The Evolution of States

by J. M. Robertson

It is easy at this time of day to find fault with De Witt's policy of two hundred years ago, but hard to reckon aright the practical possibilities of his situation. Suffice it to say that the formation of the Triple Alliance of Holland, England, and Sweden against Louis XIV proved a ruinous mistake. France had supported the republic against Spain; and Louis had stood by it when Charles II invited him to join in dismembering it. Yet, after sending its fleet up the Medway and forcing Charles to the humiliating Peace of Breda, and in the full knowledge that he hated the republic which had harboured and criticised him, De Witt was persuaded by Sir William Temple, the English ambassador, to sign, albeit reluctantly,[825] a treaty of union (1668) which made France a strenuous enemy, and from which Charles nevertheless instantly drew back, making secretly a treacherous treaty with Louis, and leaving Holland open to French invasion. It was the bane of the diplomacy of the age to be perpetually planning alliances on all hands by way of maintaining the "balance of power"; and De Witt, while justly suspicious of England, could not be content to drop the system. His excuse was that Louis was avowedly bent on the acquisition or control of the Spanish Netherlands; and that after that there would be small security for the republic. Yet he had better have remained the ally of France than leant on the broken reeds of the friendship of Spain and the English king. Charles needed only to appeal to the English East India Company, whose monopoly was pitted against that of the Dutch Company, to secure a parliamentary backing for a fresh war with Holland; and the sudden invasion of the republic by France (1672) was the ruin of the De Witts. It was an Orange mob that murdered them; and the young William of Orange pensioned those who had formally accused them of treason.

The action of Charles in 1672 had been a masterpiece of baseness. After secretly betraying his Dutch allies to Louis, he caused his own fleet, before war had been declared, to attack a rich Dutch merchant fleet in the Channel, with the worthy result of a capture of only two ships. His declaration of war, when made, included such pretexts as that there is "scarce a town in their territories that is not filled with abusive pictures and false historical medals and pillars," which "alone were cause sufficient for our displeasure, and the resentment of all our subjects"; and he alleged breach of a non-existent article in the Treaty of Breda.[826] It was in this disgraceful war that Shaftesbury gave out as the true policy of England the maxim of Cato—Delenda est Carthago—and the end of it was that in 1673, after a war without triumphs, in which finally the English fleet under Rupert was defeated by that of the Dutch while the French fleet stood idly by (1673), the betrayed betrayer made peace with Holland once more (1674).

The hostility of France on the other hand practically ended Dutch republicanism, though at the same time it brought about the wreck of the "empire" of Louis XIV. Had he accepted the submission offered by De Witt, he might have made a sure ally of Holland as against England. But his policy of conquest, insolently formulated by his minister Louvois, first put the Dutch Government in the hands of the Prince of Orange, and then turned the English interest, despite the King, against France. It may be taken as a law of European politics that any power which arrogantly sets itself to overbear the others will itself, in the course of one or two generations at furthest, be beaten to its knees. The end of the insolent aggression of Louis came when, after William had become King of England and set up a new tradition of Protestant union against France, the military genius of Marlborough in the next reign reduced France to extremities. Meanwhile Holland was past its period of commercial climax, past the ideals of De Witt, past republicanism for another era. Henceforth it was to be subservient to its stadthouder, and to become ultimately a kingdom, on the failure of the republican movement at the French Revolution.

§ 5. The Decline of Commercial Supremacy

It follows from what has been seen of the conditions of its success that the Dutch trade could not continue to eclipse that of rival States with greater natural sources of wealth when once those States had learned to compete with Dutch methods. But it belonged to the culture-conditions that the rival States should take long to learn the lesson, and that the Dutch should be the first to adapt themselves to new circumstances. The blunders of their enemies lengthened the Dutch lease. Louis XIV gave one last vast demonstration of what Catholicism can avail to wreck States by revoking the Edict of Nantes (1686), and so driving from France a quarter of a million of industrious subjects, part of whom went to England, many to Switzerland, but most to Holland, conveying their capital and their handicrafts with them. The stroke hastened the financial as well as the military exhaustion of France in the next twenty-five years. England, on the other hand, maintained its trade monopolies, which, with the system of imposts, drove over to the Dutch and the French much trade that a better policy might have kept.[827] But all the Dutch advantages were consummated in the command of money capital at low rates of interest, and consequent capacity to trade for small profits.

This accumulation of money capital was the correlative of the main conditions of Dutch commerce. A community drawing its income—save for the great resource of fishing—from its middleman-profits and freightage, and from its manufacture of other nations' raw products in competition with their own manufacture, must needs save credit capital for its own commerce' sake. Thus, whereas the earlier Flemings were luxurious in their expenditure,[828] the Dutch middle-class were the most frugal in north-western Europe,[829] their one luxury being the laudable one of picture-buying. But when, through mere increase of population and consequently of trade, interest gradually fell[830] in the rival communities, who in turn could practise fishing, who had better harbours, who extended their marine commerce, began to manufacture for themselves, and had natural resources for barter and production that Holland wholly lacked, the Dutch trade slowly but surely fell away. And as against the sustaining force of their frugality and their systematic utilisation of their labour-power, the Dutch lay under burdens which outweighed even those imposed on France and England by bad government. Not only did the national debt force a multiplication of imposts on every article of home consumption,[831] but the constant cost of the maintenance of the sea-dykes was a grievous natural tax from which there was no escape. Nor would the creditor class on any score consent to forego their bond.

