Economic history of the Dutch Republic

The economic history of the Netherlands (1500–1815) is the history of an economy that scholar Jan de Vries calls the first "modern" economy. It covers the Netherlands as the Habsburg Netherlands, through the era of the Dutch Republic, the Batavian Republic and the Kingdom of Holland.

After becoming de facto independent from the empire of Philip II of Spain around 1585 the country experienced almost a century of explosive economic growth. A technological revolution in shipbuilding led to a competitive advantage in shipping that helped the young Republic become the dominant trade power by the mid-17th century. In 1670 the Dutch merchant marine totalled 568,000 tons of shipping—about half the European total. Pillars of this position were the dominance of the Amsterdam Entrepôt in European trade, and that of the Dutch East and West India Companies (VOC and WIC) in intercontinental trade. Beside trade, an early industrial revolution (powered by wind, water and peat), land reclamation from the sea, and agricultural revolution helped the Dutch economy achieve the highest standard of living in Europe (and probably the world) by the middle of the 17th century. Affluence facilitated a Golden Age in culture typified by the great artist Rembrandt van Rijn (1606–1669).

However, around 1670 a combination of politico-military upheavals (wars with France and England) and adverse economic developments (a break in the upward secular trend of price levels) brought the Dutch economic boom to an abrupt end. This caused a retrenchment of the Dutch economy in the period up to 1713, in which the industrial sector was partly dismantled and growth in trade leveled off. The economy struck out in new directions, including whaling, colonial plantations in Suriname, and new types of trade with Asia. However, these riskier ventures often failed to bring commensurate gains. The VOC embarked on a period of profitless growth. The financial strength proved more durable, enabling the Netherlands to play the role of a major power in the European conflicts around the turn of the 18th century by hiring mercenary armies and subsidizing its allies.

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