasing base of trade that did not conflict
with Amsterdam's traditional trade flows as a regional hub, and
indeed helped to expand those trade flows as well.
The rising importance of Amsterdam's traditional transit trade with
the lower Rhine leads Lesger to see most of it increased trade with
the wider world as really transit trade as well. In fact, he argues,
Amsterdam displayed in the early seventeenth century all the features
that modern trade analysts associate with transit trade. For a trade
center to maintain its role in transit trade it must provide cost
advantages to suppliers and customers in the services it provides in
the form of finance, information, and price discovery, as well as in
the physical facilities it maintains for transshipment. Ultimately
then, the secret of Amsterdam's success as the preeminent entrepot
for Europe's long-distance trade lay not in its port and warehousing
facilities for transshipments, but rather in its information
processing facilities.
Overall, Lesger's valuable quantitative study amplifies the
importance of the service sector, which played a very modern role in
establishing and then maintaining Amsterdam's preeminence. Finally,
this reviewer was very pleased to see the emphasis on external and
irreversible shocks for explaining Amsterdam's rise. A similar story,
of course, helps explain its eventual demise in the nineteenth
century and its replacement by London.
Larry Neal is Professor Emeritus at the University of Illinois, a
Research Associate with the NBER and Visiting Professor at the London
School of Economics.
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Published by EH.Net (January 2007). All EH.Net reviews are archived
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