Thus it came about that after the Peace of Utrecht (1713), which left Holland deeper in debt than ever, there was an admitted decline in the national turnover from decade to decade. It is one of the fallacies of the non-economic interpretation of history to speak of the United Provinces as thenceforth showing a moral "languor";[832] the rational explanation is that their total economic nutrition was curtailed by the competing environment. Yet it must be admitted that the merchant class themselves, when called on by the stadthouder William IV to compare notes as to the decline, showed little recognition of the natural causes beyond dwelling on the effect of heavy taxes, which had been insisted on long before by the party of De Witt.[833] Dwelling as they do on the value of the old maxims of toleration, which were now beside the case, and failing to realise that the sheer produce of the other countries was a decisive factor in competition, they seem to invite such a reaction in economic theory as was set up by the French Physiocrats, who laid their finger on this as the central fact in industrial life.

France, indeed, had learned other vital lessons after the great defeat of Louis XIV. Nothing in the history of that age is more remarkable than the fashion in which the immense blunder of the Revocation of the Edict of Nantes was pro tanto cured under the Regency and under Louis XV by the infiltration of fresh population. Dean Tucker noted, what the Dutch merchants apparently did not, that "Flanders, all Germany on this side of the Rhine, Switzerland, Savoy, and some parts of Italy, pour their supernumerary hands every year into France" (Essay on Trade, 4th ed. p. 27). At that time (1750) there were said to be 10,000 Swiss and Germans in Lyons alone, and the numbers of immigrants in all the commercial towns were increasing (id. pp. 27, 28), the Government having become "particularly gentle and indulgent to foreigners." At that period, too, the French peasantry were prolific (id. p. 45).

Above all, the Dutch Provinces were bound to be outclassed in manufactures by England when England began to manufacture by machinery and by steam. Anciently well-forested,[834] they had long been nearly bare of wood, so that their fuel had become, as it still is, scarce and expensive.[835] They had done wonders with windmills; but when coal came into play as driving power the coal-producing State was bound to triumph. It must, however, be kept on record that when England's commerce had thus begun to distance that of her old rival in virtue of her mere economic basis, Englishmen were none the less ready to resort to wanton aggression. Throughout the eighteenth century the ideal of monopoly markets continued to rule in Europe; and that ideal it was that inspired the struggles of France and England for the possession of India and North America. In the course of those imperialist wars the Government of the elder Pitt gave to privateers the right to confiscate, as "contraband of war," nearly all manner of commerce between France and other nations, and in particular that of Holland, Pitt's aim being to force the Dutch into his alliance against France. The injury thus wrought to their trade was enormous. "Perhaps at no time in history were more outrageous injuries perpetrated on a neutral nation than those which the Dutch suffered from the English during the time of the elder Pitt's administration."[836] It was the method of imperialism; and the usual sequel was at hand in the revolt of the American Colonies. In that crisis also, because the Dutch Council of State, despite the wish of the stadthouder, refused to take part against the Colonies, the English Government as before gave letters of marque to privateers, and told the plundered Dutch that if they increased their fleet to protect their own commerce the action would be taken as hostile. "In 1779 the English commander, Fielding, captured the Dutch mercantile fleet, with four Dutch men-of-war; and in 1780 Yorke, the English Ambassador at The Hague, demanded subsidies from the States, whom his Government had just before plundered."[837]

Needless to say, Dutch wealth and power had greatly dwindled before this insult was ventured on by the rival people. Holland's primary source of wealth, the fisheries, had been in large part appropriated by other nations, in particular by Britain, now her great competitor in that as well as in other directions.[838] But all the while Holland's own "empire" was a main factor in her weakening. Deaf to the doctrine of De Witt, her rulers had continued to keep the East Indian trade on a monopoly basis, ruling their spice islands as cruelly and as blindly[839] as any rival could have done; and it was the false economics and false finance bound up with their East India Company that ruined the great Bank of Amsterdam, which at the French Revolution was found to have gambled away all its funds in the affairs of the Company, in breach of the oath of the magistrates, who were the sworn custodians of the treasure. So situated, the Government could or would make no effort in the old fashion against English tyranny. The State's economic basis being in large part gone, and the capitalistic interest incapable of unifying or inspiring the nation, Holland had, so to speak, to begin life over again. But it would be a delusion to suppose that the political decline meant misery; on the contrary, there was much less of that in Holland than in triumphant England. There were still wealthy citizens, as indeed always happens in times of decline of general wealth. At that very period "the Dutch were the largest creditors of any nation in Europe";[840] and Smith in 1776 testified that Holland was "in proportion to the extent of the land and the number of its inhabitants by far the richest country in Europe," adding that it "has accordingly the greatest share of the carrying trade of Europe,"[841] and again that its capitalists had much money in British stocks. But these were not as broad foundations as the old; nor were they easily expansible, or even maintainable. As soon, indeed, as the rise of other national debts enabled them to invest abroad, they did so. Temple has recorded how, when any part of the home debt was being paid off in his time, the scripholders "received it with tears, not knowing how to dispose of it to interest with such safety and ease." England soon began to relieve them of such anxiety. But though Holland could thus gain from the annual interest-tribute paid by borrowing States, as England does at this moment, such income in a time of shrinking industry stands only for the idle life of the endowed class, a factor neither industrially nor intellectually wholesome. At the beginning of the seventeenth century Keymor, an English observer who studied Dutch commercial life closely, exclaimed: "And not a Beggar there; everyone getting his own Living is admirable to behold."[842] This seems to have been an exaggeration, since in 1619 we find Howell praising the "strictness of their laws against mendicants, and their hospitals of all sorts for young and old, both for the relief of the one and the employment of the other."[843] Later there grew up, however carefully provided for,[844] a notably large pauper population; and so late as 1842 Laing, who liked Holland, wrote of it as "a country full of capitalists and paupers."[845] In the main, modern Dutch life has of necessity had to find sounder bases; and the chief feature in it during the past generation has been the new and great industrial expansion.