- The Strictures of Inheritance: The Dutch Economy in the Nineteenth Century
The economic history of the Netherlands during the nineteenth century demonstrates some remarkable features when compared with other countries such as the United Kingdom or Belgium. Dutch [End Page 516] industrialization is "slow," "late," and even "different," often attributed to a lack of natural resources (like coal and ore) and/or entrepreneurial spirit. This protracted development generated some debate between Dutch historians, but no consensus was reached until the publication in 1968 of J. A. de Jonge's book on Dutch industrialization between 1850 and 1914. According to de Jonge, industrialization started after 1890, when the Netherlands witnessed an economic spurt. For a long time de Jonge's analysis stood unchallenged, until new research published by R. T. Griffiths (1979) and J. M. M. de Meere (1982) presented an alternative explanation that emphasized high labor and transport costs. To settle the dispute, a research project on Dutch national accounts of the nineteenth century was launched in 1987. Part of the project consisted of constructing a large database.
Jan Luiten van Zanden and Arthur van Riel synthesize the results of this project in their new book on the history of the Dutch economy in the nineteenth century—or, more accurately, the period from 1780 to 1914. This era is subdivided into chapters covering the periods 1780–1813, 1813–1840, 1840–1870, and 1870–1914. The theoretical framework used by van Zanden and van Riel is derived from new institutional economics. A large part of their book is thus devoted to political developments and institutional changes and their effect on economic development. This theoretical perspective is clearly reflected in the structure of the book: one chapter on economic history immediately follows a chapter on political developments.
Their main argument is summarized as follows: between 1780 and 1840, the Netherlands saw important institutional changes (like the Batavian Revolt of 1798 and the formation of the Kingdom of the Netherlands in 1813), but these were not radical enough to destroy all of the old institutions of the former republic. As a consequence, economic development was hampered because these old institutions favored colonial trade, not industrial innovation. The Dutch economy remained in a stationary state, although it experienced some growth between 1813 and 1830, notably in agriculture and services. The activist economic policy of King Willem I (1813–1840) produced few positive results because he was unable to reconcile the interest of northern and southern entrepreneurs at the same time. Discontent in the southern provinces resulted in the Belgian revolution in 1830. Between 1830 and 1840, Dutch economic growth faltered; the most dynamic sector was transport, while industrial output continued to decline.
Between 1840 and 1870, liberals dominated Dutch politics and were able to do away with the remaining old institutions. Their political program included the construction of railways, educational [End Page 517] reforms, fiscal reorganization, and political modernization. Economic growth increased, including industrial output, although most of it was related to either transport or the Dutch East Indies. According to van Zanden and van Riel, the 1860s marked the start of Dutch industrialization and not 1895, as thought by de Jonge.
The period 1870–1914 saw the Netherlands experiencing "modern economic growth." Services remained important, but industrial employment grew rapidly. Dutch industrialization finally began based on new industries of the Second Industrial Revolution (for example, electricity, oil, chemicals). The 1890s also saw the establishment or growth of Dutch multinationals (like Philips, Royal Dutch/Shell, Unilever). Surprisingly, shortly after 1870, new institutions emerged that resembled older distributional arrangements, but this did not frustrate industrialization. The political reforms introduced earlier and the modernization of the economy created opportunities for new pressure groups to organize themselves (unions, factory owners) and to put forward their demands at the political level.
Thanks to the new database on which much of their book is based, van Zanden and van Riel are able to settle some old disputes...